FEWSTER & DRAKE - [2015] FamCA 602

FAMILY COURT OF AUSTRALIA

FEWSTER & DRAKE

[2015] FamCA 602

FAMILY LAW – BINDING FINANCIAL AGREEMENT – where agreement under s 90C of the Family Law Act 1975 – where the agreement is conceded to be a binding financial agreement under s 90G of the Act – where the wife seeks to have the agreement set aside under s 90K of the Act – where duress, undue influence and unconscionable conduct alleged by the wife – where wife has onus of showing “special relationship or disadvantage” (Louth v Diprose (1992) 175 CLR 621) – where evidence insufficient to demonstrate same in context of relationship and negotiations leading to agreement and where both parties had independent legal advice – where application to set aside binding financial agreement on this ground dismissed.

FAMILY LAW – BINDING FINANCIAL AGREEMENT – where agreement under s 90C of the Family Law Act 1975 – where the agreement is conceded to be a binding financial agreement under s 90G of the Act – where the wife seeks to have the agreement set aside under s 90K of the Act – where wife asserts repudiation of the agreement by the husband – where wife asserts husband estopped by conduct from asserting validity of agreement – where application to set aside binding financial agreement on this ground dismissed.

FAMILY LAW – SPOUSE MAINTENANCE – interim spouse maintenance – where consideration of the wife’s reasonable needs – where wife unable to support herself adequately – where husband concedes capacity to meet order – order for interim spouse maintenance.

Family Law Act 1975 (Cth) ss 72, 74, 75(2), 79(4), 90C, 90E, 90G, 90K, 90KA

Family Provisions Act 1982 (NSW)

Australia & New Zealand Banking Group v Karam [2005] NSWCA 344
Barton v Armstrong [1980] AC 614
Bevan & Bevan (1995) FLC 92-600
Commercial Bank Of Australia Ltd v Amadio and Anor (1983) 151 CLR 447
Commonwealth of Australia v Verwayen (1990) 170 CLR 394
Crescendo Management Pty Ltd v Westpac Banking Corporation (1988) 19 NSWLR 40
Donald and Forsyth [2015] FamCAFC 72
Hoult v Hoult [2011] FamCA 1023
Kokl (1981) 7 Fam LR 591
Louth v Diprose (1992) 175 CLR 621
Pascot & Pascot [2011] FamCA 945
Rolfe & Rolfe (1979) FLC 90-629
Wallace v Stelzer [2012] FamCAFC 33
Yerkey v Jones (1939) 63 CLR 649

APPLICANT:

Mr Fewster

RESPONDENT:

Ms Drake

FILE NUMBER:

PAC

3945

2014

DATE DELIVERED:

28 July 2015

PLACE DELIVERED:

Parramatta

PLACE HEARD:

Parramatta

JUDGMENT OF:

Foster J

HEARING DATE:

21 and 22 May 2015

REPRESENTATION

COUNSEL FOR THE APPLICANT:

Mr Othen

SOLICITOR FOR THE APPLICANT:

Webb Thom & Associates

COUNSEL FOR THE RESPONDENT:

Mr Johnston

SOLICITOR FOR THE RESPONDENT:

Armstrong Legal

Orders

That the financial agreement between the parties dated 22 December 2006 be set aside under s 90K(1)(d) of the Family Law Act 1975.
That by way of interim spouse maintenance pending further order the husband pay to the wife by way of deposit to a bank account nominated by the wife in writing including SMS or email communication within 2 days from the date of this order $1,500 per week first payment within 7 days from the date of this order.
That in the event of an application for costs the wife file and serve any submissions in support thereof within 21 days from the date of these orders and the husband any submissions in response thereto within a further 14 days and that thereafter judgment as to costs to be reserved to a date to be fixed.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Fewster & Drake has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

FAMILY COURT OF AUSTRALIA AT PARRAMATTA

FILE NUMBER: PAC 3945 of 2014

Mr Fewster

Applicant

And

Ms Drake

Respondent

REASONS FOR JUDGMENT

The matters for determination in these proceedings are as follows:
a)The validity or otherwise of a financial agreement between the husband and wife dated 22 December 2006; and
b)The application by the wife for an order for interim spousal maintenance.
Proceedings were initially commenced in the Federal Circuit Court of Australia by the applicant husband on 20 August 2014. In his application initiating proceedings he sought a raft of parenting orders in relation to the children of the parties’ marriage presently aged eight and six. In response, the respondent wife sought orders as to parenting, a child support departure, property settlement and associated injunctive relief and spousal maintenance.
The husband seeks a dismissal of the financial orders sought by the wife.
On 29 September 2014 interim orders were made relevantly providing for the children to live with the wife and for the children and to spend time with the husband as agreed.
On 13 November 2014 proceedings were transferred to this Court. On 8 December 2014 further interim orders were made providing for the children to live with the wife and to spend defined time with the husband. An Independent Children’s Lawyer was appointed to represent the interests of the children.
It appears that subsequently it became apparent that the ability of the wife to seek financial orders was curtailed by the existence of a financial agreement between the parties entered into in December 2006.
On 16 March 2015 the wife was ordered to file an amended response relating to the question of the financial agreement within 28 days and the husband was ordered to file and serve an amended reply within a further 28 days.
On 18 March 2015 trial directions were made in relation to the parenting proceedings with the parties granted leave to approach the list clerk to obtain dates for trial for a three day hearing.
Otherwise proceedings in relation to the financial agreement and interim spouse maintenance were adjourned for hearing for two days commencing on 21May 2015. Following the conclusion of evidence, directions were made for written submissions with final submissions in reply from the wife to be filed and served by 26 June 2015.

Context

The husband was born in 1942 and at trial was 72 years of age. The husband described himself as the non-executive chairman of B Pty Ltd.
The husband was cross examined at length as to his financial affairs. His Financial Statement providing a less than satisfactory representation of same. Ultimately he conceded that as non-executive chairman of B Pty Ltd he was allocated $300,000 per annum by way of expenses that he could draw on by way of salary or expenses. He also conceded that he draws down against his superannuation about $20,000 per year, that sum reflecting the contributions made on his behalf by the company.
In the context of the wife’s spousal maintenance application he properly conceded through his counsel that he had the capacity to meet such order as may be made.
The wife was born in 1967 and at trial was 47 years of age.
The parties commenced cohabitation in 2004 and married in 2006.
At the commencement of cohabitation the parties resided in a property owned by the husband at Suburb C. The parties would spend weekends on a rural property at D Town Street, D Town which was at that time owned by E Pty Ltd as trustee for the Fewster Trust (now known as the F Trust).
The husband was the controlling shareholder of the trustee company and appointor under the trust deed. In 2011 he resigned as appointor and the husband’s friend, a solicitor named Mr G, was appointed. At the same time the husband relinquished any claim he may have in regard to the trust as beneficiary.
In about June 2012 the trustee of the trust, E Pty Ltd, was replaced by H Pty Ltd, a company that is controlled by the husband and his older children.
The husband says that by reason of the age difference between himself and the wife early in the relationship he suggested to the wife that they enter into a “Cohabitation and Separation Agreement”.
At the time of cohabitation the wife owned a property at I Street, Suburb J together with furniture, jewellery and cash on deposit in Australian and Country L banks. The husband owned the Suburb C property, furniture, superannuation and a life policy.
It was the husband’s wish that in the event of his death the wife would have a right to reside at the D Town property should she so desire. However that property was part of the Fewster Trust.
The husband instructed his solicitor to prepare a draft agreement and he received a draft agreement in early April 2005. Progress in relation to the draft agreement appears to have been somewhat slow. In late September 2005 the husband received correspondence from his solicitor in relation to concerns as to the husband’s ability to provide for the wife to live in the D Town property by reason of the property being the subject of the trust.
Subsequently the husband received a further draft of the proposed agreement that was to be made in contemplation of the parties’ marriage in 2006.
In late 2005 the wife was involved in negotiating a property settlement with her former partner. Substantially, an agreement was reached that provided for the wife to retain the Suburb J property and funds in her Australian and Country L bank accounts and pay to her former partner a cash payment of $1.1 million.
The wife, it appears, in part to fund the payment to her former partner, borrowed various funds by way of mortgage secured over the Suburb J property. The husband provided a guarantee that facilitated the funds being advanced to the wife by her mortgagee under an offer of loan dated 27 November 2005. The wife had no income. Loan payments were about $5,500 per month and the rent received for the Suburb J property was only $2,900 per month. The husband met the shortfall. The wife was clearly dependent on the husband’s continuing support financially.
The husband provided that support, it appears, in part by the wife receiving distributions from the Fewster Trust and the husband applying them to the loan payments for the mortgage borrowing to pay out the wife’s former defacto.
The parties married in 2006 by which time the proposed agreement had not been implemented. At the time of marriage the wife was 7 months pregnant expecting the parties’ child. The wife had previously miscarried twice.
The wife at this time whilst pregnant expressed to the husband her reluctance to sign the agreement saying “I don’t want to sign; you know I have no choice”.

The path to agreement

Several months after marriage and in late April 2006 the husband’s solicitors received correspondence from the wife’s solicitor in relation to the proposed agreement. The wife’s solicitor confirmed that she was in possession of correspondence from the husband’s accountant listing his assets. That accountant’s letter set out:
a)Details of the Fewster Trust and the shareholdings of the trustee company, acknowledging that the husband had control and details of the trust assets being:
i)The D Town property
ii)Plant and equipment used by B Pty Ltd
iii)The shares in B Pty Ltd
b)The assets of B Pty Ltd of about $600,000 and the debt of $75,000 owed to the husband
c)Fewster Superannuation Fund balance at June 2004 of $140,260
d)Property at Suburb C
e)Funds at bank.
In late May 2006 the husband’s solicitor informed the wife’s solicitor that a draft agreement had been prepared prior to marriage, that it was her understanding that both parties were happy with the agreement but that the husband’s solicitor was still waiting on a list of assets to complete the schedules to the agreement.
In mid-July 2006 the husband’s accountant wrote to the wife’s solicitor proposing various options to address the wife’s desire for a continued right of occupation at the D Town property. Shortly thereafter the husband’s solicitor wrote to the wife’s solicitor as to those options and provided a further copy of the draft agreement between the parties now amended to be an agreement pursuant to s 90C of the Family Law Act 1975(Cth) (‘the Act’).
The wife asserts that at about this time the husband represented to her that he would leave her his Suburb C property and life insurance in his will.
On 3 August 2006 the wife wrote to her solicitor expressing her concerns that a will could always be changed and the possibility that Suburb C property could be sold. She was clearly aware of the conflict between herself and the husband’s children.
On 4 August 2006 the wife wrote to her solicitor expressing her concern about the proposed agreement and the lack of provision for her and the child: “..am I only a young entertainment for [Mr Fewster] as long as he is alive and then supposed to disappear?”
On 10 August 2006 the husband’s solicitor forwarded to the wife’s solicitor a copy of the Fewster Trust deed. The husband’s solicitor thereafter wrote to him confirming that the husband’s schedule of assets had been completed from information provided by the husband’s accountant and the husband but that the wife’s schedule of assets was not yet available.
On 15 August 2006 there was a conference between the parties’ solicitors and the parties at which the husband asserts he said to the wife “the business of [B Pty Ltd] is separate to this agreement and involves my other children, just as the [Suburb J] property is yours, is your separate property”. At this time the B Pty Ltd business operated from leased factory premises.
The wife asserts that the husband at the meeting was aggressive: “my assets are all tied up….I will sue the shit out of you…you will lose [Suburb J]…you will have to pay me maintenance.” The deed of option to purchase D Town was amended so as to end if the wife after the husband’s death was living with another man.
On 8 September 2006 the husband’s solicitor sent to the wife’s solicitor a copy of the husband’s will signed on 7 September 2006 that provided for the Suburb C property, the husband’s superannuation and the husband’s life insurance to pass to the wife in the event of his death.
Following further discussions between the parties’ solicitors it appears to have been agreed that the proposed s 90C agreement would make no provision for maintenance for the wife, leaving the question of spousal maintenance at large.
In communication from the husband’s solicitor to the wife’s solicitor on 9 November 2006, the husband’s solicitor confirmed that it was the husband’s intention to leave the assets built up over the course of his first marriage to his three children of that marriage. On the same day the husband’s solicitor forwarded to the wife’s solicitor a further draft of the s 90C agreement incorporating the wife’s assets and resources into the second schedule of the agreement.
On 24 November 2006 the wife’s solicitor forwarded communication to the husband’s solicitor confirming that the wife was happy to proceed with the execution of a deed of option that would facilitate her purchase of the D Town property and advising that the wife was agreeable to signing the financial agreement as discussed at the meeting in August 2006 limited only to property. The wife’s solicitor sought minor amendments to the draft agreement and an amended list of assets for the wife and further advised that a copy of the certificate of independent advice would be signed by “Ms K” after the agreement had been amended as sought.
There was further communication between the parties’ solicitors as to the question of the agreement relating to spouse maintenance and providing a release under the Family Provisions Act 1982 (NSW). These issues were resolved by agreement.
On 19 December 2006 the husband’s solicitor forwarded to the wife’s solicitor a deed of option with contract annexed, a copy of the husband’s signed will and the final draft of the s 90C agreement with the maintenance provisions removed.
On 22 December 2006 the husband and wife travelled together to the wife’s solicitor’s offices. The wife asserts again that the husband at the meeting was aggressive repeating his earlier threats: “my assets are all tied up….I will sue the shit out of you…you will lose [Suburb J]…you will have to pay me maintenance.” The husband and wife signed the s 90C agreement in the presence of a solicitor Ms K.
On 12 January 2007 the wife’s solicitor wrote to the husband’s solicitor confirming the parties’ attendance on 22 December 2006 and execution of the deed of option, the s 90C agreement and the wife’s certificate of independent advice and schedules of assets. A copy of those documents was provided to the husband’s solicitors who were informed that the originals were held in the wife’s solicitor’s office.
On 24 January 2007 the husband’s solicitor forwarded to the wife’s solicitor the original certificate of independent legal advice signed by the husband’s solicitor to be attached to the original s 90C agreement held by the wife’s solicitor.
In 2009 after the birth of the parties’ second child, the parties moved to reside at the D Town property on a permanent basis. Thereafter the husband spent several nights a week at the Suburb C property when in Sydney for work but since 2010 that property has been rented out.

The D Town transfer

In February 2010 the husband conferred with his solicitor as to a possible transfer of the D Town property from the E Trust as the wife was by this time unhappy with the provisions of the deed of option signed on 22 December 2006.
In 2011, after obtaining accountant’s advice as to the implementation, the D Town property was transferred from the trust to the husband and wife for a consideration of $800,000 being the value of the property at that time. The purchase price was funded by way of a loan from the ANZ Bank of $465,000 and a loan from the trust to the husband of $478,863. The mortgage advance from the ANZ Bank was secured over the husband’s Suburb C property. In addition to funding the purchase price the husband paid $31,500 in stamp duty on purchase.
The husband asserts that following the transfer he resigned as a director of the trustee company and relinquished his shares that gave him control of the trust. That contention is not completely supported by ASIC documents in relation to H Pty Ltd, the present trustee company. He says he did so as he had taken D Town from his older children albeit for fair value and he wanted them to retain the business interests of B Pty Ltd. At this time the business was his asset or interest to dispose of.
Subsequent to transfer the wife has made no financial contribution to the property or its outgoings including borrowings.

Sale of Suburb J

Prior to sale of the Suburb J property the wife sold her property in Country L with the funds used to reduce or pay off her Suburb J mortgage. Otherwise it appears she had accumulated funds of about $125,000 into her bank account with the CBA during cohabitation from funds received by way of the rent on Suburb C from the husband. She invested $100,000 of these funds with the Perth Mint.
In January 2012 the wife paid $145,600 into her mortgage account presumably from her Country L funds.
In 2012 the wife sold the Suburb J property for $1.45 million. The net proceeds available to the wife were about $1.067 million after paying out the then mortgage of about $235,000 from which she later had to pay agents commission and legals of $42,000. She deposited the funds to her CBA account.

She consolidated her Perth Mint investment to a total of $1 million. As discussed below she later purchased the Suburb M property in early 2015.

H Pty Ltd

In 2012 H Pty Ltd as trustee of the N Trust purchased factory premises in Suburb O. All five of the husband’s children hold units in the trust.
The units held by the parties’ two infant children were held in trust (the Ms P Fewster and the Ms Q Fewster bare trusts) initially by the husband but after October 2010, by his three older children. The trust also holds the children’s ordinary shares in H Pty Ltd.
The husband and his three older children control the trustee company H Pty Ltd. The trust receives rent of about $405,000 per annum from B Pty Ltd that had a turnover of about $15 million in the 2014 financial year. The husband contends that trust distributions to the children of the parties will be applied to their secondary education fees. He offered no explanation as how he dealt with any distributions to date save for unexplained taxation returns filed on behalf of the children without the wife’s knowledge.
The parties separated on 12 May 2014 when the husband moved out of the main accommodation at the D Town property.
During the cohabitation the wife undertook the domestic duties in the relationship and also day to day duties on the farm at D Town. She also worked in various capacities in relation the husbands’ business interests.
Subsequently a Separation Declaration signed by the husband and dated 20 April 2015 and forwarded to the wife’s solicitors.
After separation in December 2014 the husband sold his Suburb C property and the proceeds of sale were utilised to discharge the ANZ loan and the husband’s debt to the trust. The property sold for $1.2 million with the net proceeds paid as to $440,000 to payout the ANZ loan, $95,000 to the husband and the balance to the F Trust to repay the loan borrowed to acquire D Town in the parties’ joint names.

The Suburb M property and thereafter

Subsequently in late January 2015 the wife purchased a property at Suburb M for $745,000 plus purchase costs. The property was in need of some work. The wife funded the purchase from the sale of her silver bullion that was on deposit at the Perth Mint. The wife received $802,515 from the sale.
Subsequent to the purchase the wife has engaged a builder to carry out certain repair and renovation work on the property but otherwise the balance of the proceeds of sale of the silver bullion was placed on deposit in bank accounts in the name of the parties’ infant children.
After purchase of the Suburb M property the wife deposited a total of $325,000 in bank accounts on trust for the children.

The wife’s circumstances

The wife has rented a small shop in Suburb M and has set up an art studio. She is an experienced artist, painter, printmaker and sculptor. She asserts modest sales of only $5,000 in the 2015 financial year.
Otherwise she undertakes some voluntary work, cares for the children and is engaged in the repair and renovation of her home. The children are in the full time care of the wife, with the husband spending defined time with them. The children are both at the local school. The wife concedes that there is some time during the day that she could seek paid employment.
The husband is recalcitrant as to child support and has sought to minimise his obligation notwithstanding his oral evidence as to his true financial resources. As at trial he was in arrears of about $10,000.

The request for particulars

On 18 March 2015 pursuant to directions made by the Court the husband’s solicitors forwarded a request for further and better particulars to the wife’s solicitors. That request for further and better particulars was replied to on 24 April 2015.
The salient features of the replies provided on behalf of the wife are as follows:
a)The wife concedes that the agreement is a financial agreement within the meaning of s 90C of the Act as to property only and not as to maintenance,
b)The wife asserts that the agreement is not a binding financial agreement under the Act,
c)The wife asserts that she signed the agreement as a consequence of coercive behaviour by the husband amounting to duress in that:
i)The husband insisted that she would be protected by leaving the property at Suburb C to her in his will and that on 29 July 2006 the husband represented he would make a new will, take out life insurance for the wife and the unborn child and leave both life insurances to she and the baby,
ii)The husband relied on her financial difficulties in refinancing her Suburb J property to settle the claim by her former de facto partner. She needed to raise $1.1 million and could not do so and the husband represented he would guarantee the loan if she signed the agreement,
iii)By giving the wife an option to purchase the D Town property at either $1.2 million or market value and engaging an old school friend solicitor to prepare an option agreement,
iv)By representing that if she did not enter into the agreement and the option that he would not guarantee the $1.1 million loan,
v)The wife at the time of signing of the agreement on 22 December 2006 was seven months pregnant expecting the birth of the parties first child,
vi)That the agreement is entirely silent on the question of financial disclosure and otherwise the husband provided no disclosure of his financial circumstances, representing to the wife that she was wealthier than him because all his property was protected by a trust
d)The wife asserts that she was provided no adequate advice by her solicitor as she was not provided with any financial disclosure by the husband and that on the day the agreement was signed the wife refused to do so, ran from her solicitor’s office and was chased down the street by the solicitor Ms R who insisted she come back to the meeting to signed the agreement as she had no choice. That Ms R met with the husband in the absence of the wife prior to signing the agreement,
e)The wife asserts that there are circumstances in which the Court may set aside the agreement under s 90K in that:
i)The agreement was obtained by fraud in so far as it relates to nondisclosure of a material matter being the financial circumstances of the husband: (s 90K(1)(a)),
ii)That the agreement is void, voidable or unenforceable by reason of the circumstances referred to above: (s 90K(1)(b)),
iii)That since the making of the agreement there has been a material change in circumstances (s 90K(1)(d)) in that:
iv)Two children were born of the relationship,
v)The wife was the primary carer of the children during cohabitation,
vi)The wife has had the ongoing care and financial support of the children post separation,
vii)It was necessary for the wife to use her financial resources to purchase a home for herself and the children,
viii)After signing the agreement the wife worked in the husband’s business without pay and worked on the farm without pay,
ix)The wife was used by the husband to reduce income tax otherwise payable by the trust by receiving distributions or dividends without receiving any funds,
x)That in January 2006 the husband represented to the wife’s mother that money would not be an issue for the wife and that consequently the wife’s mother who died in 2008 made no provision for the wife in her will,
xi)That the husband engaged in unconscionable conduct in respect to the making of the agreement (s 90K(1)(e) in that:
a)The husband represented to the wife that he would cause a lease to be entered into by the trustee of the E Trust over the main home on the D Town property at a nominal rent in the event of the husband’s death and that no such lease was entered into,
b)That the husband relied upon the wife’s desperate financial position and anxiety in relation to the de facto litigation,
c)That the husband relied upon the wife’s vulnerability of the state of pregnancy and the imminent birth of their first child,
d)That the husband represented that the wife would be financially protected in that he would leave the Suburb C property to her in his will and that she would be the beneficiary of a life policy insurance over his life if she signed the agreement,
e)That the husband represented that the wife could have an option to buy the D Town property if she signed the agreement,
f)That the husband was aware that the wife was never in debt before and was panic stricken about the de facto litigation and that how she would pay out her former de facto partner,
g)That the husband was aware that she could not raise a loan as she had no income,
h)That the husband represented that he would not guarantee a loan of $1.1 million to pay out the de facto claim unless she signed the agreement,
i)That at the meeting on 15 August 2006 the wife sought financial disclosure from the husband and he refused to do so,
j)That at the meeting on 22 December 2006 when the agreement was signed the husband contended that the wife was richer than him, that all his assets were trust protected and that without the protection of the agreement for herself that the husband could sue the wife, that she would lose her home, that he could claim to be semi-retired and sue her for spouse maintenance,
f)The wife asserts that pursuant to s 90KA of the Act that the agreement is invalid and ineffective and should be set aside by reason of:
i)Fraud in relation to financial nondisclosure,
ii)Duress as particularised above,
iii)That there was a material inequality in bargaining power between the parties to the agreement,
iv)That it was not reasonably practicable for the wife to negotiate for the alteration of or to reject any of the provisions of the agreement,
v)That the wife was not reasonably able to protect her interests,
vi)That the wife was not reasonably able to protect interests because of her physical or mental capacity at the time the agreement was made,
vii)The relative economic circumstances, educational background and literacy of the wife,
viii)The extent (if any) to which the provisions of the agreement and the legal and practical effect were accurately explained by Ms R to the wife and her understanding of those provisions and their effect.

The Financial Agreement

The relevant features of the financial agreement signed in December 2006 may be succinctly stated as follows:
a)That each of the parties acknowledged that before signing the agreement they had each received a separate independent legal advice from a legal practitioner as to the effect of the agreement on that party’s rights and the advantages and disadvantages at the time the advice was provided to each of them of making the agreement,
b)That each of the parties acknowledged and agreed that they had made no financial contribution or had any entitlement in respect to their separate assets comprised in the schedules attached to the agreement,
c)That on the happening of a terminating event under the agreement:
i)They would each retain the assets comprised in the separate schedules attached to the agreement or any property or income acquired thereafter arising from the disposal of property referred to in the schedules or from gifts received or inheritances received,
ii)That any jointly acquired real property in the absence of agreement would be sold and each of the parties would be reimbursed their respective contributions to the purchase price, costs of purchase, renovations and/or improvements together with interest that 10 per cent calculated on a daily basis from the date of such contributions until the date of completion of the sale and that the balance of proceeds of sale then remaining be divided between the parties in proportion to the total monies advanced by each of them towards the purchase price and other outgoings of the joint property including but not limited to stamp duty, legal costs and disbursements associated with the purchase, rates, insurance levies and mortgage instalments,
iii)That any personalty comprising furniture furnishings and effects jointly acquired by joint contribution to the purchase price be divided on a two lists basis,
iv)That there be a purported release of claims one against the other under the Family Provision Act 1982 (NSW) with an obligation to make a joint approach to the Supreme Court of New South Wales for the approval of the release.
The schedules to the agreement comprised the First Schedule as to the assets and resources of the husband and the Second Schedule as to those of the wife.
The schedule as to the husband set out the following:
a)S Street, Suburb C
b)All furniture and household items at the Suburb C property as at 1 August 2005,
c)All furniture and household items at the D Town property as at 1 December 2004
d)Shareholding in Smartmetric Inc
e)Shareholding in E Pty Ltd
f)Life insurance policy with Tower Life
g)CBA bank account 4180
h)Superannuation in the Fewster Superannuation Fund
i)Superannuation in BT Online Employer Fund
The schedule as to the wife set out the following:
a)I Street, Suburb J
b)T Street, U Town, Country L
c)Furniture and personalty
d)Items of jewellery
e)Japanese motor vehicle
f)Various minor bank accounts
The certificate of independent advice as to the wife was signed by Ms K on 22 December 2006. The certificate of independent advice as to the husband was signed by Anne Arthur on 24 January 2007. Both certificates assert that the relevant advices were provided “independently of the other party and before the time at which my client signed the agreement’.

The statutory framework

Section 90C of the Act at the time of the agreement relevantly provided:
Financial agreements during marriage
(1) If:
(a) the parties to a marriage make a written agreement with respect to any of the matters mentioned in subsection (2); and
and
(b) the agreement is expressed to be made under this section;
the agreement is a financial agreement …
There is no issue between the parties that the agreement is a financial agreement for the purposes of s 90C.
Section 90G of the Act relevantly provides:
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 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.
(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 spouse party 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.
Notwithstanding s 90G was substantially amended effective 4 January 2010, its operation is retrospective (Wallace v Stelzer [2012] FamCAFC 33).
Notwithstanding particulars supplied, the wife conceded at trial that the agreement was a binding financial agreement for the purposes of s 90G of the Act.
Section 90K of the Act relevantly provides:
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 spouse party; 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 superannuation interest covered by the agreement and there is no reasonable likelihood that the operation of the flag will be terminated by a flag lifting agreement under that Part; or
(g) the agreement covers at least one superannuation interest that is an unsplittable interest 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 parental responsibility 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...

In final submissions the wife under s 90K relied on the following:
a)That agreement was obtained by fraud (including non-disclosure of a material matter),
b)That the agreement is void, voidable or unenforceable by reason of the husband’s repudiation of the agreement or that he is estopped from asserting the validity of the agreement,
c)That 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,
d)That in respect of the making of a financial agreement—the husband engaged in conduct that was, in all the circumstances, unconscionable.

Hardship and material change: section 90K(1)(d)

As observed by Le Poer Trench J in Pascot & Pascot [2011] FamCA 945:
150. It is trite to say that in many property cases, heard by this court, the significance placed by the court on a parties contributions to the marriage, as a homemaker and parent, (as required by sec 79(4)(c)) is notorious. In this regard see Rolfe & Rolfe(1979) FLC 90-629 at pp 78,272–78,273 per Evatt CJ (approved by Wilson J Mallet v Mallet [1984] HCA 21; (1984) 156 CLR 605):
“The purpose of s 79(4)(b) [the precursor to s 79(4)(c)] in my opinion, is to ensure just and equitable treatment of a wife who has not earned income during the marriage, but who has contributed as a homemaker and parent to the property. A husband and father is free to earn income, purchase property and pay off the mortgage so long as his wife assumes the responsibility for the home and the children. Because of that responsibility she may earn no income or have only small earnings, but provided she makes her contribution to the home and to the family the Act clearly intends that her contribution should be recognised not in a token way but in a substantial way. While the parties reside together, the one earning and the other fulfilling responsibilities in the home, there is no reason to attach greater value to the contribution of one than to that of the other. This is the way they arrange their affairs and the contribution of each should be given equal value.”
151. Consequently, in a circumstance where the parties had one child and were expecting another, the contributions the primary carer of the children and the primary provider of domestic services to the family was to provide would normally be seen as extensive and not uncommonly assessed by the court to be equal to the income earned and contributed to the family by the parent who was free of those tasks and able to pursue income from employment and advance a career. As a result, what the wife gave up by that provision was a very considerable right of real value.
In this matter the parties cohabitated for about 10 years. At the time of marriage a child was expected and there had been two miscarriages. A second child was born two years after the agreement in early 2009.
The wife at the time of the agreement had no income although it appears unbeknown to her she was at some stage during cohabitation the recipient of “notional” distributions from the Fewster Trust.
The wife’s evidence that during the marriage she was the primary carer for the children and homemaker is not in contest. The fact that she has had the overwhelming care of the children physically and financially after separation is also not in contest.
The wife was not challenged on her evidence that she worked on the property at D Town and in the husbands business during cohabitation.
The agreement provided in substance for the parties to retain their respective assets as at the date of the agreement and as to any after acquired joint property for same to be divided, after reimbursement of contributions with interest thereon calculated at a daily rate, in the same proportion as the contributions. It is not difficult to see that the wife would have little expectancy to any interest in after acquired joint property where at the time of agreement she had no prospective capacity to make any contribution. It is to be inferred that the husband was cognisant of these consequences as he now seeks that the D Town property be transferred to him without any consideration to the wife.
The agreement makes no provision so as to recognise the possibility of the wife’s contributions as contemplated by Evatt CJ in Rolfe & Rolfe (1979) FLC 90-629. This notwithstanding the very circumstances that existed at the time of the agreement that clearly indicated that such contributions would be made by the wife. Those contributions were later magnified by the birth of a second child.
Again in Pascot (supra) Le Poer Trench observed:
352.    This section is very similar in nature and wording to sec 79A(1)(d), although it is noted that this provision is:
“...wider [than sec 79A(1)(d)] in that the change in question need not be “exceptional”, but “material”” (LexisNexis Australian Family Law)
353.    There is no guiding case law on this subsection as yet, therefore in order to gain insight into how this subsection may be construed, it is necessary to draw from case law on sec 79A(1)(d) for guidance, as sec 90K(d) is modelled on that section. In the judgment of Garden and Gavin (No. 2) [2010] FamCAFC 125, the Full Court set out the following test:
[46.] It is clear that three elements must be satisfied before an order can be made setting aside property orders pursuant to s 79A(1)(d). First, there must be circumstances that have arisen since the making of the order, being circumstances of an exceptional nature relating to the care, welfare and development of a child. Secondly, it must be demonstrated that the applicant (not the child) will suffer hardship if the court does not vary the order or set the order aside and make another order in substitution of the order. Thirdly, what might be described as a further discretionary element, that is, the court may vary the order if it considers appropriate and make another order under s 79 in substitution for the order so set aside.
354.    For the purposes of sec 90K(1), it would be useful to adopt the test in the following terms:
a.There must be circumstances that have arisen since the making of the Binding Financial Agreement, being circumstances of a material nature relating to the care, welfare and development of a child of the marriage;
b.It must be demonstrated that the child or the applicant, if she has caring responsibility for the child, will suffer hardship if the court does not set the agreement aside;
c.The court may set the agreement aside if it considers it appropriate and make such orders under sec 90K(3) as it deems appropriate.
355. In relation to the first element, it is clear that the court must substitute the broader standard of sec 90K(1)(d) for the narrower sec 79A(1)(d) and be satisfied that that a material change in circumstances has occurred, being circumstances relating to the care, welfare and development of a child of the marriage.
356.    There is no definition, in sec 4 of the Act, of the term “material change”, so it is necessary to look beyond the Act for clarification. The term “material”, according to Butterworths Legal Dictionary, is defined as being “important, essential or relevant”; while “material alteration” is defined as being “a substantial or significant alteration”.
357.    Given these definitions, we may adapt the first element of the test to suit the different standard outlined in sec 90K. The first element of the test would now be that the court must be satisfied that substantial, significant and relevant change has occurred, being circumstances relating to the care, welfare and development of a child (of the marriage).
358.    In this instance, the Financial Agreement between the parties was created at a time when the parties were the parents of one child and the prospective parents of a second. No consideration was given in the Agreement to the possibility of the parties having a third child, nor is there any evidence that this possibility was discussed during the negotiations between the parties.
359.    The birth of a third child cannot be dismissed as an insignificant or unsubstantial change in circumstances. There are significant costs associated with an additional child in terms of time and emotional investment as well as the financial cost that would most certainly affect the care, welfare and development of the children of the relationship. The change is certainly relevant to the agreement, as there is specific provision that the wife is to be primarily responsible for the children and she is not permitted by the Agreement to claim any compensation from the husband for that effort. It is open to the Court to find that there has been a material change in circumstances.
360.    It also needs to be remembered in this case that at the time the Agreement was signed the parties only had one child, although the fact of the pregnancy of the wife with the second child was set out in the recitals. The impact upon a parent of having the care of three children as opposed to two is significant in many ways. Not the least are the cost of supporting the child, the effort involved in caring for three young children, the time involved in caring for three, the additional cost of day care if the parent has work outside the house.
361.    The second element of the reformulated test is that the court must determine whether a child of the marriage or the applicant if she has the caring responsibility for the child will suffer hardship if the agreement is not set aside.
362.    In this case I am satisfied that the wife does have caring responsibility for all three children as defined by subsection (2) of sec 90K(1).
363.    In this case the hardship focused upon is that of the wife.
364.    In Garden and Gavin (No. 2) [2010] FamCAFC 125, the Full Court followed the leading case of Simpson and Hamlin (1984) FLC 91-576 in relation to the second element of the test, hardship:
[56.] As their Honours in Simpson and Hamlin said this conclusion is fortified by the operation of s 81 of the Act. At p.79,659 their Honours said:
The importance of bringing an end to litigation remains an important consideration and the remarks of Mason J. remain applicable to para. (d) mutatis mutandis. To paraphrase his Honour's remarks: it is not sufficient that it appears that circumstances have arisen of an exceptional nature resulting in hardship to the applicant, the Court must consider in the exercise of its discretion whether that hardship is of such a serious nature and results in such inequity that it can only be rectified by the extreme step of setting aside or varying an existing order of the Court. We leave aside the question of whether special considerations apply to consent orders. (emphasis added)
365.    The judgment of In the Marriage of Whitford(1979) FLC 90-612 discusses what “hardship” is (in relation to sec 44(3) of the Act and making an application for property orders out of time). This discussion, though on another section of the Act, is relevant in the discussion as it deals with the reopening of financial matters which would otherwise be considered closed:
The loss of the right to institute proceedings is not the hardship, to which the sub-section refers. It is with the consequences of the loss of that right, with which the sub-section is concerned. The requirement, that the court must be satisfied that hardship would be caused if leave were not granted, implies that it must be made to appear to the court that the applicant would probably succeed, if the substantive application were heard on the merits. If there is no real probability of success, then the court cannot be satisfied that hardship would be caused if leave were not granted. Further, the matter with which the court is concerned is not whether the applicant or a child is suffering hardship, but the question is whether the applicant or a child would suffer hardship if leave were not granted. If the probable result of the hearing on the merits is that the hardship is not likely to be alleviated, then the court cannot be satisfied that the applicant or a child would suffer hardship if leave were not granted.
...
Hardship may be caused to an applicant if leave were not granted to institute proceedings, although the applicant is not in necessitous circumstances. Whatever the financial situation of an applicant may be, his or her loss of a prospective entitlement to property including money, or his or her inability to have the financial and property relations of the parties adjusted or resolved, may constitute hardship. In some cases, where a resolution of the property or financial relationships of the parties is desired, it might be, that the applicant would receive no more or even less, than he or she already owns at law or in equity. Nevertheless, hardship might be caused to the applicant if leave were not granted so as to facilitate such resolution. (emphasis added)
The import of the agreement was to remove the husband’s assets and resources from the reach of the wife and likewise to do the same in relation to the wife’s assets as against the husband.
The agreement recites that the wife “is currently not in receipt of income”.
The agreement recites that the parties intend their marriage to be permanent but desire to contract out of the provisions of Part VIII of the Family Law Act 1975 excluding maintenance rights they may have against each other. The agreement acknowledges each party has made a full and fair disclosure of their financial circumstances.
The agreement purports to preclude the parties from any claims under the then Family Provisions Act 1982 (NSW).
The agreement is silent as to the wife’s prospective role as primary care giver and homemaker but acknowledges that contributions may be made financially and non-financially to the acquisition, conservation and improvement of assets and resources: thus reflecting the provisions of s 79(4)(a) and (b) of the Act.
The agreement is silent as to matters contemplated by s 79(4)( c) and (e) of the Act: contributions to the welfare of the family including homemaker and parenting and the range of matters contained in s 75(2) of the Act. The wife is precluded from compensation for her non-financial contributions during cohabitation and thereafter and no consideration is given to prospective disparity in financial resources after separation.
The agreement whilst leaving the question of spousal maintenance alive, contemplates no provision for the support of the children if separation as contemplated by s 90E of the Act. The inference is that the wife would bear the primary responsibility for the children post-separation. The husband’s post-separation child support failings are referred to above.
There is no provision contemplating the birth of further children in the agreement.
Since the agreement, the parties’ second child has been born. This material change in circumstance, the birth of the second child in particular, has a major impact on the underlying circumstances at the time of the agreement. There is no provision for the birth of any future children in the agreement, so the wife’s prospective financial responsibility as it is left under the agreement grows substantially with the advent of this change, while her entitlement diminished by the failure to recognise her non-financial contributions as referred to above.
The agreement thus inevitably creates “hardship” for the wife.
In Pascot (supra) Le Poer Trench J concluded:
375.    This Agreement has departed from the Act in the manner in which the parties were to divide the assets of the parties under the Agreement. Considerations that are common in deciding property division under secs 72 and 79 of the Act are completely absent in the Agreement. The wife is barred from claiming compensation for non-financial contributions made throughout the marriage; she is not able to claim compensation for future need. Further, the division of the property is not made by pooling assets brought to, and acquired in the course of, the marriage and dividing them equally, but rather divided on a ‘mine’ and ‘yours’ basis.
376.    The husband stated that he wished to maintain control over his largest resource or asset, the J Trust (and the property he bought with the proceeds from that trust), which he brought into the relationship. As the parties had been in a relationship for several years and had started a family together, the husband wanted to prevent the ‘erosion’ of his contribution that was inevitable over the course of the marriage.
377.    If the Agreement is not set aside, the wife would remain in a position in which she is financially responsible for three children under an agreement that does not adequately provide for such a responsibility, as well as her contributions. The terms of the Agreement contain a number of inequities that are increased by the addition of a third child to her financial responsibility.
378.    If the Agreement is set aside, the wife would be able to make an application for orders under secs 72 and 79 of the Act. It is safe to say that the outcome of such an application is likely to be very different to that brought about by the Agreement.
379.    In light of this, I would find that hardship on the part of the wife is established, and that setting the Agreement aside is the only remedy.
380.    The third element is discretionary. Having decided that there is a material change in circumstance and that the change has created serious hardship to the wife.
381. I consider in all the circumstances that the only just course in this case is to set the agreement aside on the ground set out in sec 90K(1)(d). In such a circumstance the court may make orders under sec 90K(3).
Those conclusions are apposite to the present application as discussed above.
An order will be made setting the agreement aside under s 90K(1)(d) of the Act.

The other grounds for relief:

Unconscionability

The provisions of s 90K(1)(e) import common law and equitable principles as to factors vitiating the agreement including duress, undue influence and unconscionability.
Duress at common law avoids contracts where fear was induced so as to deprive a party of free will and can extend to pressure beyond what the law is prepared to countenance as legitimate to the extent that the party’s consent was not a voluntary act (Barton v Armstrong [1980] AC 614 at 635, Crescendo Management Pty Ltd v Westpac Banking Corporation (1988) 19 NSWLR 40 at 45-6).
In Australia & New Zealand Banking Group v Karam [2005] NSWCA 344 the NSW Court of Appeal expressed that duress ought to be confined to its common law basis of unlawful conduct and that where the pressure was lawful, it ought to be dealt with as undue influence or unconscionable conduct.
The evidence of the wife is not indicative of duress in the entering into of the agreement by her. Indeed, while the wife raised the issue of duress in the particulars provided to the husband on 24 April 2015, duress was not referred to as a ground for setting aside the financial agreement in the wife’s final written submissions.
Otherwise equity affords a remedy where there is unconscionability, undue influence or fraud. The de facto wife contends that there was undue influence and/or unconscionability in circumstances leading up to the agreement sufficient to vitiate the agreement.
It is well established that a husband is not presumed to exercise undue influence over his wife (Yerkey v Jones (1939) 63 CLR 649 at 675). However in that decision Dixon J said that although there was no presumption of undue influence, the marital relation had never been divested completely of three “equitable presumptions of an invalidating tendency”. These his Honour detailed as follows at 675-676:
In the first place, there is a doctrine, which may now perhaps be regarded as a rule of evidence, that, if a voluntary disposition in favour of the husband is impeached, the burden of establishing that it was not improperly or run fairly procure would may be placed upon him by proof of circumstances raising any doubt or suspicion. In the second place, the position of strangers who deal through the husband with the wife in a transaction operating to the husband’s advantage may, by that fact alone, be affected by any equity which as between the wife and the husband might arise from his conduct. In the third place, it still is or may be a condition of the validity of a voluntary dealing by the wife for the advantage of her husband that she really obtained an adequate understanding of the actual nature and consequences of the transaction.

In Commercial Bank Of Australia Ltd v Amadio and Anor (1983) 151 CLR 447 Deane J stated at 474:
The jurisdiction of courts of equity to relieve against unconscionable dealing developed from the jurisdiction which the Court of Chancery assumed, at a very early period, to set aside transactions in which expectant heirs had dealt with their expectations without being adequately protected against the pressure put upon them by their poverty (see O'Rorke v Bolingbroke (1877) 2 App Cas 814 at 822). The jurisdiction is long established as extending generally to circumstances in which
(i) a party to a transaction was under a special disability in dealing with the other party with the consequence that there was an absence of any reasonable degree of equality between them, and
(ii) that disability was sufficiently evident to the stronger party to make it prima facie unfair or “unconscientious” that he procure, or accept, the weaker party's assent to the impugned transaction in the circumstances in which he procured or accepted it.
Where such circumstances are shown to have existed, an onus is cast upon the stronger party to show that the transaction was fair, just and reasonable: “the burthen of shewing the fairness of the transaction is thrown on the person who seeks to obtain the benefit of the contract” (see per Lord Hatherley, O'Rorke v Bolingbroke, supra, at 823; Fry v Lane (1888) 40 ChD 312 at 322; Blomley v Ryan (1956) 99 CLR 362 at 428–9).
In Louth v Diprose (1992) 175 CLR 621 Brennan J said at 626-629:
The jurisdiction of equity to set aside gifts procured by unconscionable conduct ordinarily arises from the concatenation of three factors: a relationship between the parties which, to the knowledge of the donee, places the donor at a special disadvantage vis-à-vis the donee; the donee's unconscientious exploitation of the donor's disadvantage; and the consequent overbearing of the will of the donor whereby the donor is unable to make a worthwhile judgment as to what is in his or her best interest. A similar jurisdiction exists to set aside gifts procured by undue influence. In Commercial Bank of Australia Ltd. v Amadio, Mason J. distinguished unconscionable conduct from undue influence in these terms:
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.
Deane J. identified the difference in the nature of the two jurisdictions:
Undue influence, like common law duress, looks to the quality of the consent or assent of the weaker party ... Unconscionable dealing looks to the conduct of the stronger party in attempting to enforce, or retain the benefit of, a dealing with a person under a special disability in circumstances where it is not consistent with equity or good conscience that he should do so.
Although the two jurisdictions are distinct, they both depend upon the effect of influence (presumed or actual) improperly brought to bear by one party to a relationship on the mind of the other whereby the other disposes of his property. Gifts obtained by unconscionable conduct and gifts obtained by undue influence are set aside by equity on substantially the same basis. In White and Tudor's Leading Case in Equity, the notes to Huguenin v Baseley treat the principle applied in cases of unconscionable conduct as an extension of the principle applied in cases of undue influence:
The principle upon which equity will give relief as against the persons standing in [the categories of confidential] relations to the donor, will be extended and applied to all the variety of relations in which dominion may be exercised by one person over another.
The ground for setting aside a gift obtained by unconscientious exploitation of a donor's special disadvantage, as explained in Amadio, can be compared with the ground for setting aside a gift obtained by undue influence, as explained by Dixon J. in Johnson v Buttress:
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 of affecting the alienor's will or freedom of judgment in reference to such a matter. The source of power to practise such a domination 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 antecedently 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. (Emphasis added.)
The similarity between the two jurisdictions gives to cases arising in the exercise of one jurisdiction an analogous character in considering cases involving the same points in the other jurisdiction.
The relationship
There are some categories of confidential relationships from which a presumption of undue influence arises when a substantial gift is made by one party to the relationship to the other — relationships such as solicitor and client, physician and patient, parent and child, guardian and ward, superior and member of a religious community. Public policy creates a presumption of undue influence in cases where the relationship falls into one of the recognized categories. Those categories do not exhaust the cases in which it may be held that it is contrary to conscience for a donee to retain a gift. In cases where the relationship is not one of confidentiality, a gift may be impeached where the evidence shows that in fact it was procured by unconscionable conduct. Where a gift is impeached on the ground that it was obtained by unconscionable conduct consisting in an unconscionable exploitation of an antecedent relationship, the relationship is one in which one party stands in a position of special disadvantage vis-à-vis the other. Such relationships are infinitely various, the common feature being that the donor is, to the knowledge of the donee, in a position of special disadvantage vis-à-vis the donee: that is to say, in matters in which their interests do not coincide, the donor's capacity to make a decision as to his or her own best interest is peculiarly susceptible to control or influence by the donee. As Mason J. said in Amadio:
I qualify the word "disadvantage" by the adjective "special" in order to disavow any suggestion that the principle applies whenever there is some difference in the bargaining power of the parties and in order to emphasize that the disabling condition or circumstance is one which seriously affects the ability of the innocent party to make a judgment as to his own best interests, when the other party knows or ought to know of the existence of that condition or circumstance and of its effect on the innocent party. (emphasis added)
The evidence of the wife was that she was an active and informed participant in the negotiations leading up to the agreement. She is not inexperienced in the ways of business. She was as at all times represented by a solicitor and the negotiations went to and fro for an extended period of time. By the time of the agreement the parties had married and one child had been born of the marriage.
Yet notwithstanding the deficiencies in the agreement as to her entitlements as discussed above it was entered into.
There is no evidence to sustain the wife’s contention as to unconscionable conduct.

Repudiation or estoppel (s 90K(1)(b)):

The wife asserts that the husband by reason of the procuration of the transfer of the D Town property to the parties jointly from the Fewster Trust and his consequence relinquishment of his rights under the Trust amounted to a repudiation of the agreement or an estoppel by conduct from the husband now asserting the validity of the agreement.
Section 90KA provides:
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 principles that are to be applied in determining whether a party to a contract has repudiated that contract such that the other party can terminate the contract were succinctly stated by the Full Court in Donald and Forsyth [2015] FamCAFC 72 at [67] and are:
There must be either a breach or an anticipatory breach of an essential term of the contract, or a sufficiently serious breach of a non-essential term (Koompahtoo Local Aboriginal Land Council and Anor v Sanpine Pty Limited and Anor [2007] HCA 61; (2007) 233 CLR 115); and
The other party must be ready and willing to complete the contract (Foran v Wight [1989] HCA 51; (1989) 168 CLR 385).
Estoppel by conduct was considered by Deane J in Commonwealth of Australia v Verwayen (1990) 170 CLR 394 at 444-446 in the following terms:
1.        While the ordinary operation of estoppel by conduct is between parties to litigation, it is a doctrine of substantive law the factual ingredients of which fall to be pleaded and resolved like other factual issues in a case. The persons who may be bound by or who may take the benefit of such an estoppel extend beyond the immediate parties to it, to their privies, whether by blood, by estate or by contract. That being so, an estoppel by conduct can be the origin of primary rights of property and of contract.
2.        The central principle of the doctrine is that the law will not permit an unconscionable -- or, more accurately, unconscientious -- departure by one party from the subject matter of an assumption which has been adopted by the other party as the basis of some relationship, course of conduct, act or omission which would operate to that other party's detriment if the assumption be not adhered to for the purposes of the litigation.
3.        Since an estoppel will not arise unless the party claiming the benefit of it has adopted the assumption as the basis of action or inaction and thereby placed himself in a position of significant disadvantage if departure from the assumption be permitted, the resolution of an issue of estoppel by conduct will involve an examination of the relevant belief, actions and position of that party.
4.        The question whether such a departure would be unconscionable relates to the conduct of the allegedly estopped party in all the circumstances. That party must have played such a part in the adoption of, or persistence in, the assumption that he would be guilty of unjust and oppressive conduct if he were not to depart from it. The cases indicate four main, but not exhaustive, categories in which an affirmative answer to that question may be justified, namely, where that party:
(a) has induced the assumption by express or implied representation;
(b) has entered into contractual or other material relations with the other party on the conventional basis of the assumption;
(c) has exercised against the other party rights which would exist only if the assumption were correct;
(d) knew that the other party laboured under the assumption and refrained from correcting him when it was his duty in conscience to do so.
Ultimately, however, the question whether departure from the assumption would be unconscionable must be resolved not by reference to some preconceived formula framed to serve as a universal yardstick but by reference to all the circumstances of the case, including the reasonableness of the conduct of the other party in acting upon the assumption and the nature and extent of the detriment which he would sustain by acting upon the assumption if departure from the assumed state of affairs were permitted. In cases falling within category (a), a critical consideration will commonly be that the allegedly estopped party knew or intended or clearly ought to have known that the other party would be induced by his conduct to adopt, and act on the basis of, the assumption. Particularly in cases falling within category (b), actual belief in the correctness of the fact or state of affairs assumed may not be necessary. Obviously, the facts of a particular case may be such that it falls within more than one of the above categories.
5.        The assumption may be of fact or law, present or future. That is to say it may be about the present or future existence of a fact or state of affairs (including the state of the law or the existence of a legal right, interest or relationship or the content of future conduct).
6.        The doctrine should be seen as a unified one which operates consistently in both law and equity. In that regard, "equitable estoppel" should not be seen as a separate or distinct doctrine which operates only in equity or as restricted to certain defined categories (eg acquiescence, encouragement, promissory estoppel or proprietary estoppel).
7.         Estoppel by conduct does not of itself constitute an independent cause of action. The assumed fact or state of affairs (which one party is estopped from denying) may be relied upon defensively or it may be used aggressively as the factual foundation of an action arising under ordinary principles with the entitlement to ultimate relief being determined on the basis of the existence of that fact or state of affairs. In some cases, the estoppel may operate to fashion an assumed state of affairs which will found relief (under ordinary principles) which gives effect to the assumption itself (e.g. where the defendant in an action for a declaration of trust is estopped from denying the existence of the trust).
8.        The recognition of estoppel by conduct as a doctrine operating consistently in law and equity and the prevalence of equity in a Judicature Act system combine to give the whole doctrine a degree of flexibility which it might lack if it were an exclusively common law doctrine. In particular, the prima facie entitlement to relief based upon the assumed state of affairs will be qualified in a case where such relief would exceed what could be justified by the requirements of good conscience and would be unjust to the estopped party. In such a case, relief framed on the basis of the assumed state of affairs represents the outer limits within which the relief appropriate to do justice between the parties should be framed."
There is no issue as to the actions of the husband around the ultimate transfer of the D Town property to the parties jointly from the Fewster Trust.
Yet the Trust, as it was under the agreement, was always his resource to deal with as he saw fit. A disposition of his beneficial interest could not and did not amount to a repudiation of the agreement not could it amount to an estoppel by conduct by reason of the application of the principles set out above.
As to the acquisition of the D Town property, the prospect of jointly acquired property is clearly contemplated in the agreement. That dealing also could not amount to repudiation or estoppel by conduct.
This relief sought by the wife fails.

Fraud – non-disclosure section 90K(1)(a)

Much was made by the wife’s counsel during the husband’s cross examination as to his non-disclosure at the time of the agreement and as to his present circumstances in the context of the spousal maintenance application.
The relevant time for this assertion is at the time of the agreement. It appears that the agreement itself provided perfunctory disclosure by both parties in the most general terms. The wife was in possession of correspondence from the husband’s accountant as to the husband’s financial affairs by no later than April 2006, eight months before the agreement.
The lack of further enquiry by her solicitor in the light of the wife’s contention as to this relief is startling.
In general terms that letter provided an overview of the husband’s circumstances. The agreement itself recites that the parties acknowledge each party has made a full and fair disclosure of their financial circumstances.
The wife makes no complaint as to any request for further financial disclosure being unanswered.
The question of non-disclosure must be considered in the context of where it appears in the section. Section 90K(1)(a) provides a remedy where there is fraud.
The concept of “fraud” involves a conscious wrongdoing or deceit (Kokl (1981) 7 Fam LR 591). It is well settled that a false representation made knowingly without belief in its truth, or recklessly or carelessly as to whether true or false, will constitute fraud. Such a circumstance can be perpetrated by omission as well as by commission as is reinforced by the terms of the section.
In Hoult v Hoult [2011] FamCA 1023, Murphy J rejected submissions that material non-disclosure was sufficient, by itself, to attract s 90K(1)(a) and expressed at [125] that:
…the section does not make material non-disclosure fraudulent per se. Fraud for the purposes of s 90K(1)(a) can, plainly, include material non-disclosure, but not every material non-disclosure is fraudulent. The inclusion of the phrase in parenthesis in s 90K(1)(a) is explained in my view by the desirability of making clear what might otherwise not clearly emerge from the position at common law or in equity. As a general proposition, at common law a finding of fraud in and about an agreement requires (among other things) a misrepresentation. A misrepresentation is, generally speaking, not constituted by silence or non-disclosure (material or otherwise).
The wife proffers no evidence as to the nature of the husband’s omissions at the time of the agreement save to assert that the finer details of his circumstances were not known.
There was no fundamental non-disclosure of a material matter alleged sufficient to conclude that the agreement was “obtained” by fraud.
The wife’s relief in this regard fails.

Interim spousal maintenance

Section 72 of the Act sets out the relevant provisions in relation to the right to spouse maintenance. The Court can make such order as it considers proper (s 74).
Section 72 provides that a party to a marriage is a liable to maintain the other party, to the extent that the first mentioned party is reasonably able to do so, if, and only if, that other party is unable to support herself or himself adequately whether:
a)By reason of having the care and control of a child of the marriage who has not attained the age of 18 years,
b)By reason of age or a physical or mental incapacity for appropriate gainful employment, or
c)For any other adequate reason,
having regard to any relevant matter referred to in subsection 75(2) of the Act.
There is no fettering principle that the pre-separation standard of living must automatically be awarded and reasonableness in the circumstances is the guiding principle (see Bevan & Bevan (1995) FLC 92-600).

It is not conceded on behalf of the husband that the wife is unable to support herself adequately by reason of any of the matters referred to in s 72.
The wife has the onus of establishing her right to an order for spouse maintenance.
The wife’s circumstances are referred to above. She has the full time care of two young children. She has commenced a small business that at this point does not produce to her an income but may into the future. At present she is reliant on her capital to provide for her and the children’s living expenses. She has about $250,000 in funds at bank to which she has access. She receives some child support
Her asserted reasonable expenses are as follows:
Studio rent   $410
Heath insurances                  $ 92
Food   $200
Household supplies              $100
House repairs        $1500
Electricity  $ 35
Heating   $ 40
Telephone/Internet               $ 90
Motor vehicle  $120
Fares/parking  $ 20
Clothing  $200
Child minding   $100
Holidays  $200
Chemist   $ 40
Gardening   $ 50
Cleaning   $250
Repairs   $100
Dry cleaning   $ 30
Books   $ 50
Gifts   $ 35
Hairdressing/toiletries        $ 40
Total:  $3,702
Otherwise the wife meets the financial needs of the children save for child support payments received.
On 20 April 2015 the wife received a determination as to change of child support. The husband’s child support assessment was determined at $33,520 per annum. Previously he had been assessed at $2,644 per annum based on his 2014 taxable income of $7,096.
Clearly his previous representations to the Child Support Agency are markedly different to the financial circumstances he presents to the Court in these proceedings.
The wife was cross examined on her expenses.
Her payments for house repairs are a capital expense and will be ignored.
Her clothing expense reflects what she spent when living with the husband. A more modest sum of $150 will be allowed.
She has health issues that require her to get domestic assistance currently provided by friends. Her cleaning expenses however will be reduced to $150.
Otherwise the wife contended that her expenses reflected what was spent when living together.
Having regard to the above matters the wife’s reasonable expenses in the context of interim spouse maintenance are assessed at $2,052 per week.
It is clear the without recourse to capital the wife is unable to support herself adequately. She has the care of two young children with little support in a physical sense from the husband. She is endeavouring to start a business in which she has invested not insignificant capital. To seek paid employment would put that investment at risk. However she needs to either commence earning from that business or in the alternative in time seek paid employment.
She has recourse to capital but it is well settled that she should not be required to live on this especially where property proceedings are now imminent.
The considerations in s 75(2) must be addressed. In so far as they are relevant to present application they are:
a)The age and health of the parties are considered above. Notwithstanding the husband’s age he continues to be involved in his family business interests and the operation of D Town,
b)The husband’s income capacity from various sources is overwhelmingly greater than the wife. There is no evidence that the husband will not continue to be receipt of such continuing benefits. The property of the parties will await determination in the context of the wife’s application for property orders. The wife is struggling in terms of her income capacity at present,
c)The wife has the care of the parties’ two young children,
d)As relevant the commitments of the parties are considered above,
e)The parties during cohabitation enjoyed a comfortable lifestyle,
f)The payment of maintenance to the wife may assist her in the new business enterprise and in obtaining income therefrom taking at least some of the financial strain off her circumstances,
g)The marriage was for about 10 years during which the wife was out of the work force and as such her present capacity to earn is by inference diminished,
h)The wife seeks to continue her role as primary carer for the children.
The Court is comfortably satisfied that the wife is unable to support herself adequately at this time by reason of the provisions of ss 72(1)(a) and (c).
The husband concedes his capacity to meet a spouse maintenance order. It is expected that property proceedings if contested in this Registry will be listed for final hearing within six to nine months.
In all the circumstances it is proper that there will be an order that the husband pay to the wife interim spousal maintenance of $1,500 per week.
Orders will be made accordingly.

I certify that the preceding one hundred and fifty-five (155) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Foster delivered on 28 July 2015.

Associate:

Date: 28 July 2015