Gonsalves & Gonsalves (No 3)
[2023] FedCFamC1F 1069
•13 December 2023
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Gonsalves & Gonsalves (No 3) [2023] FedCFamC1F 1069
File number(s): SYC 1702 of 2019 Judgment of: CHRISTIE J Date of judgment: 13 December 2023 Catchwords: FAMILY LAW – APPLICATION FOR ISSUE OF WARRANT – Non-compliance with subpoena – Where a subpoena had been issued to a third party to attend court to give evidence – Where the third party swore an affidavit shortly before the hearing indicating she was unwell and unable to give evidence – Where the issue of a warrant would cause undue delay – Application dismissed.
FAMILY LAW – EVIDENCE – Application to rely on affidavit of a deponent unavailable for cross-examination – Where allowing the moving party to rely on the affidavit would create unfair prejudice to the objecting party – Where the probative value of the evidence is substantially outweighed by the unfair prejudice occasioned to the objecting party – Application dismissed.
FAMILY LAW – PROPERTY – Financial Agreements – Where the parties entered into a financial agreement pursuant to s 90D of the Family Law Act 1975 (Cth) – Where both parties asserted the agreement was valid and binding – Where the applicant seeks enforcement of a part of the agreement which would require the respondent to split a superannuation interest in his name – Where the agreement did not contain any indication of the value of parties’ respective superannuation entitlements – Where there is no evidence to indicate that the parties were aware of the value of their respective superannuation entitlements – Rectification – Where it is not established that there was a common intention between the parties in sufficiently clear terms – Where rectification is not available – Application dismissed.
Legislation: Evidence Act 1995 (Cth) s 135 and s 165
Family Law Act 1975 (Cth) Pt VIIIA, ss 79, 90D, 90G
Federal Circuit and Family Court of Australia Act 2021 (Cth) s 67
Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) r 6.41
Cases cited: Birdwood & Gravino (2023) FLC 94-149
Chartbrook Ltd v Persimmon Homes Ltd [2009] AC 1101
Graham & Squibb (2019) FLC 93-892
Maralinga Pty Ltd v Major Enterprises Pty Ltd (1973) 128 CLR 336
Naparus v Frankham [2020] FamCAFC 32
Senior & Anderson (2011) FLC 93-470
Simic v New South Wales Land and Housing Corporation (2016) 260 CLR 85
Division: Division 1 First Instance Number of paragraphs: 99 Date of hearing: 28 November 2023 Place: Sydney Counsel for the Applicant: Ms Clarke Solicitor for the Applicant: J S Pinto & Co Counsel for the Respondent: Ms Ingenito Solicitor for the Respondent: Bazaliza Lawyers ORDERS
SYC 1702 of 2019 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MS GONSALVES
Applicant
AND: MR GONSALVES
Respondent
ORDER MADE BY:
CHRISTIE J
DATE OF ORDER:
23 DECEMBER 2023
THE COURT ORDERS THAT:
1.The Further Amended Application of the wife filed 7 November 2023 is dismissed.
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 a pseudonym has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
CHRISTIE J
This matter relates to a financial agreement entered into by Ms Gonsalves, the wife, and Mr Gonsalves, the husband, concerning division of the parties’ property following divorce.
Both parties contended that the agreement, entered into under s 90D of the Family Law Act 1975 (Cth) (“the Act”), was valid and binding.
The wife sought enforcement of a part of the agreement which, she submitted, required the husband to split a superannuation interest in his name to achieve an overall equal division of the parties’ superannuation.
The husband sought a declaration that there was complete performance of the agreement and accordingly, the wife’s application for enforcement be dismissed.
At the final hearing the wife relied on the following material:
(a)A Third Further Amended Application filed 7 November 2023; and
(b)An affidavit of Ms Gonsalves filed 23 November 2023.
At the final hearing the husband relied on the following material:
(a)An Outline of Case Document filed 28 November 2023;
(b)An Amended Response to Initiating Application filed 22 November 2022;
(c)An affidavit of Mr Gonsalves filed 14 June 2019;
(d)An affidavit of Mr Gonsalves filed 13 April 2021; and
(e)A letter from G Company dated 8 April 2021 (which became Exhibit 1 in proceedings).
BACKGROUND
The parties married and commenced cohabitation in 1998.
There are two children of the marriage: Mr C born 1999 and Mr D born 2004.
The parties separated on a final basis on 28 November 2013 and remained living under the same roof until September 2014. Their divorce was made final in early 2016.
On 8 June 2016 the parties entered into a financial agreement under s 90D of the Act.
On 19 March 2019 the wife commenced proceedings in the Federal Circuit Court (as it then was). It was transferred to the Federal Circuit and Family Court of Australia (Division 1) on 10 November 2020.
The matter came before me for case management on 5 September 2022. On that date the matter was listed for final hearing in a rolling list scheduled to commence on 13 March 2023.
On 15 December 2022 my chambers received correspondence from the solicitor for the husband who, amongst other concerns, foreshadowed that the husband would make an application to attend the final hearing by electronic communication. That application was filed on 2 March 2023.
The matter was listed for mention before me on 3 March 2023. On that occasion I confirmed that Country K interpreters had been booked for both parties for the final hearing and approved the husband’s application to attend the hearing by electronic communication.
Despite the application being approved, the husband’s solicitor advised that the husband would be unable to attend the final hearing (even electronically) due to work commitments.
In circumstances where the final hearing had been listed since September 2022 and the applicant wished to proceed on the allocated dates, I declined to vacate the final hearing.
As it transpired, there were other matters which meant that the trial was vacated by consent. The husband sought to rely on an affidavit of Ms Beller filed 9 March 2023. Ms Beller acted for the wife at the time of the signing of the financial agreement.
The husband filed an affidavit in which he indicated he had given explicit instruction to his solicitor, Mr E, that the agreement was not to include a split of his superannuation entitlements. The wife argued, successfully, that this evidence waived privilege in respect of Mr E’s file at least during that period leading up to the signing of the agreement and I granted leave to inspect documents produced on subpoena by Mr E which fell into the period March 2016 to June 2016. It was common ground between the parties that very few documents were produced and none found their way into evidence.
On 13 March 2023 I determined the claim of the wife for privilege over the file of Ms Beller and permitted the husband to rely on Ms Beller’s affidavit.
The final hearing did not proceed on 13 March 2023 by agreement and the matter was relisted on 28 November 2023, on which day I took evidence and submissions and reserved judgment.
THE LAW
The agreement was made under s 90D of the Act which provides:
90D Financial agreements after divorce order is made
(1) If:
(a) after a divorce order is made in relation to a marriage (whether it has taken effect or not), the parties to the former marriage make a written agreement with respect to any of the matters mentioned in subsection (2); and
(aa) at the time of the making of the agreement, the parties to the former marriage are not the spouse parties to any other binding agreement (whether made under this section or section 90B or 90C) with respect to any of those matters; and
(b) the agreement is expressed to be made under this section;
the agreement is a financial agreement. The parties to the former marriage may make the financial agreement with one or more other people.
(2) The matters referred to in paragraph (1)(a) are the following:
(a) how all or any of the property or financial resources that either or both of the spouse parties had or acquired during the former marriage is to be dealt with;
(b) the maintenance of either of the spouse parties.
(3) A financial agreement made as mentioned in subsection (1) may also contain:
(a) matters incidental or ancillary to those mentioned in subsection (2); and
(b) other matters.
(4) A financial agreement (the new agreement) made as mentioned in subsection (1) may terminate a previous financial agreement (however made) if all of the parties to the previous agreement are parties to the new agreement.
Section 90G of the Act provides for the circumstances in which an agreement made under Pt VIIIA will be binding. It is axiomatic that to be enforceable, the agreement must be binding.
Section 90G of the Act provides:
90G When financial agreements are binding
(1)Subject to subsection (1A), a financial agreement is binding on the parties to the agreement if, and only if:
(a) the agreement is signed by all parties; and
(b)before signing the agreement, each spouse party was provided with independent legal advice from a legal practitioner about the effect of the agreement on the rights of that party and about the advantages and disadvantages, at the time that the advice was provided, to that party of making the agreement; and
(c)either before or after signing the agreement, each spouse party was provided with a signed statement by the legal practitioner stating that the advice referred to in paragraph (b) was provided to that party (whether or not the statement is annexed to the agreement); and
(ca)a copy of the statement referred to in paragraph (c) that was provided to a spouse party is given to the other spouse party or to a legal practitioner for the other spouse party; and
(d)the agreement has not been terminated and has not been set aside by a court.
Note:For the manner in which the contents of a financial agreement may be proved, see section 48 of the Evidence Act 1995.
(1A) A financial agreement is binding on the parties to the agreement if:
(a) the agreement is signed by all parties; and
(b)one or more of paragraphs (1)(b), (c) and (ca) are not satisfied in relation to the agreement; and
(c) a court is satisfied that it would be unjust and inequitable if the agreement were not binding on the spouse parties to the agreement (disregarding any changes in circumstances from the time the agreement was made); and
(d)the court makes an order under subsection (1B) declaring that the agreement is binding on the parties to the agreement; and
(e)the agreement has not been terminated and has not been set aside by a court.
(1B)For the purposes of paragraph (1A)(d), a court may make an order declaring that a financial agreement is binding on the parties to the agreement, upon application (the enforcement application) by a spouse party seeking to enforce the agreement.
(1C)To avoid doubt, section 90KA applies in relation to the enforcement application.
(2)A court may make such orders for the enforcement of a financial agreement that is binding on the parties to the agreement as it thinks necessary.
Section 90KA of the Act provides:
90KA 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.
CONSIDERATION
There were two preliminary issues which required determination before the matter could commence on 28 November 2023.
Oral application for a warrant
On 9 March 2023 the respondent filed and served an affidavit by Ms Beller. Ms Beller was a solicitor employed by a firm named M Lawyers, who were engaged by the wife to provide legal advice leading to the making of the binding financial agreement. On 7 November 2023 Ms Beller swore a further affidavit.
On 13 March 2023 when the matter was previously listed for final hearing, the Court was informed that Ms Beller was able to give evidence. The applicant opposed the Court granting leave to the respondent to rely on Ms Beller’s late-filed affidavit. Ms Beller’s file was not available and it was plain that it would not be available if the original hearing proceeded. Ultimately both parties sought that the trial be adjourned and I permitted a subpoena to issue for Ms Beller’s file.
On 6 November 2023 Ms Beller swore an affidavit which indicated that she was unwell.
On 8 November 2023 the Court granted leave to the respondent to issue a subpoena directed to Ms Beller, which required Ms Beller to attend at the hearing for the purpose of giving evidence. That subpoena was issued because the respondent indicated that notwithstanding the fact that Ms Beller had provided an affidavit, she did not intend to appear at the hearing. On that date I made an order that permitted Ms Beller to appear at the hearing via Microsoft Teams.
On 27 November 2023 Ms Beller swore an affidavit stating she was too unwell to attend the hearing. The affidavit was filed the following day.
At the commencement of the final hearing on 28 November 2023, counsel who appeared on behalf of the respondent made an oral application that a warrant issue to bring Ms Beller to the Court for the purpose of cross-examination. I heard that application on the day and dismissed it indicating I would give reasons in due course. These are my reasons.
Rule 6.41 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) (“the Rules”) permits the court to issue a warrant for arrest if it finds that a subpoena has not been complied with and if the court is satisfied that the subpoenaed person was served with the subpoena and given conduct money.
6.41 Failure to comply with subpoena
If:
(a) a person subpoenaed does not comply with a subpoena; and
(b) the court is satisfied that the person subpoenaed was served with the subpoena and given conduct money in compliance with rule 6.31;
the court may issue a warrant for the person’s arrest and order the person to pay any costs caused by the non‑compliance.
Note 1:A person who does not comply with a subpoena may be guilty of contempt (see section 112AP of the Family Law Act).
Note 2:A person does not need to comply with a subpoena if it was not served in compliance with rule 6.30 or the person serving the subpoena did not give the person subpoenaed conduct money in compliance with rule 6.31.
It must first be observed that the power to cause a warrant to issue is discretionary and there is no guidance in the rule itself as to how that discretion might be exercised – hence I proceed on the basis that the discretion is at large, albeit that it must be exercised judicially.
I was satisfied that the subpoena had been served and Ms Beller was aware of the hearing as I had, at her request, permitted her to appear electronically.
At effectively the eleventh hour, Ms Beller indicated (on oath) that she would not appear and could provide a medical certificate. This did not provide any real opportunity for the application for a warrant to be made earlier than the day of trial.
One option would have been to have the warrant issue and inform Ms Beller of its existence. However, Ms Beller had previously sworn an affidavit in which she indicated she was unwell and so further delay in the matter seemed to be an inevitable outcome of a warrant.
Because this matter had been before the court for so long and had previously been listed for final hearing and adjourned and because the hearing was listed for one day only, I could not be satisfied that, even if I had acceded to the application, then it would have been possible to hear and determine the matter on the day allocated.
I am conscious that s 67 of the Federal Circuit and Family Court of Australia Act 2021 (Cth) provides:
Overarching purpose of family law practice and procedure provisions
(1)The overarching purpose of the family law practice and procedure provisions is to facilitate the just resolution of disputes:
(a) according to law; and
(b) as quickly, inexpensively and efficiently as possible.
Note 1: See also paragraphs 5(a) and (b).
Note 2:The Federal Circuit and Family Court of Australia (Division 1) must give effect to principles in the Family Law Act 1975 when exercising jurisdiction in relation to proceedings under that Act.
(2)Without limiting subsection (1), the overarching purpose includes the following objectives:
(a)the just determination of all proceedings before the Federal Circuit and Family Court of Australia (Division 1);
(b)the efficient use of the judicial and administrative resources available for the purposes of the Court;
(c)the efficient disposal of the Court's overall caseload;
(d) the disposal of all proceedings in a timely manner;
(e)the resolution of disputes at a cost that is proportionate to the importance and complexity of the matters in dispute.
(3)The family law practice and procedure provisions must be interpreted and applied, and any power conferred or duty imposed by them (including the power to make Rules of Court) must be exercised or carried out, in the way that best promotes the overarching purpose.
(4)The family law practice and procedure provisions are the following, so far as they apply in relation to civil proceedings:
(a) the Rules of Court;
(b)any other provision made by or under this Act, or any other Act, with respect to the practice and procedure of the Federal Circuit and Family Court of Australia (Division 1).
Applying those principles to the facts of this case, I determined that the completion of the matter could not be further delayed.
The parties were on notice that if Ms Beller could not appear to give evidence then I proposed that the respondent not be permitted to rely on it. Counsel who appeared for the respondent quite properly foreshadowed an application to rely on the affidavit notwithstanding Ms Beller was not available for cross-examination and I indicated I would consider same.
Oral application to rely on the affidavit of Ms Beller notwithstanding she was not available for cross-examination
When I declined the application for a warrant to issue, counsel who appeared on behalf of the respondent requested, as foreshadowed, made an oral application that I permit the respondent to rely on Ms Beller’s affidavit notwithstanding that she was not available for cross‑examination. I declined that application and indicated that I would give reasons.
In a case where a party is seeking to rely on collateral information in order to rectify an agreement, the collateral information available to the instructing solicitors is theoretically central to the case. That would generally be documentary evidence. Ms Beller’s file, to the extent that it exists, has been made available.
It is a fundamental right of parties to litigation to:
(a)know the case they need to meet; and
(b)be able to challenge any evidence which is in dispute.
No party to family law proceedings enjoys a statutory right to cross-examine but each party has a right to a fair trial and, in the circumstances of this particular case, a fair trial would include the right to challenge Ms Beller’s evidence if it were admitted: Naparus v Frankham [2020] FamCAFC 32 at [17]–[21].
Where the evidence of Ms Beller is about the central issue in dispute (whether the parties had a common intention) – in fact, the only relevant factual issue in dispute between the parties – then an inability to challenge that evidence creates a prejudice which cannot otherwise be cured. In those circumstances I indicated it would be inappropriate for me to receive that affidavit because so little weight could be attached to it and the prejudice to the applicant would be too great.
The applicant opposed the receipt of the evidence without the opportunity to cross-examine and cited s 165 and s 135 of the Evidence Act 1995 (Cth). Dealing with the first of those bases – I accept that the evidence would be an out of court representation and hence hearsay. Section 165 has limited application since it applies, in the main, to the need to warn a jury of the potentially unreliable nature of, here, hearsay evidence.
The second basis was that the probative value of the evidence was substantially outweighed by the unfair prejudice to the applicant. This is important. Ms Beller swore an affidavit on 6 November 2023 which said:
10. My memory and assistance given the length of time ago in fairness to the court and the parties, would be extremely limited. The documents speak for themselves and I would not be able to provide any more information beyond what they contain.
11. My mental health is severely compromised and I suffer from anxiety, depression and post-traumatic stress. Being forced to be further involved will further compromise my health and I ask the court to excuse me from any further involvement in this matter. I can provide a medical certificate to the court to this effect.
Given those paragraphs, it is difficult not to accept that there would be unfair prejudice to the applicant such that would easily outweigh the limited probative value which could be attached to the untested evidence contained in Ms Beller’s affidavit of 6 March 2023 and the balance of the affidavit sworn on 6 November 2023.
Applying the authorities as they relate to the issue of unfair prejudice in a civil trial, I am comfortable that, taken in the context of the issues in this trial as a whole, the inability of the applicant to cross-examine the deponent would create substantial unfair prejudice. The application is one which asks the court to rectify an agreement which remedy could only be granted in the clearest and most compelling circumstances. In addition, as previously discussed, the weight that could be attached to the affidavit (without permitting cross-examination) was so insignificant that its exclusion was appropriate.
Primary application
It is significant that neither party sought that the Court set aside the financial agreement in whole or part. Each party sought that the Court honour the terms of the financial agreement as a binding financial agreement. The applicant wife says the agreement will, if rectified, include the clause she seeks to enforce. The respondent husband says rectification is not available and the application for enforcement should be dismissed.
It is necessary to understand a small amount of background to provide context to the dispute about the financial agreement and its terms.
The parties commenced living together when they married in 1998 and separated in November 2013 and their divorce was made final in early 2016.
At the conclusion of the parties’ relationship, they owned a property at N Street, Suburb O in their joint names, subject to a mortgage (“the Australian property”). According to the parties’ agreement the equity was $334,596.39. The husband owned a property at H Street, Town J, Country K said to be valued at $222,000 (“the Country K property”). The schedule to the agreement did not record an encumbrance (albeit clause 2(f) seemed to refer to one). The parties each had superannuation entitlements.
It is uncontroversial that on 18 March 2016 the solicitors who were acting for the husband indicated partial acceptance of a proposal made by the wife. It is important to set out the content from the email from the husband’s solicitors to Ms Beller dated 18 March 2016 in full:
Dear Sir,
We refer to your letter dated 4 March 2016. In relation to your clients' proposal for settlement we are instructed to respond as follows:
1.our client agrees to your client retaining the former marital home with the children and our client retaining the [Country K] property
2.Your client refinance the existing mortgage affecting the former marital home solely into her name within 60 days from the date of the consent order
3.Our client will continue to service the mortgage during the said period of 60 days,
4.Parties to sign all relevant documents including discharge authority and transfer to enable our clients share in the former marital property to be transferred to your client. Parties shall be responsible for the payment of all fees /costs in relation to this to their own solicitors
5. Our client agree to pay child support as assessed by the Child Support Agency
6. The furniture and chattels are divided equally between the parties
7. Each party retains their respective motor vehicles
8.There is a superannuation split to give effect to a 50/50 division of the superannuation,
If agreed please forward draft application for consent orders for our attention. Please note the above is subject to changes as may be instructed by our client.
Kind regards,
[Mr E]
Solicitor | [F Lawyers]
(As per the original)
The email dated 18 March 2016 was a response to correspondence from the wife’s lawyers which was dated the 4 March 2016 which read as follows:
Dear [Mr Gonsalves],
Re: [GONSALVES & GONSALVES]
We refer to our letter dated
Our client has advised that they wish to reach an agreement as to a division of the asset pool in a time and cost effective manner without resorting to litigation.
Background
We are instructed that you married [in] 1998 and divorced in 2008. You reconciled and later remarried in 2012. There are 2 children of the marriage. The children currently reside with the mother in the former martial home.
Asset pool
We are instructed that the asset pool of the relationship is as set out in the attached summary.
Contributions
We are instructed that you worked during the relationship. Our client was responsible for the home duties and care of the children of the relationship.
Future needs
We are instructed that both parties are in good health. You are working full time in stable employment. Our client is only employed casually.
Proposal for settlement
Given the contributions and needs of both parties, our client’s proposal for settlement is that she retains the former marital home with the children. That you retain the [Country K] property.
To give effect to such a division, our client proposes the following:
1.She retain the family home and refinance the mortgage solely into her name upon the children turning 18 years.
2.That agreement be reached that you continue to service the mortgage for the former martial home until the children turn 18. Or if that is not agreed that our client refinance the mortgage as soon as possible and you commence paying child support as assessed by the Child Support Agency.
3.The furniture and chattels are divided equally between the parties;
4.Each party retains their respective motor vehicles;
5.There is a superannuation split to give effect to a 50/50 division of the superannuation.
Provided you agree with the above proposal, we propose documenting the agreement in consent orders to be drafted, signed by both parties and filed with the court.
We enclose the Family Court publications: ‘Before you file – pre-action procedure for financial cases’ which we are required to provide you in accordance with the Family Law Rules 2004. We also enclose the duty of disclosure brochure for your information.
We would appreciate a response to this letter from you or your solicitor within 14 days of receipt. If we do not receive a response within the specified time, we have instructions to file an application with the court on our client’s behalf seeking orders in the terms of the above proposal.
Yours faithfully,
[Ms Beller]
Principal Solicitor
(As per the original)
The solicitors’ correspondence referred to proposed consent orders and not a financial agreement. The evidence does not address how it came to be that the vehicle of a financial agreement was chosen. The husband’s agreement to the wife’s proposed terms (with amendment) was expressed to be conditional upon there not be subsequent changed instructions. To the extent that the correspondence from the wife’s solicitor referred to an asset pool and “attached summary”, that document was not in evidence.
There is no correspondence between the respective firms in evidence for the period between March 2016 and May 2016 and I do not understand from the wife’s affidavit material that there was any correspondence during this period.
I accept that there was correspondence between the wife and her lawyer via text message. I accept that the wife understood that she would receive either 50 per cent of the husband’s superannuation or 50 per cent of the parties’ collective superannuation. That much is clear from her communication with her own lawyer both before and after the signing of the financial agreement.
A financial agreement was drafted by the solicitors acting for the wife and forwarded to the solicitors acting for the husband on 26 May 2016. That email enclosing the draft financial agreement said “[w]e understand that your client has ceased paying towards the mortgage and we are keen to finalise this as soon as possible”. The following day the husband’s lawyers wrote to the wife’s lawyers indicating that the agreement required amendment in two respects neither of which are material to this trial.
Those amendments were made. A copy of the financial agreement was executed by the husband on 1 June 2016 and forwarded to the wife’s lawyers on or about 2 June 2016. The wife then executed the agreement on 8 June 2016. The two amendments which the husband’s lawyers sought by email dated 27 May 2016 related to the parties having divorced and the husband retaining property in Country K.
Turning then to the terms of the financial agreement itself; the agreement implemented the parties’ apparent consensus as reflected in the letters 4 March 2016 and 18 March 2016 in so far as:
(a)The wife retained the Australian property and refinanced the mortgage; and
(b)The husband retained the Country K property.
There was a schedule of assets and liabilities attached to the financial agreement. That schedule of assets and liabilities referred to both the Country K property and the Australian property and the mortgage against the Australian property. The schedule of assets and liabilities did not refer to either parties’ superannuation entitlements.
The parties implemented the clauses of the agreement which related to the Australian property such that the property was transferred into the name of the wife and the joint mortgage was discharged.
The clauses which dealt with superannuation need to be set out in their entirety as these are the clauses which create the controversy as between the applicant and respondent:
4. Superannuation
(a) The husband is a member of the [G Company] superannuation fund (the fund), member number […].
(b) The balance of their interest in the fund as at 25/05/16 was $
(c) In accordance with S90MJ(1)(c)(i) of the Act, the base amount specified in respect of the non-member spouse’s interest in the fund is $
(d) No agreement between the parties in relation to superannuation has been terminated or set aside, and no orders have been made, or agreements executed by the parties relating to the superannuation.
(e) Having been accorded procedural fairness, this superannuation agreement binds the trustee of the fund.
(f) The operative time for this payment split is the beginning of the fourth business days after the date of service of the agreement on the trustee of the fund. [Note the requirements of section 90MI which sets out the documents to accompany the agreement when served on the trustee].
(g) In accordance with S90MJ(2) of the Act, the non-member spouse is entitled using the base amount set out in clause (d), to the amount calculated in accordance with Part 6 of the Family Law (Superannuation) Regulations 2001 and the husband’s entitlement in the fund, is correspondingly reduced.
(h) Within 14 days of becoming entitled to receive a superannuation benefit from the fund, the wife will give the trustees of the fund all such forms and related information as necessary to enable it to determine the nature and quantum of their superannuation entitlement.
(i) Until such time as the superannuation split to the wife pursuant to this agreement can be rolled over into a separate account to the wife.
(i) The husband will give to the wife written notice not less than 28 days before such time as they elect to retire from and/or take voluntary retirement and/or for any reason accept or become entitled to access in while of in part their entitlement in the fund.
(ii) The husband will direct and authorise the trustee the fund to communicate with the wife and/or any person authorised by them in writing:
(1)To answer any reasonable inquiries as may be made by them or on their behalf from time to time regarding their entitlement in the fund; and
(2)To give to the wife and/or their authorised representative a copy of any notice of any application of request by the husband which seeks release of entitlements in the fund in so far as that release may effect the wife’s entitlement in the fund pursuant to this agreement.
(iii) The husband, their servants and/or agents be and are hereby restrained from doing any act or thing which would prevent the wife, their heirs, executors, administrators or nominees from receiving the benefits in the fund to which they are entitled pursuant to this agreement.
(j) Within 14 days after service by the trustees of the payment split notice pursuant to Regulation 7A.03 of the Superannuation Industry (Supervision) Regulations 1994, the husband will do all such acts and things and sign all such documents as may be necessary, including but not limited to:
(i)Exercising their request pursuant to regulation 7A.06 of the Superannuation Industry (Supervision) Regulations 1994, for the rollover or transfer of the transferable benefits from the fund to the wife’s new superannuation fund; and
(ii) Rollover or transfer the wife’s interest in the fund to the wife’s new superannuation fund.
(k) The husband is a member of [Superannuation Fund 2] (the fund), member number […].
(l) The balance of their interest in the fund as at 25/05/2016 was $
(m) In accordance with S90MJ(1)(c)(i) of the Act, the base amount specified in respect of the non-member spouse’s interest in the fund is $
(n) No agreement between the parties in relation to superannuation has been terminated or set aside, and no orders have been made, or agreements executed by the parties relating to the superannuation.
(o) Having been accorded procedural fairness, this superannuation agreement binds the trustee of the fund.
(p) The operative time for this payment split is the beginning of the fourth business days after the date of service of the agreement on the trustee of the fund. [Note the requirements of section 90MI which sets out the documents to accompany the agreement when served on the trustee].
(q) In accordance with S90MJ(2) of the Act, the non-member spouse is entitled using the base amount set out in clause (d), to the amount calculated in accordance with Part 6 of the Family Law (Superannuation) Regulations 2001 and the husband’s entitlement in the fund, is correspondingly reduced.
(r) Within 14 days of becoming entitled to receive a superannuation benefit from the fund, the wife will give the trustees of the fund all such forms and related information as necessary to enable it to determine the nature and quantum of their superannuation entitlement.
(s) Until such time as the superannuation split to the wife pursuant to this agreement can be rolled over into a separate account to the wife.
(i) The husband will give to the wife written notice not less than 28 days before such time as they elect to retire from and/or take voluntary retirement and/or for any reason accept or become entitled to access in whole or in part their entitlement in the fund.
(ii) The husband will direct and authorise the trustee the fund to communicate with the wife and/or any person authorised by them in writing:
(1)To answer any reasonable inquiries as may be made by them or on their behalf from time to time regarding their entitlement in the fund; and
(2)To give to the wife and/or their authorised representative a copy of any notice of any application or request by the husband which seeks release of entitlements in the fund in so far as that release may effect the wife’s entitlement in the fund pursuant to this agreement.
(iii) The husband, their servants and/or agents be and are hereby restrained from doing any act or thing which would prevent the wife, their heirs, executors, administrators or nominees from receiving the benefits in the fund to which they are entitled pursuant to this agreement.
(t)Within 14 days after service by the trustees of the payment split notice pursuant to Regulation 7A.03 of the Superannuation Industry (Supervision) Regulations 1994, the husband will do all such acts and things and sign all such documents as may be necessary, including but not limited to:
(i) Exercising their request pursuant to Regulation 7A.06 of the Superannuation Industry (Supervision) Regulations 1994, for the rollover or transfer of transferable benefits from the fund to the wife’s new superannuation fund; and
(ii)Rollover or transfer the wife’s interest in the fund to the wife’s new superannuation fund.
(As per the original)
As is apparent from the above, to the extent that the financial agreement referred to superannuation, it did not indicate a balance at clause 4(b) in respect of the husband’s superannuation interest with G Company. It did not include at 4(c) a base amount to be paid to the non-member spouse. The financial agreement goes on to refer at 4(k) to the husband being a member of Superannuation Fund 2. It was not controversial at trial that “Superannuation Fund 2” stands for the L Trust and is not a superannuation fund per se. In any event, at 4(l) the balance of the husband’s interest in that fund was left blank as was a base amount at 4(m).
There is no reference to any superannuation entitlements of the wife either in the financial agreement’s operative clauses or the schedule of assets and liabilities.
The wife says that this financial agreement should be read having regard to the correspondence of 4 and 18 March 2016. If read with reference to the correspondence, the wife submits it would require the rectification of clauses 4(b) and 4(c) so that the husband’s superannuation is split such that she receives an amount which would mean that the parties’ superannuation entitlements were divided equally.
It is not suggested that this reading arises from the plain words of the financial agreement but rather from the collateral documents, being the solicitors’ March 2016 correspondence.
In effect what the wife is seeking is that I make orders the effect of which is to rectify the agreement. There are a number of difficulties with this proposal.
The first difficulty is that by including in the financial agreement a clause which refers to a unstated base amount of the husband’s superannuation entitlements, another clause (also blank as to value) which erroneously refers to an entitlement of the husband in the event of redundancy – which could not on any view have been the subject of a split and by failing to mention any entitlements of the wife the unfinished agreement is capable of multiple different interpretations:
(a)Was the clause about the husband’s superannuation left blank because everyone knew it would later be amended? – the wife’s position;
(b)Was it left blank because no amount was to be allocated to the wife? – the husband’s position;
(c)Was it left blank because nobody knew the figures to insert?; or
(d)Was it left blank and nobody noticed?
In Birdwood & Gravino (2023) FLC 94-149, his Honour Aldridge J sitting in the appellate jurisdiction of the Federal Circuit and Family Court of Australia (Division 1) heard and determined an appeal from a decision of a judge of the Federal Circuit and Family Court of Australia (Division 2) which purported to rectify a binding financial agreement by dividing the proceeds of sale of a property such that the appellant received 25 per cent and the respondent 75 per cent, where the original term in the agreement provided that the proceeds were to be divided equally.
His Honour at [2] of his reasons for judgment said “although it was not raised by the parties I have concerns as to whether rectification is available at all to correct binding financial agreements”.
At [6] of his Honour’s reasons for judgment, his Honour said:
6.In terms, s 90KA applies when there is a question as to whether a binding financial agreement is valid, enforceable or effective. None of those immediately encompasses rectification, unless the rectification is necessary to save such an agreement from invalidity (rectification can be available where there is a doubt that there is a contract at all (Sindel v Georgiou (1984) 145 CLR 661)). However, that rectification is a remedy the High Court might grant, and there question of whether all of the powers of the high court in relation to contracts are picked up or only those that relate to the validity, effect and enforcement of contracts. I inclined to the latter as that is what s 90KA clearly states.
At [11] and [12] of the reasons for judgment his Honour said:
11.There is a further and, perhaps, more important difficulty which arises from s 90G of the Act. A financial agreement is only binding where each party has received the advice set out in s 90G(1)(b) and written statements to that effect are provided from each practitioner (s 90G(1)(c) and s 90G(1)(ca)).
12. The effect of rectification is to amend the terms of a document to accord with the actual intention of the parties. Thus, rectification changes the binding financial agreement to accord with the intention it has failed to record. Yet, the requisite advice and certificate was based on the original and unrectified version. There would be no advice and certificate on the binding financial agreement as rectified which is a precondition to its enforceability.
In the specific context of this particular financial agreement, the agreement did not contain any indication of the value of any superannuation entitlements in the name of either the husband or the wife and there is no evidence which demonstrates that, at the time at which the parties signed the agreement, either party was aware of the value of his or her own entitlements or the entitlements of the other party. The wife confirmed in cross-examination that she was not aware of the entitlements of the other party. Accordingly in the circumstances in this case it is not possible that the solicitors who provided their certificates of legal advice provided their advice on the agreement as rectified because they would not have been in a position to offer that advice absent knowledge of the value of the superannuation entitlements.
Next the husband, for his part, says that there was no agreement to split the superannuation. Seemingly there was on the face of it apparently an offer and a conditional acceptance of that offer on 18 March 2016. The husband relies on a sentence in that letter which reads “if agreed please forward draft application for consent orders to our attention. Please note that the above is subject to changes as may be instructed by our client”. The husband said his instructions to his lawyers changed.
In order to rectify the agreement in the manner that the wife seeks, it would be necessary that there be clear and convincing proof that the agreement as signed does not record the common intention. Further, it would be necessary to demonstrate that the common intention existed at the time of the agreement.
In Maralinga Pty Ltd v Major Enterprises Pty Ltd (1973) 128 CLR 336, Mason J said at 349-50:
The conditions according to which relief by way of rectification will be granted have been variously stated. In Fowler v. Fowler, Lord Chelmsford L.C. said that the person seeking rectification must establish clearly “that the alleged intention to which he desires” [the instrument] “to be made conformable continued concurrently in the minds of all parties down to the time of its execution, and also must be able to shew exactly and precisely the form to which the deed ought to be brought”. On other occasions statements have been made which emphasize that it is for the plaintiff to show that by the writing sought to be rectified the parties intended to record the terms of an antecedent oral bargain and that by common mistake there is a disconformity between the oral bargain and the writing (United States of America v. Motor Trucks Ltd. per Earl of Birkenhead). The difference in expression is not of importance. It is explained partly by the difference in the character of written instruments sought to be rectified and partly by the more recent desire to emphasize that the remedy is designed to relieve against the mistaken expression of the true agreement of the parties.
…
What is of importance is that the purpose of the remedy is to make the instrument conform to the true agreement of the parties where the writing by common mistake fails to express that agreement accurately. And there has been a firm insistence on the requirement that the mistake as to the writing must be common to the parties and not merely unilateral, except in cases of a special class to which I shall later refer.
(Footnotes omitted)
In Graham & Squibb (2019) FLC 93-892, the Full Court of the Family Court of Australia (as it then was) heard and determined an appeal against orders of the trial judge made to rectify a financial agreement which had erroneously referred to the wrong section of the Act and mistakenly referred to exclusive jurisdiction of Victorian law in Victorian courts. The terms of the agreement itself – that is, the manner in which the agreement purported to deal with the property interests of the parties to the agreement – were not in issue. The Full court cited authority concerning the manner in which a party seeking rectification must prove his or her case at [43]:
A written contract is presumed to correctly record the agreement of the parties to it and, in order to displace that presumption, a party seeking rectification of the contract must advance “clear and convincing proof” it does not embody the final intention of the parties (see Commissioner of Stamp Duties (NSW) v Carlenka Pty Ltd (1995) 41 NSWLR 329 at 345; Pukallus v Cameron (1982) 180 CLR 447 at 452, 456 (“Pukallus”); Maralinga Pty Ltd v Major Enterprises Pty Ltd (1973) 128 CLR 336 at 350). For that purpose, the parties’ mutual intention is the relevant feature of the evidence, as there is no room for rectification of the contract if the contrary intention is not shared (see Franklins Pty Ltd v Metcash Trading Ltd (2009) 76 NSWLR 603 at 710; Ryledar Pty Ltd v Euphoric Pty Ltd (2007) 69 NSWLR 603 at 655, 660). The parties did not contest the correctness of those principles. Rather, their dispute concerned the application of the principles to the evidence adduced.
Since the inclusion of Pt VIIIA in the Act in 2000, successful applications for an agreement be to be rectified have been almost exclusively concerned with what have been termed “technical” non-compliance such as errors in the reference to the section of the Act under which the agreement is concluded.
In Senior & Anderson (2011) FLC 93-470 Strickland J (with whom Murphy J agreed (in part)) agreed with the submission that there were limitations in the application of rectification of a financial agreement as a remedy:
138. I do not consider that rectification is available to a court so as to “correct” non‑compliance with any or all of the requirements of s 90G. Those requirements do not pertain to matters of agreement as between the parties in respect of which clear intention can sound in rectification.
139.Rather, I agree with the submissions of the wife that those requirements are in the nature of a jurisdictional fact, compliance with which determines whether or not the court has power to make orders pursuant to Part VIII of the Act. Those requirements are in a quite distinct category from those which pertain to the formation or validity of an agreement as a financial agreement.
…
143. Underpinning his Honour’s application of the Act appears to be the assumption that it serves to “cure” relevant errors so as to make the agreement binding when otherwise those errors would have been fatal to that. I disagree. The amendments to the Act do not permit rectification of error in the requirements of s 90G(1) in the way that there can be rectification of error in an agreement according to the principles of law and equity. Rather, the amendments permit the application of s 90(1A) where certain conditions are satisfied, such as:
(a) one or more or the requirements of s 90G(1) are not satisfied; and
(b) the court is satisfied that it would be unjust and inequitable if the agreement was not binding.
Further, the remedy is not rectification, but rather the remedy is statutory. In other words, an agreement becomes “binding” despite its deficiencies.
Here, the wife’s application requires more than the application of the provisions of s 90G of the Act since, in order to give effect to what the applicant asserts was the common intention, the Court would effectively require the Court to draft the missing operative clauses. To do so would require unambiguous terms of the parties’ agreement contemporaneous with their signing of the financial agreement.
I accept that in Chartbrook Ltd v Persimmon Homes Ltd [2009] AC 1101 the House of Lords said at [25]:
What is clear from these cases is that there is not, so to speak, a limit to the amount of red ink or verbal rearrangement or correction which the court is allowed. All that is required is that it should be clear that something has gone wrong with the language and that it should be clear what a reasonable person would have understood the parties to have meant. In my opinion, both of these requirements are satisfied.
I take it from those observations that the extent of the rectification itself is not the bar. Rather, extensive repair may be permitted if the errors or omissions are uncontroversial and the language necessary to implement the parties’ agreement is clear and unequivocal.
Their Honours Gageler, Nettle and Gordon JJ in Simic v New South Wales Land and Housing Corporation (2016) 260 CLR 85 said:
103.Rectification is an equitable remedy, the purpose of which is to make a written instrument “conform to the true agreement of the parties where the writing by common mistake fails to express that agreement accurately”. For relief by rectification, it must be demonstrated that, at the time of the execution of the written instrument sought to be rectified, there was an “agreement” between the parties in the sense that the parties had a “common intention”, and that the written instrument was to conform to that agreement. Critically, it must also be demonstrated that the written instrument does not reflect the “agreement” because of a common mistake. Unless those elements are established, the “hypothesis arising from execution of the written instrument, namely, that it is the true agreement of the parties” cannot be displaced.
104. The issue may be approached by asking – what was the actual or true common intention of the parties? There is no requirement for communication of that common intention by express statement, but it must at least be the parties' actual intentions, viewed objectively from their words or actions, and must be correspondingly held by each party.
(Footnotes omitted)
At the time of the signing of the financial agreement the husband was represented by Mr E, solicitor. Mr E’s file was subpoenaed in these proceedings and documents were produced in answer to the subpoena. Leave was granted to the parties to inspect documents produced on subpoena by Mr E for the period between 18 March 2016 and the date of the financial agreement. I was told that a very small number of documents were produced which fell in that category the husband did not tender in his case any document from Mr E which supported receipt of those instructions. The explanation for that is either:
(a)There is no file note because Mr E did not take one; or
(b)The husband did not provide those instructions.
It is difficult to know which is the case.
The wife says that the absence of any documents to support those instructions having been given ought be taken as an indication that those instructions were not given and that the husband adhered to instructions provided on 18 March 2016.
Further the wife submitted that when the draft agreement was sent to Mr E, he sought that it be amended (and it was) but evidently made no comment about the clauses which related to superannuation. The wife asks that Mr E’s silence on these clauses be read as affirmation of the earlier proposal for equal division of superannuation.
It is incredibly curious that both lawyers allowed both parties to execute a financial agreement which left clauses of the agreement blank. It is extraordinary that the solicitors permitted that to occur without any references to why those sections were left blank if those sections were intended to be operative and enforceable in the future.
The evidence of the wife that Ms Beller told her that they could be filled in later was unchallenged – but Ms Beller’s representation does not bind the husband.
Commencing on 30 May 2017 (nearly a year after the agreement was signed), the wife’s solicitors communicated with the husband’s solicitors referring to “the financial agreement that was entered into on 8 June 2016 and confirm that a [s]uperannuation split was an outstanding issue per [i]tem 4 of the agreement.” When the husband’s new solicitors engaged with the wife’s solicitors in respect of the issue, it became plain that the husband did not accept that was a valid and binding agreement dealing with superannuation.
The husband’s original solicitor, Mr E was a party to these proceedings having been joined by the wife on 24 August 2020. The wife voluntarily discontinued her proceedings as against Mr E on 3 August 2021. The wife does not address the discontinuance as against him in her material.
It was for the wife to satisfy me, through admissible evidence, that there was a common intention expressed in sufficiently clear terms at the requisite time before rectification of the agreement was available as a remedy. As set out above, I cannot be so satisfied and the application will be dismissed.
Even if I had been satisfied, I did not have before me any evidence to demonstrate that the Trustee of the husband’s superannuation fund had been afforded procedural fairness.
The wife’s Third Further Initiating Application contained an application that:
14. An order that should the final performance of the agreement be frustrated by the husband’s unconscionable conduct in withdrawing funds from the superannuation fund a s79 order to the extent that the agreement does not deal with all of the property.
This appears to be alternate relief to the application for rectification but absent evidence about the matters which would allow the Court to make a s 79 order and, absent any submissions in support, I have treated that prayer as abandoned.
This case has a long and difficult history. I accept that the wife has established that she at all times believed that she had a concluded agreement which provided for an equal division of superannuation entitlements. The fact that her lawyer had witnessed the agreement and provided the certificate of legal advice when the clauses were left blank led to the application that her solicitor be joined.
The wife settled her proceedings with Ms Beller and discontinued them as against Mr E. Ms Beller and the wife entered into a Deed by which the wife was paid $30,000 (said to be inclusive of costs). Assuming the wife’s case to be that she was entitled to be receive half the superannuation entitlements of the parties she says the figure which should have appeared in the agreement is $55,757. The wife acknowledges receipt of $30,000 from Ms Beller. The wife says she was required to meet her legal fees from the $30,000 but that is not a matter which would, even if the wife had made out a case for rectification, be appropriate to visit on the husband. So, the amount the wife now says she is out of pocket seven and a half years later is $25,757.
The parties filed costs notices in these proceedings. The wife’s costs notice (Exhibit 3) provided the following information about her costs: she has paid $21,134.98. She had incurred total costs of $60,883 prior to the hearing and it was anticipated that her total costs would be $97,697.98. Given the scope of the dispute those figures are lacking in any sense of commerciality. Even if the wife had been successful on her application for rectification she would have received a superannuation split the value of which was a fraction of those costs.
I certify that the preceding ninety-nine (99) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Christie.
Associate:
Dated: 13 December 2023
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