Frederick v Frederick - [2019] FamCAFC 87

FAMILY COURT OF AUSTRALIA

FREDERICK & FREDERICK

[2019] FamCAFC 87

FAMILY LAW – APPEAL – EVIDENCE – Whether the primary judge erred by giving no weight to the husband’s evidence about the current values of certain assets identified in the parties’ binding financial agreement – Where the evidence was relevant and admissible – Whether the primary judge should have accepted the husband’s evidence despite the fact that evidence capable of being given greater weight could have been called – Error demonstrated.

FAMILY LAW – APPEAL – PROPERTY – Binding financial agreement – Whether the primary judge erred in his assessment of hardship pursuant to s 90K(1)(d) of the Family Law Act 1975 (Cth) – Where there were changed circumstances relating to the care of a child – Where the assessment required a comparison between the position of the child and the person with caring responsibility for her if the agreement is set aside with the position if the agreement remains in place – Where that preliminary assessment required the primary judge to give some weight to the husband’s evidence about the current values of certain assets – Error demonstrated – Appeal allowed – Orders of the primary judge set aside.

FAMILY LAW – APPEAL – PROPERTY – Binding financial agreement – Hardship – Caring responsibility for child – Whether the primary judge erroneously took into account the fact that the wife had not sought a child support assessment and the possibility of the wife seeking spousal maintenance – Whether the primary judge erroneously took into account the “relative care responsibilities” of the parties – Error demonstrated – Where there is merit in the appeal – Appeal allowed.

FAMILY LAW – APPEAL – PROPERTY – Binding financial agreement – Construction – Whether the parties were bound by the values ascribed to certain assets in a schedule to the binding financial agreement or whether the wife had the onus of adducing evidence of the value of the assets at the time the agreement was signed – Where this argument was not raised at trial – Where an objective construction of the schedule suggests that the parties intended to be bound by the values set out in it – Estoppel by convention.

Evidence Act 1995 (Cth) ss 55, 56, 79, 81
Family Law Act 1975 (Cth) ss 44(3), 75(2), 79, 90G, 90K(1)(d)
Family Law Rules 2004 (Cth) r 22.08A

Clauson and Clauson (1995) FLC 92-595; [1995] FamCA 10
Con-Stan Industries of Australia Pty Ltd v Norwich Winterthur Insurance (Australia) Ltd (1986) 160 CLR 226; [1986] HCA 14
Edmunds & Edmunds (2018) FLC 93-847; [2018] FamCAFC 121
Fewster & Drake (2016) FLC 93-745; [2016] FamCAFC 214
Grundt v Great Boulder Pty Gold Mines Ltd (1937) 59 CLR 641; [1937] HCA 58
IMM v The Queen (2016) 257 CLR 300; [2016] HCA 14
Kimberly-Clark Australia Pty Ltd v Arico Trading International Pty Ltd (2001) 207 CLR 1; [2001] HCA 8
Kuru v New South Wales (2008) 236 CLR 1; [2008] HCA 26
Metwally v University of Wollongong (1985) 60 ALR 68; [1985] HCA 28
Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 256 CLR 104; [2015] HCA 37
Sharp v Sharp (2011) 50 Fam LR 567; [2011] FamCAFC 150
Water Board v Moustakas (1988) 180 CLR 491; [1988] HCA 12
White v Overland [2001] FCA 1333

APPELLANT:

Ms Frederick

RESPONDENT:

Mr Frederick

FILE NUMBER:

WOC

2017

APPEAL NUMBER:

103

2018

DATE DELIVERED:

28 May 2019

PLACE DELIVERED:

Sydney

PLACE HEARD:

Sydney

JUDGMENT OF:

Strickland, Aldridge & Austin JJ

HEARING DATE:

8 March 2019

LOWER COURT JURISDICTION:

Federal Circuit Court of Australia

LOWER COURT JUDGMENT DATE:

28 June 2018

LOWER COURT MNC:

[2018] FCCA 1694

REPRESENTATION

COUNSEL FOR THE APPELLANT:

Mr Coleman SC with Ms Clarke

SOLICITOR FOR THE APPELLANT:

J S Pinto & Co

COUNSEL FOR THE RESPONDENT:

Mr Othen

SOLICITOR FOR THE RESPONDENT:

H A Miedzinski Solicitors

Orders

The appeal be allowed and the orders made on 28 June 2018 be set aside.
Pursuant to s 90K(1)(d) of the Family Law Act1975 (Cth) the Financial Agreement entered into between the parties dated 5 February 2007 be set aside.
Any party seeking a costs order is to file and serve written submissions as to costs within 14 days of the date of these orders, with the other party to file and serve written submissions in response within a further 14 days, and any written submission in reply to be filed and served within a further 14 days.

Note: The form of the order is subject to the entry of the order in the Court’s records.

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

Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).

THE FULL COURT OF THE FAMILY COURT OF AUSTRALIA AT SYDNEY

Appeal Number: EA 103 of 2018
File Number: WOC 24 of 2017

Ms Frederick

Appellant

And

Mr Frederick

Respondent

REASONS FOR JUDGMENT

Introduction

Ms Frederick (“the wife”) and Mr Frederick (“the husband”) entered into a Binding Financial Agreement (“the Agreement”) on 5 February 2007.
On 11 January 2017, the husband filed an Initiating Application seeking a declaration that the Agreement was valid and binding. Before his Honour, the wife sought to have the Agreement set aside on the grounds that it did not comply with the requirements of s 90G of the Family Law Act 1975 (Cth) (“the Act”), or that changed circumstances had arisen since the signing of the Agreement within the scope of s 90K(1)(d) of the Act or because her entry into the Agreement was obtained by the undue influence and unconscionable conduct of the husband.
On 28 June 2018 a judge of the Federal Circuit Court of Australia made the declaration sought by the husband, having rejected each of the contentions raised by the wife. Thus, the parties remained bound by the Agreement.
The wife now appeals from this order. Her appeal concerns only her claim to have the Agreement set aside under s 90K(1)(d) of the Act on the basis that the disability suffered by one of the parties’ children constituted changed circumstances which led to hardship.
The section relevantly provides:
90KCircumstances 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:
…
(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
…

Background

The parties’ first child, X, was born in 2005. The parties married in 2007. A second child, Y, was born in 2007.
On 2 March 2009, X was diagnosed with atypical autism, mild functional/adaptive impairment and, subsequently, with pica. These diagnoses have led to a number of challenging and unsafe behaviours which require a high level of care. For example, on 13 September 2012, it was recorded that she was still not toilet trained and was non-verbal.
The primary judge found that the emergence and diagnosis of X’s difficulties were material changes of circumstances since the signing of the Agreement, relating to the care, welfare and development of the child.
His Honour also found that the wife was a person who had caring responsibility for X, as did the husband.
His Honour further found that “the identified changes have caused and will continue to cause hardship to both parties, by reason of much more onerous care responsibilities and increased costs” (at [135]).
However, the primary judge was not satisfied that, having regard to the terms of the Agreement and the evidence in the proceedings, the wife will suffer hardship if the Court does not set the Agreement aside.
It is therefore necessary to turn first to the Agreement and then to the evidence that bore on the issue of hardship.
The first draft of the Agreement was typewritten. The solicitor for the wife made some handwritten alterations which were later adopted by the husband.
Clause 3 of the Agreement provided (with the emphasised words being the handwritten additions):
3. [The wife] agrees that she has made no contribution of a financial nature to the acquisition, conservation or improvement of the assets of [the husband] and that she is not entitled to any benefit from any of the assets or financial resources set out in Sch 1 other than any increase in asset / or the matrimonial home or replacement asset or assets purchased from the sale or refinance of that property, which is attached to this agreement. She also agrees that she has no entitlement to any gifts or inheritances which are received from time to time by [the husband] and that she will make no claim at law or in equity in relation to such gifts or inheritances.
Thus, any claim by the wife to the assets listed in Schedule 1 (“the Schedule”) is limited to any increase in value of that asset or its replacement.
Pursuant to Clause 5 of the Agreement, the wife was not entitled to make any claim to any further property that might be acquired by the husband during the relationship or after the marriage “in his sole name with money accumulated from his sole earnings or other income”.
The Schedule listed four items of property. Two items were of relatively small value and no longer existed at the time of the hearing. The Schedule referred to the other property in the following terms:
1.[Property A] - $2,200,000.00 (unencumbered)
…
4.2 of 2 shares in [Business A] which corporate entity owns the following properties:-
(a) [Property B NSW] - $1,700,000.00 mortgaged to Westpac Bank Limited - $159,846.00;
(b) [Property C NSW] - $500,000.00 mortgaged to Commonwealth Bank Limited - $102,745.00
The major assets referred to in the Schedule thus comprised Property A and a company in the husband’s name which owned a further two real properties.
The only sensible interpretation of the figures referred to in the Schedule is that they represent the value of each of the properties and the amount owing on each property at the time of the execution of the Agreement. This is because the Agreement deals with the fate of the property, in particular the property of the husband, in the case of separation. In light of Clause 3 of the Agreement, it is hardly surprising that an indication of the value of that property should be given. The figures set a benchmark against which future changes in value may be measured. There is no other rational explanation for the presence of the figures.
The only other asset of the husband’s at the time of the hearing was a significant sum held in a bank account. It had been received from the estate of his late father after resolution of family provision proceedings he commenced against the estate in June 2015.
This sum did not figure significantly at the hearing because, we infer, the parties accepted that it was either an inheritance within Clause 3 of the Agreement or after-acquired property within the meaning of Clause 5.
The focus of the limited evidence at the hearing was on whether there had been any increase in the value of the properties listed in the Schedule, as set out earlier.
The only evidence as to the value of the three real properties and, hence, in the case of the property holding company, the shares, was given by the husband. The primary judge described that evidence as “little better than conjecture” (at [144]) and observed that “there was no evidence of the current value of any of these assets” (at [143]).
The primary judge correctly accepted that in applying s 90K(1)(d) of the Act, the Court must determine hardship by undertaking “some comparison between the position of the child, or the person with caring responsibility, if the agreement remains in place and the position of that child or person if the agreement is set aside” (Fewster & Drake (2016) FLC 93-745 (“Fewster”) at [67]).
His Honour concluded that as the wife’s claim under the Agreement was limited to any increase in value of the assets, the lack of evidence as to their current value resulted in the Court being “unable to undertake any meaningful comparison between the different positions, if the financial agreement was, or was not, set aside” (at [144]).
Thus, the wife’s claim failed.

The Appeal

The Notice of Appeal raised 10 grounds of appeal. Senior counsel for the wife did not address oral submissions to all of them but continued to rely on the Summary of Argument filed 10 December 2018.
Grounds 2, 4, 5 and 6 were argued together and were described as the primary focus of the appeal. Ground 7 was addressed but was only said to be necessary if the primary challenge failed.

Did the primary judge err by not giving any weight to the husband’s evidence about the current values of the assets? (Grounds 2, 4, 5 and 6)

Although differently stated, each of Grounds 2, 4, 5 and 6 assert that the primary judge erred by failing to give weight to the husband’s evidence of the current values of the assets listed in the Schedule.
It is useful to commence by recording that the values ascribed to the assets in the Schedule were given by the husband who did not have a valuation conducted.
The husband’s evidence as to the current value of the assets referred to in the Schedule came from two sources: his Financial Statement filed 11 January 2017 and his oral evidence.
In the Financial Statement he ascribed a value of $2,200,000 to Property A – that is, the same value as that recorded in the Schedule.
In cross-examination, the husband affirmed that he had recorded a value of $2,200,000 for Property A property in his Financial Statement. He later said that he could give a rough current value of “[$]2.2 to [$]2.3 [million]” (Transcript 30 November 2017, p.46 line 45).
In re-examination, the husband was asked about an affidavit he swore on 19 October 2017 in proceedings in the Supreme Court of New South Wales brought by him seeking provision out of his father’s estate.
He said:
[COUNSEL FOR THE HUSBAND]: You can see the first entry there is [Property A]?
[THE HUSBAND:] Yes.
[COUNSEL FOR THE HUSBAND]: And that you put a value there of $1.8 million?
[THE HUSBAND]: Yes.
[COUNSEL FOR THE HUSBAND]: You were asked some questions about your financial statement as to what you thought [Property A] was worth around – during these proceedings?
[THE HUSBAND]: Yes.
[COUNSEL FOR THE HUSBAND]: And you said about [$]2.2 to [$]2.3 million. All right. Would you say the value of [Property A] has gone up or down between when you provided that affidavit, and now?
[THE HUSBAND]: Well, it has gone up.
[COUNSEL FOR THE HUSBAND]: All right. And you have been asked questions about the financial agreement and the schedule to it. Would you say that the value of [Property A] has gone up or down between 2007 and 2014?
[THE HUSBAND]: It has gone up slightly.
(Transcript 30 November 2017, p.65 line 36 to p.66 line 3)
As to the company in his name, the husband confirmed that it merely held property (Transcript 30 November 2017, p.46 lines 19–20). Later, the husband confirmed that in his Financial Statement he had valued his interest in the company at “roughly [$]1.8 [million]” (Transcript 30 November 2017, p.48 line 27).
The primary judge dealt with this evidence in the following passage:
142.There was no valuation evidence or other evidence of value of any assets as at the date of the hearing, apart from some estimates of the value of [Property A] given by the husband, as already pointed out. These estimates ranged from $2,200,000 to $2,300,000 over the period between 2007 and 2017. There was evidence that in 2014, for the purposes of proceedings under the Succession Act, 2006 (NSW) in the NSW Supreme Court, the husband valued [Property A] at $1,800,000. On that basis [Property A] fell then rose in value over a decade. As noted $2,200,000 was the value given for [Property A] in the financial agreement. The husband attributed the same value to the property in his Financial Statement filed 11 January 2017. In cross examination, the husband estimated $2,300,000 as the value. Thus if this evidence were to be accepted, it would also entail accepting that the value of [Property A] had either not changed in over a decade, or had risen by $100,000 only. The wife relied on this evidence to submit that she could expect to share at most in a capital gain of $100,000.
143.In the Schedule to the financial agreement, values were given for a bank account and motor cruiser. The husband gave evidence he no longer held the bank account. There was also a value given for shares owned by the husband in a company called [Business A]. This company held real estate, so the value of the shares would most likely be derived on the basis of the assets owned by the company. In Schedule 1 it is specified that the company owned two properties with a total net value of $1,937,409. In his financial statement filed 11 January 2017, the husband estimated the value of these shares to be $1,809,457 which was less than the value in the schedule. But, as already noted, there was no evidence of the current value of any of these assets. It is not possible to form a view about whether their value has increased or not since the date of execution of the financial agreement.
144.The wife bears the onus of establishing that, she or [X] would suffer hardship if the financial agreement was not set aside. It will be obvious that the husband’s evidence of value of [Property A], such as it is, could be seen as supportive of the wife’s argument of hardship if the financial agreement is not set aside. The wife submitted that I should accept the husband’s evidence of value. I do not accept this submission. Such evidence seems to be little better than conjecture. Even if treated as an opinion, no basis for it was given. The problem is that there is no evidentiary basis upon which to form a view about the possible movement, or stability, in the value of any assets, including [Property A]. The wife adduced no evidence herself of the value of any assets, despite bearing the onus. As the husband also submitted, the claim based on s.90K(1)(d) was raised only shortly before the hearing. This was well after the time for filing of evidence had passed. Consequently, the court is unable to undertake any meaningful comparison between the different positions, if the financial agreement was, or was not, set side.
The oral evidence of the husband in cross-examination, which was the subject of objection, was properly admitted. It was relevant and admissible within the meaning of s 55 and s 56 of the Evidence Act 1995 (Cth) (“the Evidence Act”) because it had the capability to “rationally affect … the assessment of the probability of the existence of a fact in issue” and was not “so inherently incredible, fanciful or preposterous that it could not be accepted by a rational jury” (IMM v The Queen (2016) 257 CLR 300 at [39] per French CJ, Kiefel, Bell and Keane JJ). Of course, such evidence was then subject to the provisions of Parts 3.2 to 3.10 of the Evidence Act which might render it inadmissible. Whilst Part 3.3 excludes lay opinions, that restriction does not apply to admissions (s 81 of the Evidence Act).
We consider that, generally speaking, a person can give some evidence by way of admission as to the value of real estate owned by them which can be accorded weight, notwithstanding such weight might be very much less than the weight given to that of a professional valuer, for example. The ordinary common experience of people is that where they own only a few significant assets such as cars and houses, they are well aware of the purchase price and have some knowledge, obtained from a variety of sources, about their value.

The primary judge did not accord the husband’s evidence as to current value any weight because he regarded it as no more than conjecture. Thus, he accorded it no weight at all. The primary judge did not say that the evidence was not given weight because it was not expert evidence as permitted by s 79 of the Evidence Act. His Honour said “[e]ven if treated as an opinion, no basis for it was given” (at [144]).
As would be apparent from what we have said, the husband’s evidence as to current values was more than conjecture. It had been properly admitted and was entitled to some weight, all the more so in the absence of any other evidence.
It must be remembered that the primary judge was not hearing a final property case but an application to set aside a binding financial agreement which involved “some comparison between the position of the child, or the person with caring responsibility, if the agreement remains in place and the position of that child or person if the agreement is set aside” (Fewster at [67]) (emphasis added). That does not require the applicant for such an order to call all the evidence that would be called on a final property hearing such as formal valuations.
The position is, in our view, somewhat analogous to an application for leave to commence property proceedings out of time under s 44(3) of the Act. That section requires the consideration of a prima facie case or a case with “a ‘real’ probability of success” (Sharp v Sharp (2011) 50 Fam LR 567 at [18]).
In Edmunds & Edmunds (2018) FLC 93-847 the Full Court said:
16.The hearing of applications for leave pursuant to s 44(3) should be “summary in character” (Neocleous & Neocleous (1993) FLC 92-377 at 79,914) and not a final hearing of the matter (Whitford and Whitford (1979) FLC 90-612 at 78,143; Hedley & Hedley (2009) FLC 93-413 at [32] per Finn J and at [111] per Boland J). A detailed hearing of the case on its merits is not required (Althaus and Althaus (1982) FLC 91-233 at 77,267).
17.In Wood v Glaxo Australia Pty Ltd [1994] 2 Qd R 431 at 434 Macrossan CJ of the Queensland Court of Appeal, in the course of discussing s 31(2) of the Limitation of Actions Act 1974 (Qld), relevantly observed that:
… applicants for extension of limitation periods are not intended by the legislation to be placed in the position where they must establish an entitlement to recover on two occasions, first on the hearing of the application and once more at the trial of the action. Although the requirements of the legislation must be complied with if an extension is to be granted, the extent to which an applicant must show a case on the hearing of the application to extend time will frequently depend on the impression on the judge’s mind of the material which the applicant presents or the existence of which he demonstrates or points to. It is nevertheless recognised as wrong to place potential plaintiffs in anything like a situation where they must on the probabilities show that it is likely they will succeed in their actions. A judge may harbour a feeling that there is a strong chance that particular applicants will fail at trial but, in my opinion, he should not act on the basis of this impression both because that is a question reserved for another occasion and because he cannot know and should not insist on being able to see in all of its ramifications the full strength of the case which will eventually be presented at trial. There are some resemblances in this to the situation of a defendant who resists a summary judgment application. The Court should be cautious in shutting out a party from the opportunity to make his case at the appropriate time. In any situation where proof of a case is difficult and very far from straightforward, it would be very expensive to require a party applying to extend time to demonstrate his case with any high degree of elaboration.
18.The point to be drawn from this passage is that an applicant for leave is not required to establish their final case on the leave application. Similarly, the Court is not to approach the application on that basis.
It follows that on the preliminary comparison required by s 90K(1)(d) of the Act, the husband’s evidence was to be accorded some weight. There was no other evidence. It matters not that evidence capable of being given greater weight could have been called.
The reasons given by the primary judge for not giving the husband’s evidence any weight were, in our opinion, erroneous. It follows that the evidence permitted some comparison between the value of the property available for division if the Agreement stood (up to $100,000) and if it was set aside ($4,000,000 approximately). On that basis, hardship was readily established.
The wife’s case, taken at its highest, was that the parties had been in a relationship for 10 years, during which two children had been born. A significant share of the care of those children, including one who has a significant disability, has fallen upon the wife. That care is likely to continue. The contributions made by the wife taken together with the relevant considerations under s 75(2) of the Act cannot be adequately satisfied out of the smaller pool as opposed to the larger pool.
These grounds succeed. It follows that the orders of the primary judge must be set aside.

Did the primary judge wrongly take into account the lack of a child support assessment and the possibility of spousal maintenance? (Ground 7)

Given the success of Grounds 2, 4, 5 and 6, it is not strictly necessary to consider this ground but we shall do so because it may later become relevant (Kuru v New South Wales (2008) 236 CLR 1 at [12]; see also Kimberly-Clark Australia Pty Ltd v Arico Trading International Pty Ltd (2001) 207 CLR 1 at [34]).
The wife submitted that the primary judge erred because he took into account, adversely to her, the absence of child support and the possibility of her seeking an order for spousal maintenance to attenuate her hardship.
His Honour said:
145.There are two other significant areas where the evidence [of hardship] is deficient. First, the wife’s argument assumes that she will suffer hardship because she cares for [X] and [Y] on “almost a full time basis” with no financial support from the husband so that she has to work part-time. However, there is no evidence of child support assessments nor does the wife’s Amended Response seek child support departure orders. On the available evidence it is not possible to form a view about the relative care responsibilities between wife and husband if the financial agreement is set aside, apart from inferring they are likely to be heavier for the wife. These would be matters relevant to the necessary comparison identified in Fewster, above.
(Original emphasis)
The reference to child support is misplaced because child support is directed at the support of a child and not at ameliorating the hardship of a person caring for the child which may go well beyond support of the child. Obvious examples, speaking generally, would include the loss of the opportunity to earn income due to care of the child, difficulties with the provision of housing and loss of educational opportunities.
His Honour then said:
146.Secondly, the wife makes no claim for spousal maintenance. Under s.75(2)(c) a factor to be considered is whether a party has care and control of a child under 18 years of age.
This, too, is misplaced because of the distinction between applications for division of property and for maintenance which attract different considerations. They are not a substitute for each other. Where both are heard at the same time, the property application must be dealt with first as the outcome may affect the ability of the applicant to support himself or herself or the respondent’s capacity to meet an order (Clauson and Clauson (1995) FLC 92-595).
There is merit in this ground.
This is also sufficient to dispose of the appeal and we shall deal with the remaining grounds briefly.

The remaining grounds

Ground 1, as we understand it, focusses on the asserted failure of the primary judge to find that the assets of the husband had in fact decreased in value since the signing of the Agreement. The submissions referred to the husband’s Financial Statement, where he recorded his net worth to be $5,015,984. However, it was submitted that the increase in value of the assets ($583,599) was due to an inheritance. Under Clause 3 of the Agreement, inheritances received by the husband were excluded from property available for division. Under Clause 5, generally speaking, after-acquired property was also excluded.
The primary judge did not consider this matter because it did not arise on his findings. It is dependent upon the evidence of the current value of assets being accepted. Thus, at best, it seeks to explain that $583,599 was not available for division.
There is force in the submission that if the Agreement stands, this sum (held predominantly in a bank account) is not available for division. As we have seen, the hearing appeared to proceed on that basis. In any event, the division of $583,599 between the parties would not obviously alleviate the wife’s hardship.
Ground 3 asserts that by failing to call evidence, presumably expert evidence, as to the current value of the assets, the husband had failed to give full and frank disclosure of his financial position.
This mistakes evidence for disclosure. The husband had disclosed his assets and his view of their worth in his Financial Statement.
Ground 8 is again directed at spousal maintenance. We have dealt with that topic under Ground 7, where we accepted that it was not a relevant consideration.
Ground 9 asserts that the primary judge erred because he found he was unable to form a view “of the parents’ respective care responsibilities”. In essence, it was submitted that the burden of care of the children would fall on the wife.
This ground is not made out because the primary judge found that the change in circumstances “will continue to cause hardship to both parties” (at [135]). That, of course, included the wife who achieved the finding for which she contended.
Ground 10 contends that an error was made because the primary judge took into account his knowledge of the movement of property prices in Sydney. This submission is based on the penultimate sentence at [142] of his Honour’s reasons. We do not read that sentence, when taken in context and coupled with the husband’s evidence not being accepted, as the primary judge introducing his own estimation of capital growth.

Does the appeal nonetheless fail because the wife did not call evidence of the value of the husband’s assets at the time the agreement was signed?

The husband submitted that even if the wife succeeded on one or more of the above grounds, the appeal must still be dismissed because there was no evidence before the Court as to the value of the assets held by the husband at the time of the Agreement. This was because the Agreement did not bind the parties to the values set out in the Schedule and thus evidence was required as to their actual value as at the time of the Agreement.
We are of the view that this argument is not available to the husband for a number of reasons.
First, we consider that the submission was not adequately raised before the primary judge and that, had it been, the course of the hearing may well have been different (Metwally v University of Wollongong (1985) 60 ALR 68 at 71; Water Board v Moustakas (1988) 180 CLR 491 at 497).
The husband submitted that the argument was adequately raised and pointed to the following passages in the transcript:
[COUNSEL FOR THE HUSBAND]: When one looks at that section, it isn’t enough to establish that there has been a material change of circumstances relating to the care, welfare and development of a child. What has to be established is that, as a result of the change, the child or the applicant – or if the at (sic) has caring responsibility to the child, a party to the agreement – so, as a result of the change, the party will suffer hardship or the child will suffer hardship if the court does not set the agreement aside. There’s a very real difficulty in circumstances where, under the terms of the financial agreement, a claim remains open if it’s – if it’s – does not set aside – a claim remains open under the – under section 79 for a share of any increase in value in the assets contained in schedule 1 of the financial agreement.
Your Honour doesn’t have any valuation evidence of what it was worth then; your Honour doesn’t have any valuation evidence of what it is worth now. I’ve respectfully suggested to my learned friend that that is going to cause grave difficulty for the court in determining whether or not hardship will be suffered at that point in time because I wouldn’t want it to be said that she was taken – my learned friend was taken by surprise when I make that submission at the end of the two days. I’ve been informed that, nonetheless, the wife wishes to proceed with this aspect of her application on the evidence before the court as we stand, and that is, of course, a matter for the wife if that is what she wishes to do, but, as I say, I wouldn’t want it to be said at the end of the case that hasn’t been made abundantly clear, because I should have thought – I won’t say anything further about it. As I say, issues of estoppel will plainly arise if that case is pursued and is dismissed.
…
[COUNSEL FOR THE HUSBAND]: Well, she has been legally represented by her solicitors throughout this year. She said she had not had the properties valued, either now or – as of now, or as at 2007. And she hadn’t asked her solicitors to do that. It makes it extremely difficult, then, for the mother to say to the court, “I will suffer hardship”, or, “[X] will suffer hardship if you don’t set aside this agreement”, because she hasn’t discharged – your Honour, she hasn’t proved what the pool of property will be for your Honour to ultimately divide up…
(Transcript 30 November 2017, p.18 line 32 to p.19 line 7; 1 December 2017, p.72 lines 38–44) (Emphasis added)
In addition, in re-examination the husband said he did not have the assets valued in 2007 (Transcript 30 November 2017, p.66 lines 5–6).
This was, in our opinion, insufficient clearly to raise the issue.
There were but two references in passing to the lack of evidence about the value of the properties in 2007. It was never explained why it was essential for such evidence to be given. No submissions were directed to the proper construction of the Agreement so as to demonstrate that the values in the Schedule were not binding and that evidence of their value was required. If this point was to be taken, express and detailed submissions on these aspects would be expected.
In White v Overland [2001] FCA 1333 at [4], in a commonly adopted passage, Allsop J (as his Honour then was) said:
… by way of general principle, I would simply like to make perfectly plain my view that in the efficient and proper conduct of civil litigation, even civil litigation hard fought between the parties, it should always be recognised that in the propounding of issues for trial, the parties should take steps to ensure that all relevant parties to the dispute are cognisant of what the issues are. Any practice of quietly leaving footprints in correspondence or directions hearings to be uncovered some time later in an attempt to reveal that a matter was always in issue should be discouraged firmly.
(Original emphasis)
Whilst we accept that counsel for the husband genuinely believed that he had fully and completely ventilated this point at the hearing, we do not agree.
The two short sentences referring to the wife not having had the properties valued as at the time of the Agreement did not clearly raise the issue now sought to be agitated. It is a stretch too far to infer the point now sought to be raised from them.
Secondly, contrary to the husband’s submission, we do not accept that the primary judge understood and dealt with the submission that is now advanced.
The husband relies on the following sentences at [144] of the reasons:
…The problem is that there is no evidentiary basis upon which to form a view about the possible movement, or stability, in the value of any assets, including [Property A]. The wife adduced no evidence herself of the value of any assets, despite bearing the onus…
Whilst it is true that these comments are consistent with the argument that the wife had not proven the value of the assets as at the time of the Agreement, they are equally consistent with a failure only to prove the value as at the time of the hearing. They do not assist the husband’s submission.
At [142] his Honour said:
Thus if this evidence were to be accepted, it would also entail accepting that the value of [Property A] had either not changed in over a decade, or had risen by $100,000 only. The wife relied on this evidence to submit that she could expect to share at most in a capital gain of $100,000.
The reference to the value of the property not having changed at all or only by $100,000 clearly indicates a comparison between the values given in the Schedule and the husband’s evidence. This indicates that the primary judge considered the former to be the relevant figures against which to compare the evidence of current values.
Thirdly, the argument cannot properly be raised in the appeal as no Notice of Contention has been filed (r 22.08A of the Family Law Rules 2004 (Cth)). We do not accept the husband’s submission that the issue is raised by Grounds 7 and 8. Self-evidently, they refer to other matters.
Notwithstanding the above, and in the event that we are wrong about these matters, and because we received submissions on it, we shall now turn to the substantive argument.
The Agreement is a contract to which the normal rules of construction apply. It falls to be construed as an agreement which deals with the property of the parties and its possible division. The evident purpose of a binding financial agreement is to oust either wholly or partly the jurisdiction of the Court to divide the parties’ property under s 79 of the Act.
It easily follows that the identification and valuation of the property the subject of the Agreement is entirely unremarkable and, indeed, would be expected in such an agreement.
The relevant principles to be applied were conveniently stated by French CJ, Nettle and Gordon JJ in Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 256 CLR 104:
46.The rights and liabilities of parties under a provision of a contract are determined objectively, by reference to its text, context (the entire text of the contract as well as any contract, document or statutory provision referred to in the text of the contract) and purpose.
47.In determining the meaning of the terms of a commercial contract, it is necessary to ask what a reasonable businessperson would have understood those terms to mean. That inquiry will require consideration of the language used by the parties in the contract, the circumstances addressed by the contract and the commercial purpose or objects to be secured by the contract.
(Footnotes omitted)
As we have said, the Schedule of the Agreement lists the husband’s assets with a value ascribed to each.
Clause 3 of the Agreement then relevantly states:
… [the wife] is not entitled to any benefit from any of the assets or financial resources set out in Schedule 1, other than any increase in value …
The obvious and inescapable conclusion is that the reference to “increase in value” and to Schedule 1 indicates that any increase in value is to be judged against the nominated values in the Schedule.
There is every reason for the parties to agree on these values. It provides certainty for them and avoids the complications of obtaining what might ultimately prove to be contested valuations many years later. There is nothing remarkable about parties agreeing upon property values in proceedings under s 79 of the Act. It is an everyday occurrence in courts applying that section.

Further, parties are entitled to conduct their relations on the basis of agreed facts by which they are then bound. In Con-Stan Industries of Australia Pty Ltd v Norwich Winterthur Insurance (Australia) Ltd (1986) 160 CLR 226 at 244, Gibbs CJ, Mason, Wilson, Brennan and Dawson JJ said:
… Estoppel by convention is a form of estoppel founded not on a representation of fact made by a representor and acted on by a representee to his detriment, but on the conduct of relations between the parties on the basis of an agreed or assumed state of facts, which both will be estopped from denying.
It matters not that the agreement may be contrary to the actual state of affairs (Grundt v Great Boulder Pty Gold Mines Ltd (1937) 59 CLR 641 at 676 per Dixon J).
Finally, as we have already observed, the above construction gives a meaning and purpose to the values in the Schedule which they would otherwise lack.
The only conclusion that can be drawn from the consideration of the Agreement and the Schedule is that the parties agreed upon the amounts ascribed to the various properties and intended to be bound by them. The fact that the husband’s subjective intention may be different (as evidenced by his counsel’s submissions) is not relevant.

Conclusion

It follows from the success of Grounds 2, 4, 5 and 6 that the appeal must be allowed and the orders set aside.
The parties asked us to determine the matter for ourselves. Neither party sought to adduce further evidence. The husband’s position was that he wished to adduce evidence only if he succeeded in persuading the court that the values in the Schedule were not binding.
If the Agreement is not set aside, the evidence establishes an increase in value of the relevant assets of up to $100,000. The husband’s Financial Statement recorded a total value of assets of $5,015,984, an increase of $583,599. Depending on whether or not that increase can be attributed to an inheritance, that sum may or may not be available for division.
Thus, at best, up to $683,599 would be available for division if the Agreement is not set aside and $5,015,984 if it is set aside. As we have said, the hearing below was conducted on the basis that an increase in value of only $100,000 (at best) was established.
Taking into account the other findings of the primary judge as to the application of s 90K(1)(d) of the Act, we are satisfied that the wife would suffer hardship if the Agreement is not set aside. The contributions made by her and the considerations mandated by s 75(2) of the Act to the care of X in particular, and the further considerations that flow from that care, cannot, in our view, be adequately satisfied out of the smaller pool, whether it be the greater or lesser value. Thus, hardship has been established.
There will be an order setting aside the Agreement under s 90K(1)(d) of the Act.

Costs

Orders will be made for the filing of written submissions as to costs.

I certify that the preceding one hundred (100) paragraphs are a true copy of the reasons for judgment of the Honourable Full Court (Strickland, Aldridge & Austin JJ) delivered on 28 May 2019

Associate:

Date: 28 May 2019