FLETCHER and FLETCHER
[2024] FCWA 114
•6 JUNE 2024
JURISDICTION : FAMILY COURT OF WESTERN AUSTRALIA
ACT: FAMILY LAW ACT 1975
LOCATION: PERTH
CITATION: FLETCHER and FLETCHER [2024] FCWA 114
CORAM: SUTHERLAND CJ
HEARD: [REDACTED]
DELIVERED : 6 JUNE 2024
FILE NO/S: [REDACTED]
BETWEEN: MS FLETCHER
Applicant
AND
MR FLETCHER
Respondent
Catchwords:
BINDING FINANCIAL AGREEMENT - Where parties signed a financial agreement approximately five years prior to their marriage - Where wife seeks orders setting aside the agreement on multiple grounds - Where husband conceded that cl 23 of the agreement was invalid for seeking to contract out of the provisions of the Family Provision Act 1972 (WA) - Where the agreement, except for cl 23, was declared to be binding and wife's application to set aside the agreement was otherwise dismissed - Turns on its own facts
Legislation:
Family Law Act 1975 (Cth)
Family Provision Act 1972 (WA)
Category: Not Reportable
Representation:
Counsel:
| Applicant | : | Senior Counsel A, with Junior Counsel A |
| Respondent | : | Senior Counsel B, with Junior Counsel B |
Solicitors:
| Applicant | : | Law Firm A |
| Respondent | : | Law Firm B |
Case(s) referred to in decision(s):
Australian Goldfields NL (in liq) v North Australian Diamonds NL [2009]
WASCA 98
Balson & Sandberg [2023] FedCFamC2F 390
Barre & Barre [2021] FamCA 1010
Chaffin & Chaffin [2019] FamCA 260
Fewster & Drake (2016) FLC 93-745
Fitzgerald v Masters (1956) 95 CLR 420
G Scammel & Nephew Ltd v Ouston [1941] AC 251
Grist v Bailey [1967] Ch 532
Phak & Xu [2015] FamCA 939
Re Media, Entertainment and Arts Alliance, Ex Parte Hoyts Corp Pty Ltd
(1993) 178 CLR 379
Upper Hunter County District Council v Australia Chilling and Freezing Co
Ltd (1968) 118 CLR 429
Westpork Pty Ltd v Bio-Organics Pty Ltd [2018] WASC 291
WORDS IN SQUARE BRACKETS REPLACE WORDS USED IN THE ORIGINAL JUDGMENT – PARTIES' NAMES AND IDENTIFYING DETAILS HAVE BEEN CHANGED.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Fletcher and Fletcher has been approved by the Family Court of Western Australia pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
This copy of the Court's Reason for judgment may be subject to review to remedy minor typographical or grammatical errors (r 312(b) Family Court Rules 2021 (WA)), or to record a variation to the orders pursuant to r 311 Family Court Rules 2021 (WA).
INTRODUCTION
1In November 2007, approximately five years prior to their marriage, [Mr Fletcher] (the husband) and [Ms Fletcher] (the wife) signed a financial agreement (the Agreement) pursuant to s 90B of the Family Law Act 1975 (Cth) (the Act).
2On [REDACTED] July 2021, the wife commenced proceedings, inter alia, seeking final orders for property settlement and spousal maintenance. In summary, the wife sought that she receives 40 per cent of the parties' total property interests (which she estimated to be approximately $164,000,000.00), together with spousal maintenance in the sum of $15,000 per month until September 2033 (or alternatively lump sum spousal maintenance in the amount of $1,800,000.00). In the event the husband relied on the Agreement, then the wife sought that it be declared not binding on the parties or be set aside pursuant s 90K of the Act.
3Pursuant to orders made by the Court on 8 October 2021, the wife was required to file and serve a Statement of Claim stating all relevant facts and identifying all relevant principles of law relied upon in support of her contention; and the husband was required to file and serve a Statement of Defence.
4For the purposes of the trial, the wife relied upon a "Proposed Amended Statement of Claim" filed on 28 September 2022 (Amended Claim) (a copy of which is annexed to these Reasons as Annexure A). In her Amended Claim, despite the orders originally sought by her, the wife did not assert that the Agreement was not binding on the parties; and she did not pursue this issue at trial. Accordingly, it was common ground that the Agreement complied with the requirements of the Act, and accordingly, is binding. The only matter for determination was whether the Agreement (either wholly or partially) should be set aside.
5In summary, the wife sought to set aside the Agreement: Firstly, pursuant to s 90K(1)(d) of the Act, on the basis that since the making of the Agreement, a material change has occurred, and as a result of the change, the wife and the parties' children will suffer hardship if the Court does not set the agreement aside. Secondly, pursuant to s 90K(1)(b) of the Act, on the basis that the Agreement is void, voidable or unenforceable, by reason of uncertainty and common mistake. In the event that the Court did not set aside the Agreement in its entirety, then the wife sought that clause 23, 26, 28, and part of clause 6 be set aside and declared to be invalid, including pursuant to ss 90E and/or 90F of the Act.
6The husband sought that the wife's application be dismissed.[1] The husband relied upon an amended Statement of Defence filed on 14 November 2022 (Amended Defence) (a copy of which is annexed to these Reasons as Annexure B).
[1] Husband’s Amended Form 1A Response filed 9 December 2021.
7For the purposes of the trial, the wife relied upon her affidavits sworn on [REDACTED] July 2022, 4 September 2022, and 10 January 2023.
8The trial commenced before me on [REDACTED] March 2024. Both parties were represented by Senior and Junior Counsel at the trial. In addition to counsels' oral submissions, both parties provided very helpful written submissions, including: (1) the wife's Papers for the Judicial Officer filed on 3 November 2023 and Outline of Opening Address filed on 27 March 2024; and (2) the husband's Outline of Opening Submissions filed on 23 February 2024 and Outline of Closing Submissions handed up on the last day of the trial. Counsel also referred to a large number of legal authorities, which I have also considered in preparing these Reasons.
9The wife gave some brief oral evidence in chief and then was cross‑examined. After the wife's case was completed, the husband elected not to give any evidence and instead, sought the dismissal of the wife's application. However, during closing submissions, the husband conceded that clause 23 of the Agreement was invalid for seeking to contract out of the provisions of the Family Provision Act 1972 (WA). The wife appropriately did not contend that the invalidity of clause 23 on this basis otherwise affected the validity of the balance of the Agreement.
10As will become evident from these Reasons, save and except for clause 23, I am not satisfied that the Agreement (or any part thereof) should be set aside, as sought by the wife.
BACKGROUND FACTS
11The parties met in 1999 when they were both working at the same company. The husband was one of the company's directors and the wife was the administration manager. At the time, the husband was 36 years old and the wife was 20 years old.
12The parties commenced a romantic relationship with each other in or about January 2003 (shortly after they had each separated from their respective spouses). They commenced living together in February 2003. The parties were eventually married in January 2013.[2]
[2]Wife’s Amended Claim at [2] and [6].
13In 2005, the husband established a discretionary trust: the [Mr Fletcher Family Trust]. The husband is the trustee and guardian of the trust, as well as a general beneficiary. The husband's brother, [Mr G], is the appointor of the trust. The wife is one of two primary beneficiaries, along with the husband's sister.[3] As of the financial year ending 30 June 2007, the trust's primary income sources were professional fees (presumably deriving from the husband), share dividends, and profits from the sale of investments. For the 2007 financial year, the profits (net income) of the trust were distributed as to $502,093 to the husband; and $71,480 to the wife.[4]
[3] Wife’s affidavit sworn 10 January 2023: annexure 1.
[4] Exhibit A1.
14It was common ground that at the time the parties signed the Agreement, the husband was the legal owner of the cash and shareholdings in the Mr Fletcher Family Trust; and he remains so. However, for the purposes of the trial, the wife maintained that the husband was not the equitable owner of the cash and shareholdings at the time the parties signed the Agreement, and that this position remains so.[5]
[5] Wife’s Amended Claim at [27.17] – [27.19]; Husband’s Amended Defence [19] – [20].
15At the time the parties signed the Agreement in November 2007, the husband was 44 years old and the wife was 28 years old.
The Agreement
16The Agreement contained Recitals as to various matters, including setting out that:
a)The parties had been discussing their intention to enter into the Agreement for a period of approximately three years.[6]
b)At the time the parties entered the Agreement, the husband worked as [a financial officer] and earned approximately $500,000 per annum; and the wife was a company director and earned approximately $60,000 per annum.[7]
c)Each party owned separate property and wanted to protect current and future separate property from any claim by the other party.[8]
d)At the date of the Agreement, the husband's separate assets, financial resources and liabilities were as set out in Schedule 1; and the wife's were as set out in Schedule 2.[9] Both parties confirmed that their relevant schedule fully and accurately disclosed the identity, nature and estimated value of their respective assets, financial resources, and liabilities as at the date of the Agreement.[10]
[6] Agreement: Recital P.
[7] Agreement: Recitals E and F.
[8] Agreement: Recital T.
[9] Agreement: Recitals U and W.
[10] Agreement: Recitals V and X. Schedule 1 and Schedule 2 included a separate heading for "Superannuation". This appeared to be superfluous, given that the husband’s assets and financial resources were included in the first table of Schedule 1 and the wife did not set out any financial resources in Schedule 2.
17In summary, the operative clauses of the Agreement provided that within 30 days of the stamping of the Agreement, the husband pays the wife the sum of $150,000.[11] On the breakdown of the parties' relationship, then:
a)The husband pays the wife the sum of $150,000 if the parties separated within 12 months of the date of the Agreement; and an additional $50,000 for each subsequent year of the relationship after the first 12 months of the date of the Agreement.[12]
b)Each party retains their separate property to the exclusion of the other party.[13]
c)Any shared property (which was defined to be property which is not separate property)[14] be divided in accordance with the proportions held by them, whether in specie or by sale and division of the net proceeds in proportions equal to their respective legal entitlements.[15]
[11] Agreement: clause 7.
[12]Agreement: clause 6(a) and (b).
[13] Agreement: clauses 8 and 10.
[14] Agreement: Recital BB.
[15] Agreement: clause 22.
18Schedule 1 to the Agreement (in relation to the husband) was as follows:
Assets
House – [Property C]
$2,500,000
[Husband's Motor Vehicle D]
$100,000
[Husband's Bank Account E]
$210,000
[Husband's Share Investments F]
$300,000
Cash and Shareholdings in name of Mr Fletcher, [Mr Fletcher Family Trust], and [Mr Fletcher Superannuation Fund]
$3,000,000
Loan to [Company G Distribution]
$105,000
[Husband's Luxury Watch 1]
$5,200
[Husband's Luxury Watch 2]
$1,800
[Husband's Luxury Watch 3]
$1,900
[Luxury brand] mother of pearl cufflinks
$700
Diamond cufflinks set in black onyx and 18ct white gold
$1,300
[Husband's Golf Club Set] series; 10D, 3W, 3H, 5W4 – S graphite irons
$4,500
Liabilities
Home Loan
$620,000
Overdraft
$743,000
Line of Credit ([Company G] Loan)
$137,000
ATO (ITR 2007)
E$300,000
[Husband's Bank Card H]
-
[Husband's Bank Card I]
-
[Husband's Bank Card J]
-
Superannuation
(left blank as in the original Agreement)
19Schedule 2 to the Agreement (in relation to the wife) was as follows:
Assets
[Wife's Motor Vehicle 1]
$10,000
[Wife's Motor Vehicle 2]
$40,000
[Wife's two dogs]
Shareholdings in name of Ms Fletcher
$3,500
Diamond stud earrings 18ct yellow gold, white gold tipped claws, 1.37ct each diamond solitaire, 2.75ct total weight
$10,200
Diamond Cross necklace pendant, 15 round brilliant cut diamonds; 4 x 0.08ct, 1 x 0.07ct. 10 x 0.035ct
$1,945
White gold bangle with 12 sapphire's and 12 diamonds
$3,500
Diamond necklace
$22,000
Diamond ring, 16 round brilliant cut diamonds, in 750 white gold, 3.77cts total
$16,400
Diamond dress ring, 5 round brilliant cut diamonds 0.49ct total, 6 baguette cut diamonds 0.25ct total, channel setting
$4,100
[Wife's Luxury Watch 1]
$2,200
Necklace string of [Ocean area 1] pearls
$3,000
[Ocean area 1] pearl drop earrings
$300
[Ocean area 2 pearl] stud earrings: Keshi Grade 1
$500
[Ocean area 2 pearl] and 18ct yellow gold dragonfly brooch: Keshi Grade 1
$1,350
[Wife's Golf Club Set]: 11D, 3W, 3H, 4 – S graphite irons
$2,500
Liabilities
[Wife's Bank Card 1]
$2,195
[Wife's Bank Card 2]
-
Superannuation
(left blank as in the original Agreement)
Relevant events after the signing of the Agreement:
20Shortly after the parties executed the Agreement, the wife received payment of the sum of $150,000, as provided for by the Agreement.[16]
[16] Wife’s affidavit sworn [REDACTED] July 2022 at [33]. See also the wife’s affidavit sworn 4 September 2022 at [36] wherein the wife maintained that the payment came from the Mr Fletcher Family Trust, and not the husband. However, I am not persuaded that the source of the funds used by the husband to make the payment was relevant.
21At the time the parties signed the Agreement, they did not have any children. Subsequently they had three children, born in 2008, 2013, and 2015.[17]
[17] Wife’s Amended Claim at [16].
22After the first child's birth, the wife ceased work and thereafter, did not resume full-time employment. However, in subsequent years, the wife continued to be allocated income and/or other distributions from the Mr Fletcher Family Trust.[18] After the first child's birth, the parties adopted largely traditional roles in the family: with the husband being the primary financial provider and the wife being the primary homemaker and carer to the children.
[18] Wife’s affidavit sworn [REDACTED] July 2022 at [147] – [150].
23In August 2008 (approximately eight months after the parties signed the Agreement) the parties established a new superannuation fund: the [K Superannuation Fund], of which they were (and remain) members. The parties were (and remain) the co‑directors of the trustee company: [the K Superannuation Fund Pty Ltd]. The husband subsequently closed down the Mr Fletcher Family Trust. The wife conceded under cross-examination that the parties hold their interests in the K Superannuation Fund in segregated accounts.
24Over the years, the parties made significant contributions to their member entitlements in the K Superannuation Fund.
25In or about late October 2010 the parties purchased a property in [street name, suburb name] ([Property L]) for $1,850,000, on the basis that they contributed equally to the purchase costs. The purchase / ownership arrangements were as follows: (1) the husband as trustee of the Mr Fletcher Family Trust became the registered proprietor of the property in March 2011; and (2) the funds provided by the wife to purchase the property (which she raised by selling shares held in her name) were recorded as a loan to the Trust. The parties executed a Co‑Ownership Agreement dated 21 February 2011 in relation to the property, setting out, inter alia, (1) that the property was owned by them jointly and held in the Mr Fletcher Family Trust; and (2) how the property would be dealt with in the event the parties separated.[19]
[19] The Co-Ownership Agreement was annexure 5 to the wife’s affidavit sworn on 4 September 2022.
26After its purchase, Property L was rented out to the wife's sister and her then-partner (until he moved out in June 2021). The wife's sister paid rent to the Mr Fletcher Family Trust up to and including 2019.
27In August 2018, the wife received an inheritance of $51,636.75 from her aunt. The wife deposed that after separation, she spent her inheritance on paying her legal fees and day to day living expenses.[20]
[20] Wife’s affidavit sworn [REDACTED] July 2022 at [248].
28In July 2019 the parties purchased a property in [street name, suburb name] ([Property M]) for $4,800,000 as their new residence. The property was registered in the joint names of the parties (and was unencumbered).
29In April 2020, the husband purchased a 15.6 metre [Motorboat] for approximately $1,925,000. The boat was registered in the wife's sole name.
30The parties physically separated on a final basis in May 2021.
The current proceedings and relevant events thereafter:
31The wife commenced the proceedings on [REDACTED] July 2021. On the same date, the wife filed a financial statement (2021 financial statement) in which she deposed that she had "Nil" income from all sources. The wife also deposed in the 2021 financial statement that she was in control of assets with a net value of $15,493,968.[21] This was broken down as follows:[22]
a)The wife's assets totalled $14,269,178.00 (including but not limited to a 50 per cent interest in [Property M] valued at approximately $3,250,000; a share portfolio valued at approximately $1,200,000; [Mineral Company N] shares valued at approximately $600,000; the Motorboat valued at approximately $1,900,000; and various benefits and/or distributions from the Mr Fletcher Family Trust relating to the 2020 financial year (which had not yet been received by her) totalling approximately $6,900,000. (I am satisfied that the wife mistakenly overvalued the Mineral Company N shares and their actual value was approximately $6,000).
b)The wife's liabilities totalled $587,131, including an "anticipated 2020 tax liability" of $584,541.
c)The wife's superannuation interests in the K Superannuation Fund valued at approximately $1,811,921.
[21] Wife’s Amended Claim at [12].
[22] Wife’s Financial Statement filed [REDACTED] July 2021.
32The husband subsequently arranged to prepare amended 2020 financial statements for the Mr Fletcher Family Trust that reduced the distributions to the wife and negated the anticipated tax liability of $584,541.[23] The parties disputed that the wife was entitled to receive all the benefits and/or distributions from the Mr Fletcher Family Trust, as asserted by her. In particular, the wife denied the husband's allegations that she signed off on the draft 2020 financial statements for the Mr Fletcher Family Trust, by affixing the husband's electronic signature to the document, without his consent.[24]
[23] Wife’s affidavit sworn [REDACTED] July 2022 at [259] – [260].
[24] Wife’s affidavit sworn 4 September 2022 at [53].
33The husband executed a separation declaration pursuant to the terms of the Agreement on [REDACTED] July 2021.[25]
[25] Wife’s Amended Claim at [7].
34In or about August 2021 the wife commenced receiving Family Tax Benefits in the sum of approximately $120 per week, presumably on the basis of her assertion to Centrelink that she met the income means test (and noting that the benefits are not subject to an asset means test). The wife deposed that since August 2021, the Family Tax Benefits have been her only source of income.[26] However, she also deposed that the husband paid child support as assessed, as well as the children's private school fees.[27]
[26] Wife’s affidavit sworn [REDACTED] July 2022 at [48].
[27] Wife’s affidavit sworn [REDACTED] July 2022 at [50] – [51].
35On 18 August 2021 the husband filed a financial statement in which he deposed he was in control of assets with a net value of $148,646,394.[28]
[28] Wife’s Amended Claim at [13].
36On 14 March 2022, the Court made interim orders by consent, including that the husband have exclusive use and occupation of Property M. The Court also noted the husband's undertaking to pay the wife the sum of $850,000 within a specified period, on the basis that: (1) if the Agreement is upheld, the payment was made pursuant to the Agreement; and (2) if the Agreement is set aside, the payment of the sum be characterised by the trial judge. In March 2022, the wife secured rental accommodation, on the basis that she paid two years rent in advance (in the sum of $208,800). The wife funded the lump sum rental payment from the $850,000 payment she received from the husband.[29]
[29] Wife’s affidavit sworn [REDACTED] July 2022 at [40].
37Pursuant to interim parenting orders made by the Court on 21 March 2022, as varied on 14 July 2023: (1) the eldest child lives with the husband and spends time with the wife as agreed between the parties, after taking into account any wishes expressed by the child and the reasons for those wishes; and (2) the two younger children live with the wife and spend defined time with the husband.
APPLICATION TO SET ASIDE THE AGREEMENT PURSUANT TO SECTION 90K(1)(d) OF THE ACT
38The wife sought that the Agreement be set aside on the basis that since the making of the Agreement, a material change had occurred (being circumstances related to the care, welfare, and development of children of the marriage) and as a result, she and the children will suffer hardship if the Agreement was not set aside.[30] The wife set out particulars of her claim at paragraphs 16 to 26 inclusive of her Amended Claim.
[30] Wife’s Amended Claim at [15].
39Section 90K(1)(d) of the Act provides that a court may make an order setting aside a financial agreement if, and only if, the court is satisfied 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. Section 90K(2)(b) of the Act provides that for the purposes of s 90K(1)(d), a person has caring responsibility for a child if a parenting order provides that the child is to live with the person or the person has parental responsibility for the child.
40As the wife seeks to set aside the Agreement under s 90K(1)(d), she must establish: firstly, that there has been a material change in circumstances relating to the care, welfare and development of a child; and secondly, that the change will cause either the child or the person with caring responsibility for the child to suffer hardship if the Agreement is not set aside. Even if so established, the Court still has a discretion whether to set the Agreement aside.
Material change
41The wife maintained that the birth of the parties' first child constituted a material change in circumstances pursuant to s 90K(1)(d); and if the Court was not so satisfied, then the births of the younger children constituted a material change in circumstances.
42In Fewster & Drake (2016) FLC 93-745 at [62], the Full Court stated that the birth of a child may be a material change in circumstances for the purposes of s 90K(1)(d), depending upon all of the circumstances.
43In this case, I am not persuaded that the births of the children, in and of itself, or the circumstances following the births of the children, constituted a material change, for the following reasons:
44 Firstly, the wife submitted that she ceased full-time employment in 2008 after the first child was born, and thereafter was his (and the younger children's) primary carer. The wife further submitted that since the births of the children, she has not returned to full-time employment and has compromised her career prospects and earning capacity.
45However, it is clear that prior to entering into the Agreement, the parties expressly contemplated the possibility that they may have children in the future; and the status of the Agreement if they did so. In particular: Recital EE of the Agreement recorded that before entering the Agreement, the parties had regard to the possibility that one or both of them may be subject to a change of circumstances, including the birth of a child of their relationship. Clause 25 of the Agreement then specifically provided that:
25.The parties intend the agreement to be binding even if a child (or children) is born to the parties or is mutually accepted into their household. The parties will make separate arrangements for child support and the care of the child (or children) both during and, if necessary, after their separation.
46I concur with the husband's submission that the births of the parties' children were eventualities to which the parties expressly turned their minds entering into the Agreement and they determined that it should not impact upon the validity of the Agreement.[31]
[31] Husband’s Outline of Closing Submissions at [16].
47 Secondly, the wife maintained that the fact of the parties' separation, the children's care arrangements after separation, and the significant disruption to the children's living arrangements (including spending time with each of the parents in two different houses) constitutes a further material change. I do not agree. As Forster J stated in Chaffin & Chaffin [2019] FamCA 260 at [185]:
185.It is life experience that upon separating the primary obligation as to parenting will often fall upon one parent, in most cases the mother. It is also life experience that the other parent save for exigencies such as to risk etc will play a significant if not substantial role in their child or children's lives. Such a result imposes on the primary carer an obligation that can be regarded as "an appreciable detriment" in having to undertake a primary caring role when during cohabitation the household comprises both parents. Such a circumstance alone cannot amount to hardship in the context of s90K(1)(d). It represents simply one of the expected exigencies of relationship breakdown.
48The wife pointed to the decision of Balson & Sandberg [2023] FedCFamC2F 390 at [89] in maintaining that the wife had established a material change pursuant to s 90K(1)(d). In Balson's case, the Court discussed the decision in Chaffin & Chaffin[32] in which the court found that a material change in circumstances was established in the circumstances where the parties have three children, one of the children has special needs, the wife has had sole care of the children since the parties separated and the father had not spent any time with them. However, the circumstances in this case are quite different. In this case, since separation, both parties have established their own separate households. Pursuant to interim orders made by the Court, the eldest child lives with the husband and the two younger children live with the wife. Interim orders have also been made for each parent to spend time with the child/ren not in their full-time care. Since separation, the husband has continued to financially provide for the children, including paying child support to the wife, as assessed, and meeting all of the children's private school fees and related costs.[33] In my view, such arrangements are not outside of the realm of normal expectation for separating parents exercising their parental obligations. I concur with the husband's submission that the fact that the children spend time with each parent in two separate houses is to be expected following the parties' separation and does not constitute a material change in circumstances.[34]
[32] Chaffin & Chaffin [2019] FamCA 260.
[33] In her trial documents, the wife raised concerns about the prospect of the husband ceasing to pay the children's private school fees at some point in the future. In response, the husband gave an undertaking to the Court to pay as and when they fall due, 100 per cent of the children's school fees and other specified costs until they each complete their secondary education. Refer to the husband’s Undertaking dated 26 March 2024; and handed up in Court on the same date.
[34] Husband's Outline of Closing Submissions at [19].
49 Thirdly, the wife relied upon the establishment of the
K Superannuation Fund after the Agreement was executed (as set out in paragraphs 16A to 16K inclusive of her Amended Claim) as a material change in circumstances pursuant to s 90K(1)(d) of the Act. In particular, the wife maintained that the deed establishing the K Superannuation Fund contemplated a superannuation split in the event of the parties' separation.[35] However, I am not persuaded by the wife's submission in this regard for the following reasons:a)Firstly, I concur with the husband's submission that the material change in circumstances must be one which relates to the care, welfare, and development of a child of the marriage.[36]
b)Secondly, although the Deed establishing the K Superannuation Fund included standard or generic clauses that enabled the trustee to comply with the relevant provisions of the Superannuation Laws, should a splitting payment be required to be made pursuant to the Act, neither the Deed nor the Agreement recorded any intention or agreement between the parties for a superannuation splitting payment to occur in the event of the parties' separation. Further, either the husband nor the wife maintained for the purposes of the trial that they formed any such intention or agreement.
[35] Wife's affidavit sworn [REDACTED] July 2022 at [205].
[36] Husband’s Outline of Closing Submissions at [12].
50In conclusion, I am not persuaded that the wife established to the requisite standard that there has been a material change in circumstances relating to the care, welfare, and development of a child.
Hardship
51Even if the wife had established a material change in circumstances pursuant to s 90K(1)(d) of the Act, (which I am not persuaded she has), I am also not persuaded that the wife established that she and the children will suffer hardship as a result of that change if the Agreement is not set aside. This is for the following reasons:
52 Firstly, I concur with the husband's submission that the fact that the wife may receive more under s 79 of the Act than she will under the Agreement does not constitute hardship. In Fewster & Drake (2016) FLC 93-745, the Full Court stated as follows:[37]
[37] Husband’s Outline of Closing Submissions at [22].
65.The husband correctly submits that the words "as a result of the change" indicate that the relevant hardship with which the section is concerned is the hardship caused by the change in circumstances. It is the changed circumstances which must give rise to the hardship, and not the agreement itself. It is to be recalled that, subject to compliance with the statutory requirements, people are free to enter into binding financial agreements as they see fit. There is no statutory provision which enables a binding financial agreement to be set aside merely because it is unfair: Hoult & Hoult (2013) FLC 93-546 at 87,283 and 87,296 – 87,298.
…
70.It is convenient to repeat the findings made by the primary judge in Pascot, which were adopted by the primary judge in this matter in relation to hardship:
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.
71.Those findings do not establish hardship as it is correctly understood.
53 Secondly, I considered that aspects of the wife's evidence, including in relation to the issue of hardship, were unreliable for the following reasons: Firstly, I considered that the wife tended to answer questions in a manner designed to advance her case, and she was not always prepared to make appropriate concessions against interest. For example, notwithstanding the wife's concessions under cross‑examination that pursuant to the Agreement, the value of her property entitlements was not less than $10,000,000 (and potentially significantly more),[38] the wife was not prepared to concede that she was quite a wealthy woman. Instead, she responded "I've got no comment"; and continued to maintain that she was living in hardship. Secondly, I concur with the husband's submission that the wife was not entirely candid about her financial position, as I now explain.
[38] If the wife was successful in her claim that she was entitled to receive payments from the Mr Fletcher Family Trust for the 2020 financial year totalling just over $6,950,000.
54I was not satisfied that since the wife filed her 2021 financial statement, the assets in her control have "reduced significantly, largely by reason of market forces but all by reason of her resort to capital in order to maintain herself since separation."[39] The wife conceded under cross‑examination that she had only provided very limited disclosure, including in relation to her bank and credit card statements. In my view, the wife provided very limited evidence regarding her financial circumstances since the filing of her 2021 financial statement. For example, the wife did depose that she sold her [Mineral Company O] shares and [Communications Company P] shares sometime after July 2021, to pay her legal fees and day-to-day living costs. However, when asked for how much she sold the Communications Company P shares, the wife responded: "no idea". Effectively, there was little, if any, evidence before the Court as to: (1) the share sale proceeds received by the wife, or how she dealt with them; (2) the sources of funds used by the wife to pay her legal fees – which she estimated to be approximately $600,000 at the time of the trial; and (3) how the wife had funded her day to day living costs.
[39] Wife’s Outline of Opening Submissions at [1] – [ 2].
55The wife did not file an updated financial statement but for the purposes of the trial, she did rely upon a schedule setting out her understanding of her financial position under the Agreement (Exhibit A4). In summary, Exhibit A4 set out the estimated values of the wife's assets, liabilities, and superannuation entitlements under the Agreement, inter alia, as of July 2021 and March 2024, as follows:
Asset
E value at 26.07.21
E value at 17.03.24
Property M – 50%
$2,850,000
$2,850,000
Share portfolio
$1,803,900
$1,049,400
[Wife's Bank Account]
$4,984
$335,857
[Wife's Bank Account term deposit]
-
$1,250,000
Motorboat
$1,900,000
$0
[Wife's Motor Vehicle 3]
$110,000
$82,300
Jewellery & watches
$250,000
$50,000
Payment March 2022
$850,000
-
Liabilities
E value at 26.07.21
E value at 17.03.24
Wife's Bank Card 1
-$2,590
-
Superannuation
E value at 26.07.21
E value at 17.03.24
The K Superannuation Fund
$1,811,921
$1,745,141
[Wife's Bank Superfund]
-
$59,699
Total
$6,728,215
$7,362,698
56As a starting point, it was evident that the wife did not include in Exhibit A4, the distributions allegedly due and payable to her from the Mr Fletcher Family Trust in the amount of approximately $6,900,000 (which she had included in her 2021 financial statement).
57Under cross-examination:
a)The wife conceded that "about two months ago" she was provided with draft statements for the K Superannuation Fund which quantified her member interests as of 30 June 2021 at $3,808,125.[40] (In this regard, I observe that there was no evidence to suggest that the wife took any steps to update the Court in relation to the value of her superannuation interests, for example, by filing an up-to-date statement of financial circumstances or making a correction to her Notice Disputing Facts.)[41] When asked if she perceived it to be to her advantage to adopt a number in Exhibit A4 that was $2,000,000 less than what the K Superannuation Fund accountant indicated, the wife answered "yes". However, the wife sought to justify her position, including on the basis that the 2021 statements were in draft only and had not been signed by her. This was notwithstanding the wife also conceded that the accountant had requested her to sign the documents so that they could be finalised but she had not done so; and that she had not attempted to contact the accountant in the previous two months with any queries she may have had about the draft statements, prior to signing them.
b)Leaving aside the issue of the 2021 draft statements, the wife conceded that: (1) the parties held their interests in the K Superannuation Fund in segregated accounts; (2) within her segregated account, she held cash totalling in excess of $2,500,000, together with approximately 270,000 shares in Mineral Company O, which were currently worth approximately $1,900,000; and (3) the wife checked the list prices of the Mineral Company O shares from time to time (albeit not regularly) to see how they were doing, including in 2024. Although the wife continued to deny that Exhibit A4 grossly underestimated the value of her superannuation interests in the K Superannuation Fund, I am satisfied that it was, in fact, a gross underestimation.
c)The wife conceded that she had not included her 50 per cent interest in Property L in Exhibit A4. The wife was reluctant to give any estimate of the current value of her half interest in the property.
d)The wife denied that after 2019, she collected the rental income directly from her sister for Property L without the husband's knowledge. The wife conceded that her sister would pay her rent, if asked, but she had not made any such request.
e)The wife conceded that even though she was aware that the $1,200,000 share portfolio was not generating any income by way of payment of dividends, for a considerable period she chose not to sell any of the shares so that she could reinvest the funds to generate some income.
f)The wife conceded that she sold the Motorboat in November 2023 for $1,700,000 or $1,750,000; and after payment of sales commission and/or other related costs, netted the sum of approximately $1,650,000. Although the wife maintained she did not sell the boat any earlier because the husband was still using it, she conceded that the husband's position has always been that she owned the boat.
g)The wife used part of the proceeds of sale of the boat[42] to extend her lease on her residence for a further two years, by paying lump sum rental in advance in the amount of $250,000.
[40] Exhibit R5.
[41] Although the Notice Disputing Facts was dated 24 January 2024, it was not sent to the husband’s solicitor until 6 February 2024. Refer to Exhibit A6.
[42] The proceeds of sale of the boat also provided the source of funds for the wife’s Term Deposit.
58I am satisfied that Exhibit A4 was inaccurate in that it failed to include as current assets: (1) the wife's 50 per cent interest in Property L and (2) the prepayment of the wife's rent. I am also satisfied that Exhibit A4 was inaccurate in that it grossly underestimated the current value of the wife's interests in the K Superannuation Fund.
59I concur with the husband's submission that even on her own case, the wife currently controls assets and superannuation entitlements in excess of $10,000,000 under the terms of the Agreement. Dependent upon the success of the wife's claim in relation to her alleged distributions from the Mr Fletcher Family Trust for the 2020 financial year, that amount may be as high as $16,000,000 to $17,000,000.
60Although the wife was not cross-examined about the issue, the Co‑ownership Agreement permitted the wife to reside in Property L for an agreed period of 18 months in the event of a relationship breakdown.[43] The wife did not take up residence of the property, as provided by the Co-Ownership Agreement, and instead, appears to have chosen to draw down on capital to pay rent. Aside from the prepayment of rent for her residence, there was no cogent evidence from which I could conclude that since July 2021, the wife has, in fact, been required to significantly draw down on capital to meet her day to day living costs.
[43] Co-Ownership Agreement: clause [5].
61Further, I am also satisfied that since July 2021, the wife has chosen not to maximise her income, for example, by selling non‑income producing assets registered in her name and re-investing the funds to generate an income. Such choices were entirely inconsistent with the wife's contention at trial that she and the children were experiencing hardship.
62In conclusion, I am not persuaded that the wife established that she and the children would suffer hardship if the Agreement was not set aside. As Foster J in Chaffin & Chaffin [2019] FamCA 260 at [30] observed:
30.It is trite to say that the obligation to adduce relevant evidence is on the party who carries the evidentiary onus. In this matter it is the wife that seeks to impugn the financial agreement by reason of factual circumstances that are much in dispute between the parties. The nature of the relief sought by the wife is expected to frame a consideration of the relevant evidence that supports her case…
Exercise of discretion
63Even if I was satisfied that since the making of the Agreement, a material change had occurred (being circumstances related to the care, welfare, and development of children of the marriage) and as a result, the wife and the children will suffer hardship if the Agreement was not set aside, (which I am not), I am also not persuaded that in the exercise of my discretion, the Agreement should be set aside. I concur with the husband's submissions that: (1) the wife received independent legal advice prior to signing the Agreement; (2) the wife and the husband discussed the Agreement for approximately three years prior to signing the Agreement (and in addition, approximately five years prior to their eventual marriage); (3) the parties expressly considered the possibility of having children in the future, including providing that the Agreement would be binding in such circumstances; and (4) under the terms of the Agreement, the wife will receive significant property from which to financially maintain herself and the children.[44]
APPLICATION TO SET ASIDE THE AGREEMENT PURSUANT TO SECTION 90K(1)(b)
[44] Husband’s Outline of Closing Submissions at [25].
64The wife sought that the Agreement be set aside pursuant to s 90K(1)(b) of the Act, on the basis that it was void, voidable or unenforceable by reason of uncertainty.
65Pursuant to s 90KA of the Act, the question whether a financial 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.
66The wife set out particulars of her claim in this regard at paragraphs 27.1 to 27.36 of her Amended Claim.
67In Upper Hunter County District Council v Australia Chilling and Freezing Co Ltd (1968) 118 CLR 429 at 436 – 437 (Upper Hunter) the High Court (per Barwick CJ) stated that the principles relevant to a contract being uncertain were as follows:
But a contract of which there can be more than one possible meaning or which when construed can produce in its application more than one result is not therefore void for uncertainty. As long as it is capable of meaning, it will ultimately bear that meaning which the courts, or in an appropriate case, an arbitrator, decides is it proper construction: and the court or arbitrator will decides its application. The question becomes one of construction, of ascertaining the intention of the parties, and of applying it. Lord Tomlinson's words in this connexion in Hillas & Co Ltd v Arcos Ltd ought to be kept in mind. So long as the language employed by the parties, to use Lord Wright's words in G Scammell & Nephew Ltd v Ouston is not "so obscure and so incapable of any definite or precise meaning that the Court is unable to attribute to the parties any particular contractual intention", the contract cannot be held to be void or uncertain or meaningless. In the search for that intention, no narrow or pedantic approach is warranted, particularly in the case of commercial arrangements.
68In Australian Goldfields NL (in liq) v North Australian Diamonds NL (2009) WAR 191f, the Western Australian Court of Appeal, after referring to the above passage in Upper Hunter at [142], then stated at [143] that:
143.In Hammond v Van Ltd [1972] 2 NSWLR 16, Sugerman P (Holmes & Mason JJA agreeing) noted that a court is always reluctant to decide that a contractual provision is void for uncertainty if a reasonable meaning can be ascribed to it. His Honour added that a court's duty is "to put a fair meaning upon it, unless this is utterly impossible (18) …
69I am not persuaded that the Agreement is void, voidable or unenforceable for uncertainty for the following reasons:
70 Firstly, the wife maintained that the definition of "separate property" in Recital AA is different from the definition of "separate property" in clause 12; and the inconsistency between the two was such that they "cannot be interpreted or reconciled with appropriate certainty to give effect to the parties' agreement."[45] I do not agree.
[45] Wife’s Amended Claim at [27.1] – [27.6].
71Recital AA of the Agreement is as follows:
AA."Separate property" is defined in this Agreement as any property, real or personal, tangible or intangible which is:
a) property set out in Schedule 1 and Schedule 2 of this Agreement;
b) acquired before the commencement of cohabitation or after separation;
c) acquired by gift or inheritance from a third party to one but not both of the parties;
d) acquired by gift or inheritance from a third party from a relative of one or both of the parties (and who is not a relative of the party merely as a result of any subsequent marriage of the party);
e) acquired in exchange for any separate property;
f) acquired as compensation for pain and suffering as a result of personal injury;
g) all income and other gains derived or to be derived from separate property of each party, whether by sale, exchange, investment, disposition or other dealing, or attributable to enhancement or appreciation of the property due in whole or in part to market conditions or to the services, skills or efforts of either party;
h) property excluded by written agreement of the parties;
i) the increase in value of all separate property whether the increase results from a combination of shared property, separate property or the personal efforts of a party or on a party's behalf or other appreciation of the value of the separate property.
72Clause 12 of the Agreement is as follows:
12.Both parties specifically reject the concept of unintentional creation of matrimonial property or unintentional change of separate property to matrimonial property. All property acquired by either party after the relationship shall be separate property unless the owner in writing either transfers the property to joint ownership or designates it as matrimonial property. All property acquired by either party after the relationship shall be presumed to be separate property unless clear contrary positive action is taken by the parties.
73On a plain reading of the two, I am not persuaded that there is any inconsistency between Recital AA and clause 12. If I am incorrect in this view, and there is an inconsistency, then I am comfortably satisfied that both have meaning and effect. In Re Media, Entertainment and Arts Alliance, Ex Parte Hoyts Corp Pty Ltd (1993) 178 CLR 379 at 386 - 387, the High Court discussed the conflict involving apparent inconsistent provisions in the one instrument and observed that such conflict "…is to be resolved, if at all possible, on the basis that one provision qualifies the other and, hence, that both have meaning and effect … That rule is an aspect of the general rule that an instrument must be read as a whole. On the approach that cl 29 and cl 31.1 should both have meaning and effect, the apparent conflict between them can be resolved by reading cl 31.1 down so that it is concerned only with conditions not regulated by the Interim Award …" Any apparent conflict is resolved on the basis that clause 12 qualifies the parties' position in relation to the concepts of unintentional creation of matrimonial property or unintentional change of separate property, including by providing that all property acquired by either party after the relationship shall be separate property unless the owner in writing either transfers the property to joint ownership or designates it as matrimonial property. As such, the definition of "separate property" in clause 12 is of narrower scope and should be "read down" accordingly.
74Although the wife also referred to the lack of any definition of "matrimonial property" at paragraph 27.4 in her Amended Claim, she did not maintain (either in her Amended Claim or during the trial itself) that the Agreement was void, voidable or unenforceable for uncertainty on this basis.
75 Secondly, the wife maintained that the definition of "separate property" did not include the K Superannuation Fund, either by reference to Schedule 1 or otherwise; and to the extent the husband maintained the Agreement rendered his entitlements in the K Superannuation Fund to be his separate property, the definitions in Recital AA and Clause 12 and the description in Schedule 1 are "so imprecise and/or ambiguous that the parties' intent cannot be discerned, with the effect that the terms of the Agreement are ineffective and cannot be enforced".[46] I do not agree.
[46] Wife’s Amended Claim at [27.7] – [27.11].
76I concur with the husband's submission that "questions about the construction of a contract, which include questions of whether it is sufficiently certain to be a contract, must be answered as at the moment when the contract is alleged to have been made."[47] In this case, at the time the Agreement was entered into between the parties,
the K Superannuation Fund had not yet been created; and it did not come into existence until approximately eight months later. Further, the wife conceded under cross-examination that the parties hold their interests in the K Superannuation Fund in segregated accounts. As such their respective interests in the K Superannuation Fund fall within the definition of "separate property" contained within Recital AA(h); as well as within the definition contained in Clause 12.[47] Heydon on Contract (1st ed, 2019) at [3.40].
77The wife pointed to the decision in Barre & Barre [2021] FamCA 101 (Barre) in support of her proposition that the degree of uncertainty of the Agreement, in the context of superannuation, needs to be assessed against the detailed provisions of Part VIIIB of the Act. However, I am not persuaded that the decision in Barre assists me in this case. In Barre, both parties sought to enforce their Binding Financial Agreement. In particular, the wife sought superannuation splitting orders in relation to the husband's interest in a self-managed superannuation fund which the parties created after entering into the agreement. The Court in Barre found that the agreement was not a "superannuation agreement" for the purposes of Part V111B. In this case, neither the husband nor the wife asserted that the Agreement constituted a superannuation agreement for the purposes of Part VIIIB.
78 Thirdly, the wife maintained that in the absence of any reference in the Agreement to the distinction between legal and equitable ownership, the intention of the parties in relation to the Mr Fletcher Family Trust cannot be discerned, and in particular the reference in item 5 in Schedule 1 to "cash and shareholdings in the [Mr Fletcher Family Trust]": (1) are ineffective and cannot be enforced; and (2) are so imprecise and/or ambiguous that the parties' intent cannot be discerned, with the effect that the terms of the Agreement are ineffective and cannot be enforced.[48] Further, in her written submissions, the wife maintained that the description of item 5 in Schedule 1 in its totality, being "cash and shareholdings in the name of the name of [Mr Fletcher], [Mr Fletcher Family Trust] and [Mr Fletcher Personal Superannuation Fund]" was, in the words of Lord Wright in the case of G Scammel & Nephew Ltd v Ouston,[49] "so obscure and incapable of any definite or precise meaning, that the court is unable to attribute to the parties any particular contractual intention."[50] I do not agree.
[48] Wife’s Amended Claim at [27.12] to [27.22].
[49] G Scammel & Nephew Ltd v Ouston [1941] AC 251 at 268. In Scammel, the Court found that an agreement that stipulated that part of the price was to be "on hire purchase terms" was so vague that no precise meaning could be attributed to it, and consequently there was no enforceable contract between the parties.
[50] Wife’s Papers for the Judicial Officer at [129].
79Although the wife gave evidence in her January 2023 affidavit regarding the extent of her understanding in 2007 about trusts in general, the Mr Fletcher Family Trust and the husband's superannuation entitlements, I am not persuaded that "legal technicalities" such as the differences between the husband's legal and equitable ownership of the trust assets or the differences between the concepts of "property", "assets", "financial resources" and "superannuation" ever arose or were contemplated by the parties in the lead up to the signing of the Agreement. Under cross-examination, the wife confirmed the accuracy of her affidavit evidence, given in July 2021, that she did not recall the exact circumstances surrounding the preparation and execution of the Agreement,[51] and she also confirmed that position remained true as of the date of the trial. Further, when it was put to the wife in cross-examination that she was not in a position to give reliable evidence about whether the Mr Fletcher Family Trust or the K Superannuation Fund was property or a financial resource, the wife simply responded: "I don't know".
[51] Wife’s affidavit filed [REDACTED] July 2021 at [17].
80I concur with the husband's submission that the description of part of item 5 in Schedule 1, being: "cash and shareholdings in the name of … [Mr Fletcher Family Trust]", made it clear that the parties' intention was that "cash and shares in the name of [Mr Fletcher Family Trust]" was to be treated as the separate property of the husband pursuant to the Agreement.[52] I am satisfied that was also the case for item 5, read in its entirety.
[52] Husband’s Outline of Closing Submissions at [42].
81 Fourthly, the wife maintained that to the extent that the husband asserted that the Agreement renders Property L to be his separate property, then "the definitions in Recital AA and clause 16 and the description in Schedule 1 are so imprecise and/or ambiguous that the parties' intent cannot be discerned, with the effect that the terms of the Agreement are ineffective and cannot be enforced."[53] In particular, the wife maintained that the Agreement could not be applied to the acquisition of Property L in the context of the Co-Ownership Agreement with requisite certainty; and in any event the Co-Ownership Agreement contained inherent uncertainty by virtue of a lack of appreciation of basic principles of trust law.[54] I do not agree.
[53] Wife’s Amended Claim at [27.23] – [27.36].
[54] Wife’s Papers for the Judicial Officer at 135 – 137.
82I have set out the terms of Recital AA and Schedule 1 earlier in these Reasons. Clause 16 of the Agreement is set out later in these Reasons.
83I again concur with the husband's submission that "questions about the construction of a contract, which include questions of whether it is sufficiently certain to be a contract, must be answered as at the moment when the contract is alleged to have been made."[55] In this case, the parties purchased Property L approximately three years after they signed the Agreement. At around the same time, they entered into the Co-Ownership Agreement, which, inter alia, made plain the parties' intention that the property was not the separate property of the husband, but rather, was owned by them jointly and held in the Mr Fletcher Family Trust. Their actions in this regard were entirely consistent with clause 12 of the Agreement.
[55] Heydon on Contract (1st ed, 2019) at [3.40].
84In any event, at the trial, the husband conceded that Property L was not his separate property. In particular: (1) during the trial, Senior Counsel for the husband stated that the husband's position was that the Mr Fletcher Family Trust holds Property L as bare trustee for the husband and the wife; and (2) in his written Outline of Closing Submissions, the husband stated that each party has a 50 per cent interest in Property L.[56]
[56] Husband’s Outline of Closing Submissions at [45].
85 Fifthly, the wife maintained that the Agreement was too uncertain in its terms to constitute a valid contract. In particular, the wife relied on "the reference to "the previous clause" in clause 21 of the Agreement, on the basis that the subject matter of clause 20 cannot sensibly apply to the subject matter of clause 21. I do not agree that the Agreement is too uncertain to constitute a valid contract on this basis.
86Clauses 15 to 21 inclusive of the Agreement were as follows:
15.If the parties acquire property after the date of this Agreement and place it in both their names or enter into any written agreement, or execute any legal documents to transfer the title to any separate property in both parties' names, that property shall be shared property.
16.Any written or oral reference by the parties to property as "joint" or "ours" does not create a presumption of joint ownership in property which is otherwise separate. There must be formal documentation to prove the transfer of separate property to joint ownership.
17.If the parties acquire property jointly during the marriage, the property shall be held by them as provided in the document conveying title or evidencing title. If the document does not specify otherwise or if there is no document, the property shall be held as tenants in common in proportion to their direct financial contributions to the acquisition, conservation or improvement thereof and any losses shall be borne in like proportion. The arrangement shall not in any way be deemed a waiver or abandonment of the whole or any part of this Agreement.
18.[The husband] and [the wife] agree and acknowledge that each shall be solely responsible to meet any and all ongoing maintenance, costs, including mortgage payments, rates and taxes in respect of any separate property without recourse to the other party.
19.If either party meets any or all maintenance costs in respect of the other's separate property of whatsoever nature, then [the husband] and [the wife] agree and acknowledge that such contribution or contributions will not create any legal or beneficial entitlement in such asset or assets in the absence of express written agreement to that effect.
20.While the parties live together as defacto husband and wife they shall both contribute (equally) to joint expenses and ordinary living expenses, but if from time to time [the husband] and [the wife] pay any expenses which were payable by the other party under this Agreement, then they are not entitled to seek reimbursement from the other party and such payments do not give rise to any enforceable debt.
21.[The husband] and [the wife] agree and acknowledge that if they acquire any shared property then they shall contribute to the maintenance and any expenses of such property in accordance with the proportions held by them pursuant to the previous clause. The contribution by either party to a greater share than that which their legal entitlement would otherwise oblige them to meet shall not, in the absence of express written agreement to that effect, create any legal and/or beneficial entitlement by one party to and in respect of the interest of the other party in such property.
87In Fitzgerald v Masters (1956) 95 CLR 420 at 426-427, the High Court (per Dixon CJ and Fullagar J) said:
There is a superficial difficulty in cl.8, because it purports to incorporate a set of conditions so far as they are inconsistent with what has been specifically agreed upon. No real difficulty, however, is created. Words may generally be supplied, omitted, or corrected, in an instrument, where it is clearly necessary in order to avoid absurdity or inconsistency. Here it would indeed be absurd to suppose that the parties, having expressed their agreement on a number of special and essential matters, should intend to incorporate by reference terms inconsistent with what they had specially agreed upon. What they must clearly have intended is to incorporate a set of general conditions except so far as they were inconsistent with what they had specially agreed upon, and cl.8 must be read as if it said "consistent" or "not inconsistent".
88The majority in Fitzgerald v Masters (per McTiernan J, Webb J and Taylor J) at 438, essentially reached the same conclusion, finding that "the only way in which the provisions of that clause can be reconciled with the intention of the parties as disclosed by the agreement is to supply the word "not" before the word "inconsistent".
89In this case, clause 21 set out the parties' agreement in relation their contributions to the maintenance and expenses relating to any shared property acquired by them. The reference in clause 21 to "such property in accordance with the proportions held by them pursuant to the previous clause" was absurd, given clause 20 dealt with the parties' contributions to their joint expenses and ordinary living expenses. I concur with the husband's submission that the reference in clause 21 to "pursuant to the previous clause" was a drafting error; and should instead have referred to clause 17, which was the clause dealing with the parties' joint acquisition of property. In my view, the proper cause of action to resolve the seeming inconsistency between clauses 20 and 21 is to simply omit the phrase "pursuant to the previous clause" in clause 21.
APPLICATION TO SET ASIDE THE AGREEMENT ON THE BASIS OF CONTRACTUAL MISTAKE
90 The wife maintained that the parties entered into the Agreement on the basis of a common or mutual mistake as to the nature and value of their rights in respect of the assets of the Mr Fletcher Family Trust and the Mr Fletcher Personal Superannuation Fund, and as such, was void, voidable or unenforceable within the meaning of s 90K(1)(b) of the Act. The wife set out particulars of her claim in this regard at paragraphs 30 to 33 of her Amended Claim.
91In WestporkPty Ltd v Bio-Organics Pty Ltd [2018] WASC 291 at [117] – [118], Martin J discussed the principles relevant to common mistake under contract law (sometimes also called mutual mistake) as follows:
117.…the scenario of a common (or mutual) mistake affecting both parties to a bilateral contract raises wholly different conceptual considerations and evaluations than that of a unilateral mistake. For such different circumstances I am persuaded that the High Court has not yet spoken definitively to endorse all of Solle v Butcher, or at least it has not spoken yet in terms that are inconsistent with the evaluation as was undertaken by Atkinson J in the Court of Appeal of Queensland in her applying the fivefold criteria from Great Peace Shipping. That was also the test deployed by Master Newnes (as he then was) at [52] of his Honour's reasons in Errichetti Nominees. I will be guided by and follow that approach. I refer in particular to principle (iv) of the Great Peace Shipping taxonomy. The five elements were explained in these terms by Master Newnes:
But recently in Great Peace Shipping Ltd v Tsavliris Salvage (International) Ltd [2003] QB 679, after extensive review of the authorities, the Court of Appeal overruled Solle v Butcher (supra) and the English decisions which had followed it. The Court of Appeal held (at 703) that a contract will be void at common law by reason of common mistake if the following elements are present:
i. there must be a common assumption as to the existence of a state of affairs;
ii. there must be no warranty by either party that that state of affairs exists;
iii. the non-existence of the state of affairs must not be attributable to the fault of either party;
iv. the non-existence of the state of affairs must render the performance of the contract impossible;
v.the state of affairs may be the existence, or a vital attribute, of the consideration to be provided or circumstances which must subsist if performance of the contractual adventure is to be possible.
118.But at [66] and [68] Master Newnes had also concluded alternatively that, even applying the wider scope of the Solle v Butcher common mistake test, (see [66]):
…[T]he mistake alleged in the present case is a long way indeed from a fundamental mistake of the kind required to render the contract voidable in equity for common mistake. It is not a mistake as to the nature or essential terms of the contract, or as to the existence of the subject matter of the contract, but simply as to the value of the subject matter …
92In short, the wife maintained that at the time they signed the Agreement: (1) both parties were under the misapprehension that "cash and shareholdings in the name of Mr Fletcher, Mr Fletcher Family Trust and Mr Fletcher Personal Superannuation Fund (as set out in item 5 of Schedule 1) was an asset of the husband rather than a financial resource of them both; (2) the wife mistakenly believed she had no rights in respect of the Mr Fletcher Family Trust; and (3) the husband mistakenly believed that he owned the assets of the said trust. However, I am not persuaded this was the case, for the following reasons:
93 Firstly, as I have already set out earlier in these reasons, the Agreement provided that the husband's separate assets, financial resources and liabilities were as set out in Schedule 1; and the wife's were as set out in Schedule 2;[57] and both parties confirmed that their relevant schedule fully and accurately disclosed the identity, nature and estimated value of their respective assets, financial resources, and liabilities as at the date of the Agreement.[58] In my view, the fact that the heading of the first table in Schedule 1 referred only to "Assets" and not "Assets and Financial Resources", or that husband's interests in the trust and the superannuation fund were included in the first table, is of little moment. I am not persuaded that it was a mistake to include the trust and the superannuation fund as "Assets" in the first table in Schedule 1.
[57] Agreement: Recitals U and W.
[58] Agreement: Recitals V and X.
94 Secondly, I am not satisfied this is a case where the parties entered the Agreement under a positive belief which was incorrect.[59] As I have already set out earlier in these Reasons, I am not persuaded that "legal technicalities" such as the differences between the husband's legal and equitable ownership of the trust assets or the differences between the concepts of "property", "assets", "financial resources" and "superannuation" ever arose or were contemplated by the parties in the lead up to the signing of the Agreement. I concur with the husband's submission that the fact that the wife simply did not turn her mind to this issue was reinforced by the fact that she had no recollection of receiving legal advice on whether the trust and superannuation fund were properly characterised as "financial resources" or "assets".[60]
[59] Chitty on Contract (35th ed, 2023) at [9-004].
[60] Husband’s Outline of Closing Submissions at [71].
95 Thirdly, even if a mistake was established, as alleged by the wife, (which I am not persuaded), I am also not persuaded that it was a fundamental mistake of the kind required to render the contract voidable in equity for common mistake, [61] as was the case in two decisions referred to by the wife: Grist v Bailey and Phak & Xu.[62] I concur with the husband's submission that there was no evidence that the wife would not have entered into the Agreement, had she turned her mind to the "legal technicalities".[63]
SPOUSAL MAINTENANCE PROVISIONS
[61] Westpork Pty Ltd v Bio-Organics Pty Ltd [2018] WASC 291 at [118]. See also Chitty on Contract (35th ed, 2023) at [9-015]; [9-050].
[62] Grist v Bailey [1967] Ch 532 and Phak & Xu [2015] FamCA 939: refer to the wife’s Papers for the Judicial Officer at [143] – [145].
[63] Husband’s Outline of Closing Submissions at [79].
96The wife sought that clause 23, 26 and 28 (and part of clause 6) be set aside or excised from the Agreement on the basis that they were void for non-compliance with s90E of the Act and/or s90F of the Act. The wife set out particulars of her claim in this regard at paragraph 28 of her Amended Claim.
97As I have set out earlier in these Reasons, during closing submissions, the husband conceded that clause 23 was invalid for seeking to contract out of the provisions of the Family Provision Act 1972 (WA).
98Sections 90E and 90F are as follows:
90E. A provision a financial agreement that relates to the maintenance of a spouse party to the agreement or a child or children is void unless the provision specifies:
(a)the party, or the child or children, for whose maintenance provision is made; and
(b)the amount provided for, or the value of the portion of the relevant property attributable to, the maintenance of the party, or of the child or each child, as the case may be.
90F(1)No provision of a financial agreement excludes or limits the power of a court to make an order in relation to the maintenance of a party to a marriage if subsection (1A) applies.
90F(1A)This subsection applies if the court is satisfied that, when the agreement came into effect, the circumstances of the party were such that, taking into account the terms and effect of the agreement, the party was unable to support himself or herself adequately without an income tested pension, allowance or benefit.
90F(2)To avoid doubt, a provision in an agreement made as mentioned in subsection 90B(1), 90C(1) or 90D(1) that provides for property or financial resources owned by a spouse party to the agreement to continue in the ownership of that party is taken, for the purposes of that section, to be a provision with respect to how the property or financial resources are to be dealt with.
99The relevant clauses of the Agreement were as follows:
6.Notwithstanding the subsequent provisions of this Agreement, following the breakdown of the relationship of the parties, [the husband] shall pay [the wife]:
(a)the sum of AUD$150,000.00 if the parties separate within 12 months of the date of this Agreement; and
(b)that sum together with an additional $50,000.00 for each subsequent year of the relationship after the first 12 months following the date oof this Agreement.
with any payment due under subparagraph (a) or (b) to be made by [the husband] within 30 days of receipt by [the husband] of a written request by [the wife] after separation (as defined in clause 5) to a bank account nominated by [the wife]. Both parties specifically recognise that they shall have no right to receive additional payments of maintenance if they separate, apart from child support or child maintenance for any child of the relationship.
…
26.Except as otherwise provided in this Agreement, both parties forever waive and release to the other all spousal maintenance, property and testamentary rights and claims they may have otherwise had upon marriage or arising out of any defacto relationship under the present or future law in this or any other state or country, to or in or against the current or future property, income or estate of the other.
…
28.The parties also acknowledge they are self-sufficient and capable of supporting themselves if they separate. If they separate, neither shall be required to pay spousal maintenance to the other.
100I am satisfied that the wife's application that clause 26 and 28 (and part of clause 6) be set aside or excised from the Agreement on the basis that they were void for non-compliance with s 90E of the Act and/or s 90F of the Act also fails for the following reasons:
101 Firstly, I am satisfied that the Agreement does comply with the requirements of s 90E of the Act. On its face, clause 6 specifies the payment to be made by the husband to the wife on separation (by reference to a formula) and both parties then specifically acknowledge that they shall have no right to receive additional payments of maintenance if they separate, apart from child support or child maintenance.
102 Secondly, I am not satisfied that, when the Agreement came into effect, the circumstances of the wife were such that, taking into account the terms and effect of the Agreement, she was unable to support herself adequately without an income tested pension, allowance, or benefit. Notwithstanding that the wife commenced receiving Family Tax Benefits in or about August 2021, presumably on the basis of her assertion to Centrelink that she met the income means test, I am satisfied that at the relevant time: (1) on her own case, the wife controlled assets worth millions of dollars under the terms of the Agreement; and (2) the wife chose not to maximize her income, for example, by selling non-income producing assets registered in her name and re-investing the funds to generate an income.
ORDERS
103I am satisfied that save and except for clause 23 of the Agreement (which the husband conceded was invalid) the Agreement should be declared binding. As such, I am also satisfied that s 71A of the Act operates to preclude the wife from pursuing a financial claim against the husband under Part VIII of the Act. As such, I am satisfied that it is also appropriate to dismiss the wife's Form 1 application filed on [REDACTED] July 2021, insofar as it seeks financial orders.
104Subject to hearing from the parties as to the format of the proposed orders, I intend to make the following orders:
1. Save and except for clause 23, the financial agreement executed by the parties on [REDACTED] November 2007 be declared binding.
2. The following paragraphs of the final orders sought by the wife in her Form 1 application filed on [REDACTED] July 2021 be dismissed:
a)Paragraphs 1 to 13 inclusive; and
b)Paragraphs 19 to 24 inclusive.
3. In relation to material tendered as an exhibit into evidence in these proceedings:
a)All parties must collect the exhibits tendered by them ("their exhibits"), from the Chambers of the Honourable Chief Judge Sutherland, at least 28 days, and no later than 42 days, from today's date.
b)All parties must contact the Chambers of Honourable Chief Judge Sutherland to arrange the collection of their exhibits.
c)In default of compliance with subparagraph (a), all material tendered as an exhibit, save and except for material produced pursuant to subpoena, will be destroyed by the court without notice to the parties.
4. In the event of an appeal being lodged prior to the expiration period of 42 days, the preceding paragraph does not apply.
ANNEXURE A
ANNEXURE B
I certify that the preceding paragraph(s) comprise the reasons for decision of the Family Court of Western Australia.
KV
Associate
6 JUNE 2024
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