Furlong & Biscon
[2021] FedCFamC1F 184
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Furlong & Biscon [2021] FedCFamC1F 184
File number(s): SYC 5056 of 2020 Judgment of: HARTNETT J Date of judgment: 11 November 2021 Catchwords: FAMILY LAW – PROPERTY – BINDING FINANCIAL AGREEMENT – Where agreement entered into prior to parties’ marriage – Application of the wife seeking to set aside a Binding Financial Agreement pursuant to section 90K of the Family Law Act 1975 (Cth) – Where the wife alleges the Agreement is void, voidable or unenforceable by reason of uncertainty pursuant to section 90K(1)(b) – Consideration of the terms of the binding financial agreement – Where the Agreement is found to be void, voidable or unenforceable by reason of uncertainty – Application allowed. Legislation: Evidence Act 1995 (Cth), s 140
Family Law (Fees) Regulations 2012 (Cth)
Family Law Act 1975 (Cth), ss 79, 90K, 90KA
Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)
Cases cited: Fewster & Drake [2016] FamCAFC 214
Kostres & Kostres [2009] FamCAFC 222
Division: Division 1 First Instance Number of paragraphs: 60 Date of hearing: 21-22 June 2021 & 20 August 2021 Place: Sydney (via video link) Counsel for the Applicant: Mr Othen Solicitor for the Applicant: Matthews Folbigg Pty Ltd Counsel for the Respondent: Ms Clifford Solicitor for the Respondent: Gayle Meredith & Associates ORDERS
SYC 5056 of 2020 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MS BISCON
ApplicantAND: MR FURLONG
Respondent
ORDER MADE BY:
HARTNETT J
DATE OF ORDER:
11 NOVEMBER 2021
THE COURT ORDERS THAT:
1.The Binding Financial Agreement (“BFA”) be set aside as void, voidable or unenforceable by reason of uncertainty pursuant to section 90K(1)(b) of the Family Law Act 1975 (Cth) (“the Act”).
2.The parties and any lawyers on the record shall personally attend a Conciliation Conference with a Registrar at 9.00am on 9 February 2022.
3.The parties and any lawyers on the record shall follow any directions from the Registrar convening the conference in relation to attendance in person, by Microsoft Teams or by telephone.
4.Unless they obtain an exemption of such fee in accordance with the Family Law (Fees) Regulations 2012 (Cth), the Applicant and Respondent must pay the Conciliation Conference fee in equal amounts no less than 14 days prior to the Conference.
5.No later than 4.00 pm on 27 January 2022 each party must:
(a)ensure that all documents required to be exchanged between parties pursuant to Chapter 6 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) have been exchanged;
(b)ensure that any private expert report that is relevant to the proceedings has been filed;
(c)provide to the court by emailing [email protected] and to the other party a single collated bundle of documents comprising:
(i)a Confidential Outline of Case (Dispute Resolution)
(ii)a detailed minute of Orders Sought;
(iii)details of any previous or current family violence orders;
(iv)a copy of any document exchanged between the parties which is directly relevant to an issue remaining in dispute (with relevant passages highlighted);
(v)particulars of any financial resource;
(vi)a valuation or market appraisal of any real estate or other asset the value of which is in dispute;
(vii)statements for, and where applicable, valuations of any superannuation interest; and
(viii)written confirmation that the trustee of any fund that may be the subject of a splitting order has been afforded procedural fairness.
6.There be liberty to the parties or either of them to apply to the chambers of the Honourable Justice Hartnett for a mention of the matter.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Furlong & Biscon has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
HARTNETT J:
INTRODUCTION
By her Initiating Application filed 19 August 2020 the Applicant wife (“the wife”) sought, amongst other orders, to set aside a Binding Financial Agreement (“BFA”) entered into between the parties on 25 June 2014. The BFA recited that the BFA would commence to operate on the date of the parties’ marriage, being later in 2014. There is no issue that the BFA is a binding financial agreement.
The BFA was made under s 90B of the Act and proposed to deal with how the property of the parties was to be dealt with post separation. The BFA complied with the formalities as set out in sections 90B and 90G of the Act, and accordingly, section 71A of the Act operates as a bar to property adjustment claims by either party unless and until it is set aside by the Court.
The wife’s application is that the BFA be set aside as void, voidable or unenforceable by reason of uncertainty pursuant to section 90K(1)(b) of the Family Law Act 1975 (Cth) (“the Act”). In the alternative, the wife seeks orders that the BFA be set aside pursuant to section 90K(1)(d) of the Act. If successful, the wife seeks property adjustment orders as between herself and the husband and a payment of spousal maintenance by the husband to her. By his Response to Initiating Application filed 17 November 2020, the Respondent husband (“the husband”) seeks the dismissal of the wife’s application with costs.
The question of whether the BFA should be set aside proceeded as a threshold issue to any consideration of the wife’s application for relief under section 79 of the Act.
The standard of proof in the proceeding is the balance of probabilities.[1] Statements of fact in these reasons are findings of fact on the balance of probabilities.[2]
[1] Evidence Act 1995 (Cth), s 140.
[2] Ibid.
The proceeding was heard on the 21 and 22 June 2021 and then adjourned over to a further hearing date of 20 August 2021 for cross-examination of Mr C. During that adjourned period, the husband determined not to take issue with the single expert’s valuations and accordingly no cross-examination of Mr C then occurred. His evidence was unchallenged and is accepted by the court.
MATERIAL RELIED UPON
The wife relied upon the following:
(a)Initiating Application filed 19 August 2020;
(b)Affidavit of Evidence in Chief filed 1 April 2021 with annexures marked exhibit “W1”;
(c)Financial Statement filed 1 April 2021;
(d)Single Expert Valuation reports of Mr C dated 4 June 2021; and
(e)Case Outline filed 18 June 2021.
The husband relied upon the following:
(a)Response to Initiating Application filed 17 November 2020;
(b)Affidavits of Evidence filed 17 November 2020 and 14 April 2021;
(c)Financial Statement filed 17 November 2020;
(d)Case Outline filed 18 June 2021; and
(e)The husband’s tender bundle of documents marked exhibit “H1”.
Each of the wife and the husband were cross-examined and were credible witnesses.
BACKGROUND
The husband was born in 1974 and is now aged 47 years. The wife was born in 1989 and is now aged 32 years.
The parties commenced their cohabitation in about 2012 in the home of the husband at B Street, Suburb D in the State of New South Wales (“NSW”) (the “Suburb D property”). The wife was at the time completing a four year degree course at university and living at both E Street, F Town NSW (the home of one of her parents) (the “F Town property”) as described in the BFA, and also at the home of her other parent. In reality however, the wife was living for most of the week in the home of the husband from around June 2009, a matter agreed between the parties.
The parties met in June 2008, when the wife was aged approximately 19 years and the husband approximately 34 years. The wife was about to start university. The husband was self-employed as a tradesperson, had a child from a previous relationship, X born in 2005 (“X”), and worked for G Pty Ltd (“G Company”), a company established by his father in conjunction with his mother, and in which the husband had a 10 per cent minority shareholding. X formed a part of the parties’ household for periods during the parties’ relationship and cohabitation until the parties’ separation on 5 October 2018.
The parties’ cohabitation period was one of approximately six years.
Prior to the parties’ commencement of cohabitation, the husband purchased the Suburb D property. He purchased that property on 17 June 2008, in his sole name, and for the sum of $685,000. The property was encumbered by mortgage in a sum unknown to the Australian New Zealand Bank (“ANZ”). Having purchased the Suburb D property, the husband immediately began the task of extensively renovating the property.
On 1 September 2010, the husband purchased further property in ownership with his parents. That property was situate at H Street, Suburb J, NSW (the “Suburb J property”). This property was owned by the husband as to 50 per cent as a tenant in common with his parents. The Suburb J property purchased for the sum of $1,220,000 and was encumbered by mortgage to the ANZ bank. The husband’s equity in this property upon purchase was approximately $610,000 minus his share of the mortgage[3] which is unknown. The husband indicated in the BFA that his liability was $610,000 in 2014.
[3] The husband’s Case Outline filed 18 June 2021.
Post the parties’ commencement of cohabitation in 2012, and in June 2013, the wife obtained permanent part-time employment with the K Company. Her starting salary was approximately $28,000 per annum. The wife continued to work on a part-time basis throughout the relationship save for a period of maternity leave of twelve months duration during which she was not employed. At the time of the hearing of the threshold issue, the wife’s salary was $55,536 per annum in respect of her ongoing part-time work of three days each week.
The parties became engaged in 2012 during a trip to Country L.
In the months prior to their wedding in 2014, the husband sought for the parties to enter into the BFA. The wife agreed to do so. The assets and liabilities owned by each of the parties prior to the marriage are set out in Annexures A and B of the BFA. The wife did not seek any financial disclosure from the husband at the time of her entering into the BFA however nothing turns on that. The wife accepted the property valuations as espoused by the husband. The wife obtained independent legal advice as to the entering into of the BFA and its terms and other associated matters, as did the husband. Neither party take issue with the manner in which they entered into the BFA.
The parties married in 2014 in Country L. Shortly after the wedding, the husband’s father passed away and the husband’s mother inherited her husband’s estate including his shares in the company, G Company. The husband’s mother became the sole director of G Company. The husband’s minority 10 per cent shareholding remained.
In 2015, the husband purchased an investment property at M Street, Suburb N NSW for $1,050,000 (the “Suburb N property”) in his sole name. This property was leased to tenants. The husband received the rental receipts.
In October 2016, the husband asked the wife to join him in travelling to the P Company car sales building. In the basement parking area where a Motor Vehicle 1 was situated, and covered up, the cover was lifted by the husband to reveal a new car with the wife’s initials on the licence plate. This was, on the wife’s evidence, a surprise gift from the husband to the wife. In cross examination, counsel for the wife asked the husband “And you said to my client, “Surprise” ” to which the husband agreed.[4] Counsel for the wife suggested further that “...you went to that trouble because you wanted to give my client a gift of the motor vehicle” to which the husband responded “No…It was a family gift to the family for her to drive.”[5] The wife has used this motor vehicle since separation as it remains in her possession. The husband did not agree as claimed by the wife that following separation he had said to the wife “The car is yours. It was a gift.” He maintains it is his property. The motor vehicle was purchased for the sum of approximately $84,000. It was registered in the husband’s sole name and remains so registered post-separation. The wife pays the running costs, maintenance costs and paid the registration in 2019 in respect of the vehicle.[6] The husband pays for the comprehensive insurance.[7] The wife later sold her Motor Vehicle 2, which was part of her “separate property” under the BFA, for $12,000. The husband retained the proceeds of sale as agreed between the parties, the wife considering she had effectively obtained ownership of a new car.
[4] Transcript 21 June 2021 p. 53.
[5] Transcript 21 June 2021 p. 53 at lines 36-44.
[6] Ibid.
[7] Ibid.
The parties’ son Y was born in 2017 (“Y”).
In or around March-April 2017, the husband purchased a property at Q Street, Suburb O NSW also known as R Street, Suburb O folio identifier … (the “Suburb O property”) for $1,700,000 in his sole name. The purchase price and acquisition costs were paid by the husband and from a loan secured by mortgage on the property to ANZ.
In April 2017, the husband, wife and Y moved out of the Suburb D property and into the Suburb O property. The husband leased out the Suburb D property to tenants. He received the rental receipts.
In 2017, the husband sold his Recreational Boat 1 for approximately $780,000. He used the sale proceeds to reduce the mortgage secured on the Suburb O property.
In 2017, the husband sold the Suburb N property for the sum of $1,400,000.
In October 2018, the parties separated. The wife moved with Y to her mother’s home until November 2018, when she moved into a three bedroom rented premises at Suburb S. She paid $420.72 in rent per week. The wife claimed that the reason she moved from Suburb S in May 2020 was because it was up for sale and she did not “have any long-term security in terms of what was happening with that.”[8]
[8] Transcript 21 June 2021, p. 25 at lines 17-19.
In April 2020, the wife formed a personal relationship with Mr T. Her evidence is she is not engaged to Mr T as asserted by the husband. In May 2020, the wife moved into a three bedroom townhouse owned by her mother and her mother’s partner in F Town. The wife pays $520 each week in rent.
On 15 October 2020, the parties were divorced.
The Law
Sections 90K(1)(b) and (d) of the Act are relevantly as follows:
Circumstances in which court may set aside a financial agreement or termination agreement
(1)A court may make an order setting aside a financial agreement or a termination agreement if, and only if, the court is satisfied that…
(b) the agreement is void, voidable or unenforceable; or…
(d)since the making of the agreement, a material change in circumstances has occurred (being circumstances relating to the care, welfare and development of a child of the marriage) and, as a result of the change, the child or, if the applicant has caring responsibility for the child (as defined in subsection (2)), a party to the agreement will suffer hardship if the court does not set the agreement aside; or…
Section 90K(2) of the Act is as follows:
(2)For the purposes of paragraph (1)(d), a person has caring responsibility for a child if:
(a) the person is a parent of the child with whom the child lives; or
(b) a parenting order provides that:
(i) the child is to live with the person; or
(ii) the person has parental responsibility for the child.
Pursuant to s 90KA of the Act, the court is empowered to determine whether the BFA is enforceable or effective. Section 90KA of the Act is as follows:
Validity, enforceability and effect of financial agreements and termination agreements
The question whether a financial agreement or a termination agreement is valid, enforceable or effective is to be determined by the court according to the principles of law and equity that are applicable in determining the validity, enforceability and effect of contracts and purported contracts, and, in proceedings relating to such an agreement, the court:(a)subject to paragraph (b), has the same powers, may grant the same remedies and must have the same regard to the rights of third parties as the High Court has, may grant and is required to have in proceedings in connection with contracts or purported contracts, being proceedings in which the High Court has original jurisdiction; and
(b)has power to make an order for the payment, by a party to the agreement to another party to the agreement, of interest on an amount payable under the agreement, from the time when the amount became or becomes due and payable, at a rate not exceeding the rate prescribed by the applicable Rules of Court; and
(c) in addition to, or instead of, making an order or orders under paragraph (a) or (b), may order that the agreement, or a specified part of the agreement, be enforced as if it were an order of the court.
The Terms of the BFA
In the BFA under the heading “OPERATIVE PART”, “separate property” is defined relevantly, as property which is:
2. Separate property…
(c)‘Separate property’ is defined as and property which is:
(i)Property set out in annexure A and B of this agreement;
(ii)Acquired before cohabitation or after separation;
(iii)Acquired by gift or inheritance from a third party to one but not both of the parties;
(iv)Acquired in exchange for any separate property or an increase in the value of any separate property;
(v)Any damages payments or potential damages payments;
(vi)All income and other gains derived from separate property for whatsoever reason; and
(vii)The increase in value of all separate property for whatever reason.
The “separate property” of the husband is set out in Annexure A to the BFA. The “separate property” of the wife is set out in annexure B to the BFA. Each of the parties were free to dispose of their individual “separate property” as they saw fit during the relationship.
Under the heading “During the marriage” paragraph 3(b) of the BFA provided as follows: “Any property acquired or borrowings undertaken by the parties shall be recorded in writing or by title documentation to be the asset or liability of one or other or both of them.”
Under the heading “Division of property in the event of breakdown of the marriage” the following is set out in paragraph 5 of the BFA:
(a)It is agreed by the parties that in the event of the breakdown of the marriage evidenced by separation as set out in paragraph 4 above, each party will remain entitled to their separate property.
(b)In relation to any property which is not separate property, the parties agree that this property will be divided equally between them but if no agreement can be reached, by the court in accordance with the Family Law Act 1975 or such other applicable legislation at the time the application is made to the court.
(c)It is agreed that with respect to the matrimonial home that Ms Biscon and Mr Furlong will share equally the increase in the value of the home from the date of marriage until the date of separation.
(d)The parties agree that in the event either of them makes an application to the court for property division pursuant to the Family Law Act 1975, they will not ask the court to take into consideration their separate property pursuant to sections 79 and 75 (2) of the Act.
The separate property of the husband is set out in Annexure A and is as follows:
Assets of Mr Furlong
Agreed estimated value
1. Residential premises at B Street Suburb D
$930,000
2. Residential unit at Suburb J
$700,000
3. Motor Vehicle 3
$15,000
4. Recreational Boat 2
$60,000
5. Recreational Boat 1
$800,000
6. Household furniture
$50,000
7. Motor Vehicle 4
$40,000
8. CBA Netbank saving account
$9,500
9. 10% Shareholding in G Pty Ltd
variable
10. Superannuation benefit with G Pty Ltd
$250,000
Total assets:
$2,854,500
Liabilities of Mr Furlong
Agreed estimated value
1. Mortgage loan to ANZ Bank secured over Suburb J unit
$610,000
2. Credit Cards
$3,000
3. Loan for Recreational Boat 1
$375,000
Total liabilities
$988,000
Total net assets of Mr Furlong
$1,866,500
The separate property of the wife is set out in Annexure B and is as follows:
Assets of Ms Biscon
Agreed estimated value
1. Motor Vehicle 2
$19,500
2. Engagement ring
$18,000
3. Commonwealth Bank Savings accounts
$14,000
4. Jewellery
$-
5. Superannuation benefit with Super Fund 1
$11,100
Total assets:
$62,600
Liabilities of Ms Biscon
Agreed estimated value
1. Credit Card
$-
Total liabilities
$0
Total net assets of Ms Biscon
$62,600
Evidence of Mr C
Mr C is an Australian Property Institute (“API”) Certified Practising Valuer and the Director and Principal of U Valuers. He prepared a valuation report for the Suburb D property and a valuation report for the Suburb O property. Each of these reports are dated 4 June 2021.
Mr C’s valuation of the Suburb D property as at the retrospective date of 1 April 2017 is $1,300,000. That date is the date on which the parties both vacated the Suburb D property in order to take up residence in the Suburb O property.
From the date of the agreement until 1 April 2017, the Suburb D property increased in value by $370,000.
Mr C’s valuation of the Suburb O property as at the retrospective date of 5 October 2018 is $2,200,000. That date is the date on which the parties separated on a final basis. The wife departed the property and moved with the child Y to reside in her mother’s home. Y subsequently spent time with each of his parents in an arrangement as then agreed between them. From the time of its purchase during cohabitation, this property had increased in value by approximately $500,000.
CONSIDERATION
The husband asserted that the BFA is capable of unambiguous interpretation as to its effect, and so is enforceable against the wife. The wife asserted that the BFA is either void for uncertainty or simply unenforceable against the wife.[9] The wife submitted thereafter that if the court determines the BFA is capable of enforcement, and the parties’ entitlement to property under its terms can be clearly understood, then in the alternative the wife seeks the BFA be set aside by reason of hardship pursuant to s 90K(1)(d) of the Act.
[9] The wife’s Case Outline filed 18 June 2021.
There are three main operating provisions of the BFA of relevance:
(a)if the property is “separate property” then it remains the sole property of the person who owns it after separation;[10]
(b)if the property is “not separate property” then it is divided equally unless the parties do not agree in which case the Act still applies;[11] and
(c)“the matrimonial home” is to be treated differently; the increase in value from date of marriage to date of separation is to be divided equally.[12]
[10] See cl 5(a) of the BFA.
[11] See cl 5(b) of the BFA.
[12] See cl 5(c) of the BFA.
The wife submitted that the key questions for the court are:[13]
(a)Which property is “separate property”?
(b)Which property is “not separate property”?
(c)Which property is “the matrimonial home”?
[13] The wife’s Case Outline filed 18 June 2021 paragraph 7.
The wife’s case is focused on the question of the interpretation of the BFA, whether it is void for uncertainty or whether it is effectively unenforceable.[14] If contrary to her submissions, the BFA is determined to be valid and enforceable, and the parties bound by its terms, then the wife submits that her circumstances will be impacted by hardship if the BFA is not set aside.[15]
[14] Transcript 21 June 2021, p. 10 lines 5-10.
[15] Ibid.
The BFA does not define “the matrimonial home”. It is agreed that when the parties executed the BFA, and when they subsequently married, they lived at the Suburb D property.[16] The wife submitted that the[17] common understanding of the expression “the matrimonial home” would suggest the Suburb D property was, at the time of the agreement, the matrimonial home. The husband did not take issue with that. However, contrary to such common understanding and even though the parties were living in the Suburb D property at the time they entered into the BFA, it is listed in Annexure A to the BFA, meaning, it is defined as the husband’s “separate property.”
[16] The wife’s Case Outline filed 18 June 2021 paragraph 8.
[17] Ibid.
It is uncertain from the terms of the BFA itself whether the parties, at the time they entered the BFA, intended the Suburb D property to be “separate property”, in which case the wife would have no entitlements to it, or whether, contrary to the terms of the BFA, it was “the matrimonial home”, in which case clause 5(c) would apply.[18]
[18] The wife’s Case Outline filed 18 June 2021 paragraph 10.
Complicating the exercise of determining that which the parties intended is the uncontroversial fact that, during the marriage, the parties moved out of the Suburb D property and into the Suburb O property, which was also acquired in the husband’s sole name. The Suburb D property was not sold in order to acquire Suburb O, and both properties remain in the possession and ownership of the husband. The wife poses the following questions in respect of this move in residence of the family:[19]
(a)if it ever was, is the Suburb D property still “the matrimonial home”?
(b)if it was “the matrimonial home” is it now “separate property” or “not separate property”?
(c)is the Suburb O property “the matrimonial home”?
(d)does the BFA contemplate there being two “matrimonial homes”?
(e)is the Suburb O property “separate property” or “not separate property”?
[19] The wife’s Case Outline filed 18 June 2021 paragraph 11. :
Counsel for the wife submitted that the BFA does not contemplate the above possibilities which I find it does not, and that the court cannot divine the intentions of the parties when they entered into the BFA as to how to deal with a new property they lived in for a part of their matrimony, particularly given it was acquired using money other than the proceeds of sale of the previous home.
Counsel for the husband conceded that there is difficulty in reconciling clauses 5(c) and 2(c)(vii) of the BFA. However, the court was urged to remedy this by rectification. In other words, it was submitted that clauses 2(c)(vii) should be constructed with the phrase “subject to 5(c)” added to it in order to make the BFA enforceable. It is clear that from the inception of the BFA, there was ambiguity about the Suburb D property.
If as the parties agree, the matrimonial home was, at the entering into of the BFA, the Suburb D property then did that property become something else or remain “the matrimonial home?” If the Suburb O property is not “the matrimonial home”, and at the time of execution of the BFA it was not, nor was it property of the parties at all, then it must either be “separate property” or “not separate property.” The BFA at clause 2(c)(ii) defines “separate property” as “acquired before cohabitation or after separation” which suggests the Suburb O property is not “separate property”. Clause 2(c)(iv) also defines “separate property” as “acquired in exchange for any separate property” which the Suburb O property was not. Clause 2(c) is silent about whether the name in which the property was acquired has any bearing on the question.
In the event that the Suburb O property is “not separate property”, then it is left to be dealt with under clause 5(b) of the BFA and the court’s power to deal with it is at large. The husband did not support this interpretation and ultimately submitted to the court that the Suburb O property is also “the matrimonial home” along with the Suburb D property. The Suburb D property has not been the home of either party since it was vacated by the parties in April 2017. Counsel for the wife submitted that in order “to avoid the court having jurisdiction over the Suburb O property, the husband is prepared to torture the language of the agreement such that the court can accept this was genuinely what the parties intended.”[20] The court finds merit in that submission.
[20] The wife’s Case Outline filed 18 June 2021 paragraph 16.
Although he did not, the BFA allowed the husband to sell the Suburb D property because it was his “separate property” as defined. Whilst the husband may wish it to be so, and indeed at one point argued that the Suburb O property was his “separate property”, the Suburb O property is not his “separate property” under the definition in the BFA. There will be proceedings initiated if the parties cannot agree how to divide the Suburb O property even if I was satisfied that the agreement could be upheld, which I am not.
The fate of the Motor Vehicle 1 under the BFA is also in doubt. The wife’s “separate property” Motor Vehicle 2 was sold, and the husband retained the sale proceeds of that motor vehicle. The wife agreed that clause 2(d) of the BFA provided that “both parties are free to dispose of their separate property as they see fit during the relationship.”[21] The wife was content for the sale proceeds of the Motor Vehicle 2 to go to the husband but as a result of her understanding, and in accordance with her evidence, that the husband had purchased for her a Motor Vehicle 1 as a gift and in effect as a substitute vehicle.[22] Again, I cannot determine the intention of the parties as to the division and/or ownership of this property from the BFA. What provision is made if the husband decides to give his wife a gift, but registers that gift in his sole name? Or alternatively what provision is made where the wife deals with her separate property on the mistaken belief, or because it is misrepresented to her, in a manner she otherwise would not?
[21] Transcript 21 June 2021, p.34 at lines 36-37.
[22] Transcript 21 June 2021 p 35.
The fact that the separate funds the wife held in her Commonwealth bank accounts was to be dealt with by her and was dealt with by her, as she saw fit, in compliance with the BFA, does not eradicate the ambiguity and uncertainty of what precisely the parties intended as to an overall alteration of their respective property interests as conveyed by the terms of the BFA. Any suggestion of a carving out of any provision, which was not made by either counsel, would not save the BFA.
The husband has not paid the wife any money in respect of his obligations that he says he has under the BFA. Such non-payment relates to the uncertainty of the terms of the BFA for both parties.[23]
[23] Transcript 21 June 2021, p 72 at lines 25-29.
The husband nevertheless, contended during the hearing, that the BFA can be interpreted to mean there are two matrimonial homes, and that was the intention of the parties. Accordingly, the wife’s entitlement is to a 50 per cent share of the increase in value of the Suburb D property until 1 April 2017, and then a 50 per cent share of the increase in value of the Suburb O property until the date of separation, a payment of $435,000.
In my view, the terms of the BFA do not provide clarity as to what was the intention of the parties at the time of entering into the BFA, and are ambiguous. The meaning of words and expressions used in the BFA is not certain. As was said by the Full Court in Kostres & Kostres at paragraph 129 as follows:[24]
129.While, for the purpose of construing the agreement a court should, as in the context of a commercial agreement, apply an objective test of a reasonable bystander to the construction of an agreement, it cannot give meaning to an agreement whose terms are so imprecise or ambiguous the parties’ intent cannot be discerned. This is particularly so when regard is had to provisions of Part VIIIA in the overall context of the Act.
[24] [2009] FamCAFC 222.
CONCLUSION
The wife’s hardship grounds were on the basis that there has been a material change of circumstances relating the care, welfare and development of a child by reason of the birth of the child, and the subsequent care of the child.[25] If the BFA is not set aside, then by reason of the material change in circumstances, the wife will suffer hardship. This ground was pleaded in the alternative and need not be considered here given the application is acceded to. The court has determined that the BFA must be set aside. There is thus no determined quantum of monies that the wife shall receive pursuant to the BFA. That sum would be a fact relevant to the consideration of the wife’s alternate ground. Without it, I have decided the totality of the question of whether the wife would suffer hardship if the BFA was not set aside, cannot be determined.
[25] Fewster v Drake [2016] FamCAFC 214.
I find that the terms of the BFA are ineffective and cannot be enforced. The BFA in its entirety is void for uncertainty and shall thus be set aside. What flows from that is that any alteration of the parties’ property interests shall be determined under s 79 of the Act.
I certify that the preceding sixty (60) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Hartnett. Associate:
Dated: 11 November 2021
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