Hadden and Pendle
[2017] FCCA 1610
•11 July 2017
FEDERAL CIRCUIT COURT OF AUSTRALIA
| HADDEN & PENDLE | [2017] FCCA 1610 |
| Catchwords: FAMILY LAW – Property – a prenuptial agreement between the parties – whether a financial agreement – whether it should be set aside – whether it is binding under the Act. |
| Legislation: Family Law Act 1975, ss.90B, 90G, 90K, 90KA |
| Cases cited: Kostres v Kostres (2009) FLC 93-420 Gaskell v Denkas Butchery Services Pty Ltd (2008) NSWCA 35 |
| Applicant: | MS HADDEN |
| Respondent: | MR PENDLE |
| File Number: | SYC 3338 of 2014 |
| Judgment of: | Judge Kemp |
| Hearing dates: | 27, 28, 29 & 30 June 2016 |
| Date of Last Submission: | 24 February 2017 |
| Delivered at: | Sydney |
| Delivered on: | 11 July 2017 |
REPRESENTATION
| Counsel for the Applicant: | Mr Santisi |
| Solicitors for the Applicant: | Goh Lawyers |
| Counsel for the Respondent: | Ms Christie |
| Solicitors for the Respondent: | Sarah Bevan Family Lawyers |
THE COURT DECLARES THAT:
The agreement between the husband and the wife, as set out in the document dated 21 July 2011, is a financial agreement between the parties for the purpose of s.90B of the Family Law Act 1975 (“the Act”), but is not binding pursuant to the provisions of s.90G of the Act.
THE COURT ORDERS THAT:
The matter be listed for further directions on 13 October 2017 at 9:30am in respect of the wife’s property application, pursuant to s 79 of the Act.
IT IS NOTED that publication of this judgment under the pseudonym Hadden & Pendle is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT SYDNEY |
SYC 3338 of 2014
| MS HADDEN |
Applicant
And
| MR PENDLE |
Respondent
REASONS FOR JUDGMENT
Introduction
This is an application by Ms Hadden (“the wife”) filed on 2 June 2014, seeking to set aside a financial agreement between Mr Pendle (“the husband”) and the wife, as set out in a document dated 21 July 2011 (“the subject document”) (Exhibit “4” as the original and Exhibit “Court 1”, being a copy thereof), pursuant to the provisions s.90K(1)(b), (d) or (e) of the Family Law Act 1975 (“the Act”). An additional ground under s.90K(1)(a) of the Act was added during the course of the hearing and the parties’ submissions.
The wife also seeks orders pursuant to s.90K(3) of the Act or, in the alternative, pursuant to s.79 of the Act in relation to property matters.
The husband, in turn, sought orders, as referred to in his response filed 9 October 2014, to the following effect:
(1)That the Initiating Application filed 2 June 2014 be dismissed.
(2)That the wife pay the husband’s costs of and incidental to these proceedings.
The Court accepts that the husband bears an onus, at least on a prima facie basis, of establishing that the subject document is a financial agreement between the parties and, further, that such an agreement is binding pursuant to the provisions of s.90G of the Act: Hoult & Hoult [2013] FamCAFC 109.
If the Court determines that there was a financial agreement between the parties, the Court accepts that the onus shifts to the wife in seeking to set aside such an agreement. If she is successful, in that regard, she could then seek the various other property orders, as set out in her initiating application. That last matter is not, however, before the Court for determination at this point in time.
The Court, further, accepts that if the subject document was a financial agreement, for it to be binding between the parties, so as to oust the jurisdiction of this Court, the matters contained in s.90G(1) (a)-(d) of the Act must be satisfied.
The wife relies, subject to all proper claims as to admissibility, and after formal objections were taken, on the following:
a)Her affidavit re-affirmed on 27 June 2016 and filed in Court on that day; and
b)Her correcting affidavit affirmed on 26 June 2016 and filed in Court on 27 June 2016.
The wife’s trial affidavit in English was affirmed on 31 May 2016 (filed late on 6 June 2016) and was witnessed by her solicitor, Ms L (“Ms L”), on 31 May 2016 at a time when Ms L was in Australia and the wife was in (country omitted). The wife, initially, said that she had met Ms L at a restaurant in a shopping mall in (country omitted) and that she had met her on three occasions at the same restaurant. The wife said that Ms L had read the affidavit to her in English and when she had not understood something, Ms L then translated that into (language omitted). The affidavit had been emailed to her and the wife had printed out a copy. Ms L’s evidence was, to the effect, that she had read the document out in English and then translated it to her client in (language omitted) and that the wife had then signed the original document “in her presence” via a LINE computer application. Ms L says that she saw her client’s face and saw her client sign the said document. It was in those circumstances that she, then subsequently, witnessed the document by signing her signature as a witness and providing her qualification as “lawyer”, but without the provision of the appropriate jurat for the translation/interpretation of the document. Ms L was not authorised to witness the document, being an affidavit, signed in (country omitted), as she acknowledged she was not a Justice of the Peace or lawyer registered there, so as to be authorised to do so. Notwithstanding the difficulties with this process and whether it strictly complied with the Federal Circuit Court of Australia Act 1999 and the Federal Circuit Court Rules 2001 for the swearing/affirming of affidavits overseas, the issue was, practically, remedied by the wife re-affirming the affidavit in Sydney (noting that she had a correcting affidavit dealing with paragraphs 42, 47 and 51 of her trial affidavit), and then going into the witness box and, after having the document interpreted by the Court appointed interpreter (see paragraph 14 below), adopting the same. Similarly, the wife had the same Court appointed interpreter translate and interpret the contents of her correcting affidavit, affirmed on 26 June 2016 before Ms L in person, when both were present in Australia.
The husband relies, subject to all proper claims as to admissibility, and after formal objections were taken, on the following:
a)His affidavit sworn and filed on 23 May 2016 (paragraphs 1-6, 9-20 37-38, 47-54 and 58-60); and
b)The affidavit of Ms T (“the husband’s sister”) sworn and filed on 24 May 2016.
On 30 June 2016, the Court directed the parties to file their written submissions as follows:
a)The wife on or prior to 29 August 2016;
b)The husband on or prior to 23 September 2016; and
c)The wife in reply on or before 7 October 2016.
The parties agreed, and the Court consented, to an extension of time for submissions for a further 3 weeks, as the wife’s lawyer had been involved in a criminal trial originally scheduled for 3 weeks but extended to 8 weeks. The parties’ submissions were, however, ultimately received as follows:
a)The wife on 6 October 2016;
b)The husband on 2 November 2016; and
c)The wife in reply on 22 February 2017.
The following documents were tendered as exhibits in the proceedings:
Exhibit No
Document
Tendered by
A
Document with the name “(omitted)” and the (language omitted) characters described by the wife as the person who assisted her translate the English document, which is now Exhibit “E1”
W
B
Pages 1 and 2 (omitted)
W
C
Letter from Webb Thom & Associates (“Webb Thom”) dated 29 June 2011 together with draft Cohabitation and Separation Agreement document
W
D
Undated Prenuptial Agreement document (15 pages) signed by the husband and witnessed by Ms Arthur (“Ms Arthur”) (bearing original signatures)
W
E1
Email from the husband to the wife dated 15 February 2012 being a marriage separation notice together with the English attachment in response by the wife to the husband under her email of 7 March 2012 (replacing Annexure “E” to the husband’s affidavit, which was not a complete copy of the document)
W
F
Webb Thom Memorandum of Costs dated 13 July 2011
W
G
Letter from Sarah Bevan Lawyers to GOH Lawyers dated 15 June 2016
W
1
Email from the wife to the husband dated 27 February 2011 and 3 further pages of email exchange between the parties
H
2
Affidavit of the wife affirmed on 24 May 2014 and filed on 2 June 2014 witnessed by Ms L when both she and the wife were in (country omitted) but not disclosing the location of affirmation, nor providing a translation certificate
H
3
Documents produced by Mr O under subpoena addressed to that firm issued on 20 October 2014
H
4
Original agreement (described as Prenuptial Agreement) dated 21 July 2011 signed by the husband and the wife with a certificate of Ms Arthur and a Certificate of Mr D (“Mr D”) attached
H
5
Two (2) page document with (language omitted) characters together with coversheet in both English and (language omitted) being the original notes which form the basis of the English translation of Exhibit “E1”
H
6
Letter from Webb Thom to the husband dated 13 July 2011
H
Court 1
Document, being a copy of Exhibit “4”
Court
Both parties were represented by counsel; the wife by Mr Santisi and the husband by Ms Christie.
During the course of the hearing, the wife was provided with the assistance of an interpreter in the (language omitted) language ((language omitted) dialect), being Mr M (“Mr M”).
The law
Sections 71A, 90B, 90G, 90K and 90KA of the Act are relevant and are as set out in the paragraphs below.
Section 71A – This Part [Part VIII] does not apply to certain matters covered by binding financial agreements
(1)This Part does not apply to:
(a)financial matters to which a financial agreement that is binding on the parties to the agreement applies; or
(b)financial resources to which a financial agreement that is binding on the parties to the agreement applies.
(2)Subsection (1) does not apply in relation to proceedings of a kind referred to in paragraph (caa) or (cb) of the definition of matrimonial cause in subsection 4(1).
Section 90B – Financial agreements before marriage
(1)If:
(a)people who are contemplating entering into a marriage with each other 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 people are not the spouse parties to any other binding agreement (whether made under this section or section 90C or 90D) 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 people 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, in the event of the breakdown of the marriage, all or any of the property or financial resources of either or both of the spouse parties at the time when the agreement is made, or at a later time and before divorce, is to be dealt with;
(b)the maintenance of either of the spouse parties:
(i)during the marriage; or
(ii)after divorce; or
(iii)both during the marriage and after divorce.
(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 – 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 90K – Circumstances in which court may set aside a financial agreement or termination agreement
(1)A court may make an order setting aside a financial agreement or a termination agreement if, and only if, the court is satisfied that:
(a)the agreement was obtained by fraud (including non-disclosure of a material matter); or
(aa) a party to the agreement entered into the agreement:
(i)for the purpose, or for purposes that included the purpose, of defrauding or defeating a creditor or creditors of the party; or
(ii)with reckless disregard of the interests of a creditor or creditors of the party; or
(ab) a party (the agreement party) to the agreement entered into the agreement:
(i) for the purpose, or for purposes that included the purpose, of defrauding another person who is a party to a de facto relationship with a spouse party; or
(ii)for the purpose, or for purposes that included the purpose, of defeating the interests of that other person in relation to any possible or pending application for an order under section 90SM, or a declaration under section 90SL, in relation to the de facto relationship; or
(iii)with reckless disregard of those interests of that other person; or
(b) the agreement is void, voidable or unenforceable; or
(c) in the circumstances that have arisen since the agreement was made it is impracticable for the agreement or a part of the agreement to be carried out; or
(d)since the making of the agreement, a material change in circumstances has occurred (being circumstances relating to the care, welfare and development of a child of the marriage) and, as a result of the change, the child or, if the applicant has caring responsibility for the child (as defined in subsection (2)), a party to the agreement will suffer hardship if the court does not set the agreement aside; or
(e)in respect of the making of a financial agreement--a party to the agreement engaged in conduct that was, in all the circumstances, unconscionable; or
(f)a payment flag is operating under Part VIIIB on a superannuation interest covered by the agreement and there is no reasonable likelihood that the operation of the flag will be terminated by a flag lifting agreement under that Part; or
(g)the agreement covers at least one superannuation interest that is an unsplittable interest for the purposes of Part VIIIB.
(1A)For the purposes of paragraph (1)(aa), creditor , in relation to a party to the agreement, includes a person who could reasonably have been foreseen by the party as being reasonably likely to become a creditor of the party.
(2)For the purposes of paragraph (1)(d), a person has caring responsibility for a child if:
(a)the person is a parent of the child with whom the child lives; or
(b)a parenting order provides that:
(i)the child is to live with the person; or
(ii)the person has parental responsibility for the child.
(3)A court may, on an application by a person who was a party to the financial agreement that has been set aside, or by any other interested person, make such order or orders (including an order for the transfer of property) as it considers just and equitable for the purpose of preserving or adjusting the rights of persons who were parties to that financial agreement and any other interested persons.
(4)An order under subsection (1) or (3) may, after the death of a party to the proceedings in which the order was made, be enforced on behalf of, or against, as the case may be, the estate of the deceased party.
(5)If a party to proceedings under this section dies before the proceedings are completed:
(a)the proceedings may be continued by or against, as the case may be, the legal personal representative of the deceased party and the applicable Rules of Court may make provision in relation to the substitution of the legal personal representative as a party to the proceedings; and
(b)if the court is of the opinion:
(i)that it would have exercised its powers under this section if the deceased party had not died; and
(ii)that it is still appropriate to exercise those powers;
the court may make any order that it could have made under subsection (1) or (3); and
(c)an order under paragraph (b) may be enforced on behalf of, or against, as the case may be, the estate of the deceased party.
(6)The court must not make an order under this section if the order would:
(a)result in the acquisition of property from a person otherwise than on just terms; and
(b)be invalid because of paragraph 51(xxxi) of the Constitution.
(7)For this purpose, acquisition of property and just terms have the same meanings as in paragraph 51(xxxi) of the Constitution.
Section 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.
Legal principles
The Court’s power to set aside a s.90B financial agreement is found in s.90K of the Act.
The Court accepts that proof of the existence of a matter in s.90K of the Act does not, of itself, lead to the automatic setting aside of a financial agreement, since that provision is a discretionary one, noting that the section uses the expression "may": Kostres v Kostres (2009) FLC 93-420.
In Saintclaire & Saintclaire [2013] FamCA 491, Ryan J suggested that the following questions provided the appropriate pathway in a case such as this:
1. Is there a financial agreement?
2. If the answer is affirmative, should that agreement be set aside?
3. If the answer is negative, is the agreement binding?
The Act draws a distinction between agreements which are financial agreements (s.4, s.90B, s.90C and s.90D) and agreements which are binding financial agreements (s.90G) (see paragraph 74 of Saintclaire per Ryan J and paragraph 94 of Senior & Anderson [2011] FamCAFC 129 per Strickland J).
The subject document is expressed to be a s.90B financial agreement, with certificates attached for the purposes of compliance with s.90G of the Act.
Background facts
There appear to be a number of relevant, uncontested, facts, as follows:
a)The wife was born on (omitted) 1975 in (country omitted) and, at the time of hearing, was 40 years of age. The wife arrived in Australia in 2003.
b)The husband was born on (omitted) 1973 and, at the time of hearing, was 43 years of age.
c)In 2008, the wife had commenced TAFE studies in (course omitted). All classes in those study units were conducted in English.
d)In 2009, the parties were introduced to each other by friends.
e)In about (omitted) 2009, the wife, who was in Australia on a student visa, was working as a (occupation omitted). She shared rental premises with her sister, Ms M (English name: “Ms M”) (“the wife’s sister”) at (omitted). The wife had jointly signed a lease with the wife’s sister for those premises, such lease being in English.
f)In about (omitted) 2009, the husband was working as a (occupation omitted) at (employer omitted).
g)On (omitted) 2010, the wife was awarded a (qualifications omitted) in (course omitted) and she was, then, studying for a (qualifications omitted).
h)In (omitted) 2010, the parties travelled to (country omitted) on holiday and to attend a wedding there.
i)In (omitted) 2011, the wife travelled to (country omitted) for a period of 3 weeks, as her mother had suffered a stroke. At that time, she learnt that she was expecting a child with the husband.
j)On either (omitted) 2011 (on the wife’s version) or (omitted) 2011 (on the husband’s version), the parties commenced cohabitation. Nothing turns on that date discrepancy.
k)Following the parties’ cohabitation, the husband then moved into the rental premises, then occupied by the wife and the wife’s sister, referred to in (e) above. The husband, the wife and the wife’s sister entered into a lease of those premises on (omitted) 2011. A fresh lease was taken out on (omitted) 2011.
l)Prior to the parties’ cohabitation, the husband owned a property at Property A, (“the Property A property”) and two investment properties at Property B and Property C (“the investment properties”).
m)Prior to the parties’ cohabitation, the wife only had some personal jewellery and no liabilities.
n)On 12 or 13 July 2011, the husband attended at the offices of his solicitor, Ms Arthur (the husband’s diary entry of 12 July 2011 is either a record of that appointment or a reminder for his appointment the following day) to sign the subject document. The instructions to draft the same were provided during May and June 2011. Ms Arthur records that event as having occurred on 12 July 2011, in terms of her letter to the husband dated 13 July 2011 (Exhibit “6”) and her memorandum of fees issued on 13 July 2011 (Exhibit “F”). Ms Arthur signed a certificate, in asserted compliance with s.90G(1)(c) and (ca) of the Act, on 13 July 2011 (although that date appears to have been written over another date written on the subject document).
o)On 21 July 2011, the wife attended upon Mr D to execute the subject document. Mr D provided a certificate, in asserted compliance with s.90G(1)(c) and (ca) of the Act, on 21 July 2011.
p)In (omitted) 2011, the Property A property was demolished and in 2012, two properties were constructed on the land there.
q)On (omitted) 2011, the parties were married.
r)On (omitted) 2011, the wife applied to the Department of Immigration for a permanent partner visa, sponsored by the husband.
s)On (omitted) 2011, the parties’ child, X (“the child”) was born.
t)In December 2011, the parties ceased living together.
u)On (omitted) 2012, the wife left Australia with the child.
v)On 25 January 2012, the Department of Immigration wrote to the wife to advise her that it had been informed that the spouse relationship, on which her current visa application was based, was no longer continuing.
w)On 15 February 2012, the husband forwarded an email to the wife indicating that the parties’ marriage was at an end. The wife responded to that email in terms of her own email of 7 March 2012 (Exhibit “E1”). The parties appear, notwithstanding (t) above, to have relied on a separation date of 15 February 2012.
x)On 6 July 2013, the parties’ divorce became effective.
y)On 2 June 2014, these proceedings were commenced by the wife.
z)On (omitted) 2015, A was born to the husband and his new partner, Ms Y.
Documentary evidence
The Court notes the following:
a)Exhibit “D”, which is undated, bears the original signatures in blue pen of the husband and Ms Arthur on the attestation page and on the annexures. This document is not signed by the wife. The certificate provided by Ms Arthur has “13 July 2011” inserted in black pen at paragraph 6, being the date upon which, she says, she gave a copy of her certificate to the wife/legal practitioner for the wife. The document is dated in blue pen (July 2011) and a date has been obscured in black pen with the new date “13th” inserted above in black pen. The certificate appears to have been corrected in terms of its reference to s.90G of the Act in the heading and in paragraph 2 (from that referred to in Exhibit “4”).
b)Exhibit “4” has the original signatures of the husband, the wife, Ms Arthur and Mr D on it and has been dated 21 July 2011 by, it would appear, Mr D in blue pen, similar to the date and writing provided for in his certificate attached to the said document. The Exhibit includes a certificate, which now bears amendments in hand, initialled by, it would appear, Ms Arthur, correcting in 2 places the reference to s.90G of the Act and the date of the 13 July 2011 appears to have been amended in black pen in a different location to that in Exhibit “D”. Exhibit “Court 1” appears to be a photocopy of Exhibit “4”.
c)The Court accepts that, no later than 13 July 2011, the husband had signed the subject document (Exhibit “4”) in his solicitor’s office as evidenced by Exhibit “F”. A certificate appears to have been attached to that document, which appears to change the date from a date which is unclear to 13 July 2011. That certificate appears to have been signed by Ms Arthur. In paragraph 6, the certificate states that on 13 July 2011 a copy of that certificate was given to the wife/the legal practitioner for her. It is clear, however, that on 13 July 2011, the said certificate had not been so provided to the wife’s legal practitioner.
d)The Court appointed interpreter, Mr M, gave evidence as to the English translation of the document, being Exhibit “5”. This document had been produced by the wife after inspecting her email records, noting that the cover page at the front of Exhibit “5” records her forwarding of the document in (language omitted) to “(omitted)” (English name: (omitted), and being Ms J) at a (omitted) email address on 28 February 2012, for the purposes of translating the same into English so that the wife could then forward the English translation of that document to the husband, as Exhibit “E1”.
e)Exhibit “E1”: This is a letter from the wife to the husband, annexed to an email dated 7 March 2012, in which the wife wrote the following:
“It's very shocking to receive your “notice”. It's been weeks and I still haven't recovered from the shock. I am really confused, thinking about everything between you and me, and I can't figure out what went wrong. I can't believe you said our relationship was planned and X is a bargain for financial and citizenship benefit. I don't remember when you ever gave me any money since we met, even after we got married and after X was born. If I ever wanted your money, why I agreed entering into the prenuptial agreement with you? You said you loved me and asked me to marry you. We got married because we love each other. Now you accuse me of using you and not loving you...
…I found out I was 2 months pregnant on the day I returned to Sydney. I was so happy because I am 37 and was going to be a mum! I thought the baby would bring lots of happiness and joy to our lives and relationship. But I was sad when seeing your face with doubts after hearing the news. We went to the clinic together to confirm the pregnancy. Again, I didn't feel you were happy about this. Then, things started to change. You asked me to sign the prenup. You never showed you care about me or the baby ...” [emphasis added] [parts omitted].
f)Exhibit “5”: Mr M, in his evidence, read a translation of this exhibit onto the record as follows, and the Court highlights the words emphasised:
Paragraph 1 (first paragraph)
I felt very surprised and confused to receive your letter. I have thought about it for a long time. You told me I’m using our child as a leverage for financial and immigration purposes. It’s an absurd thing to say. When have you paid me anything? Before we got married you asked me to sign an agreement in case we get divorced in the future, as evidenced by our agreement. I also sign the agreement, which means I’m not taking advantage of your identity and your finance. Since you have these concerns then why did you propose to me and said you loved me? And now you have regretted and came to the immigration office making all these untrue accusations. I think maybe we need to reflect our time spent together and the time after we got married, and after we have our children. Maybe you should listen from my heart and understand how difficult and painful it is to be a wife.
Paragraph 2
I have been in Australia for almost 10 years. I didn’t come to Australia because I’m trying to take advantage of your identity since I was introduced to you by our neighbour merely. If pregnancy is my plan then the plan is yours. In terms of money, my parents provide money for my sister and I to go to school, and the living fees are paid by me and my sister. And I never argue with you on this because you always told me you needed money to rebuild your house, and you complain you have paid a lot of money on the house. In your letter you said I planned all this, and using our child to get benefits in terms of finance and identity. All these are not true. I came to Australia to go to school and it is still so now. I think you must be paranoid.
Paragraph 3
Since we met, and then I got pregnant, we have been living a happy life, and we love each other so much. Since (omitted) 2011, because my mum [I] had a stroke I travelled back to (country omitted) to visit her. When coming back from (country omitted) to Australia I found out I was pregnant. The doctor checked and confirmed I was pregnant for over two months. After I came back I was filled with joy and shared the news with you. However, you treated me with dirt, and then you accompanied me to the doctor for a re-examination, which also confirmed I was pregnant for over two months. That’s when your attitude towards me changed. I couldn’t see that you were happy to be a father. At that time you asked me to sign a prenuptial agreement. If you know I was pregnant, but you never cared for me, and your temper got worse, but I still chose to take it. And I was alone during the maternal examination and then I thought is it a bad time to have a baby? But it’s not my plan. It is just God’s will.
Paragraph 4
Since we had the baby, you have treated me worse. You never paid any living expenses. All the expenses are paid by my sister and my aunty. According to (nationality omitted) custom a woman must rest for a while after giving birth, which means I have to rest for 30 to 40 days. I told you about this custom, but you said, “It is Australia, not (country omitted).” You only agreed after we negotiated, on condition that you won’t pay for anything. Since we met until now you have never paid anything for us, but I thought since we are couple we don’t need to care so much, and then I didn’t ask you to pay for anything.
Paragraph 5
After I gave birth my uterus pressure on my bladder and I had haemorrhoids which means I couldn’t urinate or defecate normally. I once told you about my pain, but you ignored it. Since I just become a mother and I’m still in the learning phase, I don’t know a lot about many things. That’s why I asked my aunty to help me. Aunty helped us a lot, including taking care of our daily life, cooking meals, teaching me how to take care of a baby. But in the end you made it very difficult for aunty, and even drove her off. If you have anything unhappy you will blame it on aunty, but you do know that my psychological stress is even larger than my physical pain.
Paragraph 6
I don’t know the reason why you’re limiting my freedom. You won’t let me go outside and even collaborated with your father and blame me. At first you asked me to sign a lease to rent the house now. On that day you drove me to my cousin to stay for two days, and then you moved out and asked me to sign the consent form that you’re going to move out. Why is that? Is that your plan as well?
Paragraph 7
Your parents also came to my house accusing me and trying to drive my aunty off; said since I was with you I need to behave. If I don’t behave they will make me leave Australia. Again, you brought your family and (omitted) to (omitted)’s house and asked me to sign a consent form to move out. I do understand the reason of that, and your sister kept calling and sending text messages to accuse me. Your family, friends and you accuse me for no reason, because you have been sharing these messages. I don’t know what mistakes I have made which allows them harass me again and again.
Paragraph 8 (last paragraph)
(omitted) once said, “A woman must be smart and understand how to take care of herself so that she can take care of her family and baby without pain.” She told me I must return to (country omitted) to treat my disease first and then come back. I felt her concern and I thank her for her encouragement, but how about you, Mr Pendle? You don’t care for our emotions as couples, and just pick on me through others. I really couldn’t understand.
g)Ms Christie submitted that, while the relevant parts of Exhibit “5”, as highlighted, were not identical to those of Exhibit “E1”, they were not materially different, as those parts which referred to the prenuptial agreement were accurate and common to both versions. The Court accepts that submission.
h)When the Court appointed interpreter translated Exhibit “5”, he referred to the word “agreement” and not the words “prenuptial agreement” in paragraph one. He, however, translated the words “prenuptial agreement” in paragraph 3. The wife’s oral evidence was that she never understood the words “prenuptial agreement”. The particular relevance of that is that the wife stated in Exhibit “E1”: “If I ever wanted your money, why I agreed entering into the prenuptial agreement with you”. This was written, as conceded by the wife, in February 2012 and sent to the husband on 7 March 2012. This contradicts the wife’s evidence that, until 2014, she was unaware that she had signed a document in relation to financial matters. She maintained that she had signed a document which she understood related to her marriage which would enable the Department of Immigration to see her marriage as real or more real. The wife, however, conceded that during a conversation with the husband which, she said, had occurred on the way to Mr D’s office, the husband had mentioned the words “financial agreement” (see paragraph 33). The wife maintained that she did not know what those words meant then. When pressed as to when this was said to her, she was entirely unclear and her response was: “I can’t remember. It has been too long”. The wife said that she did not ask the husband what the financial agreement was for because, she said, she was pregnant with his child and trusted him and because their relationship difficulties had not yet started. The Court, however, accepts that the wife understood that she was signing the subject document in terms that it concerned the financial affairs between the husband and herself.
i)From an examination of Exhibit “F”, the husband’s solicitors appear to have had a conference with the husband for the purposes of drafting an agreement on 30 May 2011. A document being a “cohabitation and separation” agreement appears to have been produced with the word “Draft” over it in about June 2011. This document was forwarded to the husband on 29 June 2011 under cover of a letter from his solicitors, Webb Thom. The wife maintained that the wife’s sister discovered these documents, being Exhibit “C”, at some time in December 2011, after the husband had vacated the matrimonial home. The wife’s evidence was that the wife’s sister had not disclosed these documents to her until January 2012, when the wife’s sister had travelled to (country omitted). The said documents, having been left in Australia by the wife’s sister. Upon the wife’s sister’s return to Australia, in mid-February 2012, it appears that she then told the wife about the headings in the said documents and some of their contents. The wife’s evidence was that the wife’s sister had not provided the “cohabitation and separation” document, itself, until about 2014. It is this document, which the wife seems to refer to in her email to the husband of 7 March 2012, responding to his email of 15 February 2012, whereby he refers to a “marriage separation notice”. The wife wrote her response to the husband’s email in (language omitted) and had it translated for her. The wife says in her typed English translation (Exhibit “E1”) of the (language omitted) document being Exhibit “5”: “If I ever wanted your money, why I agreed entering into the ‘prenuptial’ agreement with you”. The “cohabitation and separation” document does not, however, include the word “prenuptial”. The wife’s evidence as to her possession of a copy of the form of the subject document and her awareness of its nature and impact, was unclear. Initially, she asserted that she did not see the subject document until her lawyer, Ms L, showed it to her, and that she had no idea how Ms L got a copy of it. The Court accepts that the wife had a copy of a document, likely to have been a draft of the subject document, when she commenced the proceedings, as she quoted from it. Ms L may have got that document, either from the wife or the wife’s sister. At the end of her cross examination, the wife was not moved from her position that she had been misled as to the nature of the subject document she was asked to sign. She provided an explanation for referring to the subject document when writing post-separation, namely that letters and draft documents had been found, as left by the husband. The wife submits that the original version of the writings, before translation, were not as clear as the translated document. In short, the fact that there was a reference to the contents of the subject document in these post-separation writings was submitted as not being proof of the wife’s state of knowledge as to what she understood she was signing, at the relevant time. The wife submits that she was only able to reference the subject document upon acquiring knowledge of its contents, after having already signed it.
j)Exhibit “6”, being a letter from the husband’s solicitor to the husband dated 13 July 2011, confirms that he attended at their offices on 12 July 2011 (as did his old telephone, which had an electronic diary in it, as accessed by the husband when giving his oral evidence) and includes the words “again today”. The memorandum of fees of Ms Arthur records the attendance on the husband (30 minutes) to sign the agreement on 12 July 2011. That is inconsistent with the certificate of Ms Arthur, which states that, after signing the subject document, the husband was provided with the statement signed by her. This statement could not have been provided to the husband on 12 July 2011, as the statement had not yet been completed. It was completed on 13 July 2011, when Ms Arthur said a copy was given to the wife/legal practitioner for the wife. The letter confirms that the subject document was collected by the wife that day, in order for her to obtain independent advice on the same. The wife said that she did not see Ms Arthur that day and the husband confirms that the wife was not with him on that day. The letter refers to the subject document as having been signed as original in duplicate by the husband and states that the wife should have both copies signed as original before the solicitor that advises her. The Court notes, however, that there has only been one document produced which bears original handwriting and the original signatures of the husband and the wife on it, together with the original signatures of Ms Arthur and Mr D (being Exhibit “4”). Exhibit “Court 1” is a copy of that document. This fact clouds the evidence as to satisfy the sufficient and effective compliance of s.90G of the Act.
The Court is not satisfied, given the evidence of the husband that the wife was not with him on 13 July 2011 when he attended to sign the subject document, that the letter from the husband’s solicitors to the husband dated 13 July 2011 (Exhibit “6”) could be taken, simply on its face, to evidence compliance with s.90G(1)(ca). The certificate provided by Ms Arthur is unclear in its terms as to whether such compliance was to the wife or her legal practitioner. Ms Arthur did not appear to charge professional fees for this attendance, as it was not included in her memorandum of fees dated 13 July 2011. Ms Arthur was not called to give any explanation in relation to this.
General propositions
The Court accepts that it is not permitted to look at the impact/effect of the subject document on the rights of a party to obtain an order under the Act when determining whether or not it would be appropriate for the agreement embodied in the subject document to be set aside or to be determined binding.
The Court accepts that the mere fact that the wife has removed the child from the jurisdiction and failed to make any application for child support is not relevant to the question of whether or not the agreement embodied in the subject document should be set aside or to be determined binding.
Is there a financial agreement between the parties?
In accordance with the Saintclaire decision, the Court must first determine whether a financial agreement exists between the parties. The Court is of the opinion that, in this case, the making of such a determination hinges upon the manner in which the subject document was executed and the relevant knowledge and actions of the parties at that time.
Wife’s evidence as to the execution of the subject document
The wife, initially, said that she and the husband attended on Ms Arthur at her office to see her about a document. Thereafter (and it is not clear how long after), the wife said she was taken by the husband to see another person, who the Court accepts was Mr D. The wife said that, after seeing Ms Arthur, she had a conversation with the husband in English to the following effect:
W: “Where are you taking me?”
H: “You are not an Australian citizen. You must sign a document in the presence of a solicitor. If you don’t sign it, our marriage will not be seen as real once we get married by the Department where as if you sign this document it will be seen as real or more real it will be easier for immigration.”
W: “Okay.”
The wife said that the husband had also mentioned, at that time, the words “financial agreement”, but that she did not know what that meant.
Ms Christie put to the wife that her story about the husband informing her that the subject document was for immigration purposes was one invented by her after 2014. The wife denied that.
Ms Christie submits that the abovementioned asserted conversation does not sit easily with the wife’s evidence that she had previously had immigration advice from a migration agent. However, the wife’s evidence was that she had received such advice from a migration agent when arranging for her student visa, well prior to her meeting the husband. Her evidence, so far as her permanent partner visa sponsored by the husband was concerned, was that she and the husband completed all the documents for that visa, without the assistance of a migration agent. The husband did not dispute that.
However, the wife, subsequently, changed her evidence to say that she did not attend upon Ms Arthur, prior to signing the subject document. She said that she, in fact, attended, with the husband, on Ms Arthur only after she had signed the subject document (being the same day that she saw Mr D) and that she saw the husband give to Ms Arthur an envelope which, she believed, contained the subject document. She confirmed that she had only been to Ms Arthur’s office on one occasion.
The wife said that she signed the subject document (on the last page and on Annexures “A” and “B”) as requested by Mr D, because she was worried that, if she did not sign it until after she had married the husband, problems with her immigration would arise.
The wife initially said that the husband gave her the subject document to take into a conference room with Mr D. He told her that he could not go in with her and that she must see the solicitor alone. She said that she had tried to read the subject document, but could not understand it, nor its legal implications. The wife, however, in her correcting affidavit, said that she had never had the subject document in her possession, nor did the husband have it and nor did he hand it to her on the day she was taken to see Mr D. She said, therefore, that she had never tried to read it. The Court notes that it is unclear how the subject document came to be in Mr D’s possession. The wife said that she saw an envelope in Mr D’s hands and that he took the subject document out of the envelope. One inference was that Ms Arthur had forwarded the document to Mr D, however her memorandum of fees, being Exhibit “F”, does not disclose that she did so. From that memorandum, it would appear that Ms Arthur’s retainer concluded on 12 July 2011, when she refers to a “conference with you [the husband] explaining and signing agreement”, although, it would appear that that conference may have occurred on 13 July 2011, in accordance with Ms Arthur’s certificate, if that date be accurately recorded there.
The wife’s evidence that she had not received any advice as to the contents of the subject document was firm. She did not change that evidence. Her evidence was that before Mr D started to read the subject document, she thought that the document had something to do with proving that her marriage was real, because that was what the husband had told her. She says that she was not advised that she had an ability to negotiate a different agreement. She said that during the 10 to 15 minutes that she spent with Mr D, he read the subject document to himself and then read it out to her “in verbatim”, paragraph by paragraph. She, initially, said that she knew this because, while her English was very limited, she could recognise some of the English words in the subject document. She later said that this was not correct, as she had never read the subject document, herself. The wife, in cross examination said that she asked Mr D: “What kind of document is this?” She said he responded using a word which she did not understand. She then said that she just “frowned and never said a thing”. She said that she felt very embarrassed. Her affidavit said, however, that: “I recall the solicitor read out the formula referred to in clause 11 of the document” and that she asked: “What is this formula?” She then said the solicitor did not explain it to her. The wife had a recollection that the solicitor did ask her whether she had jewellery worth around $7,310.00, as stated in Annexure “B” of the subject document, and that she had confirmed that to be the case.
The wife’s evidence was that she did not have any understanding of the words “prenuptial agreement”, being the heading words on the subject document. The Court, nevertheless, accepts that the wife knew that the subject document was dealing with financial matters between herself and the husband and was not limited to simply making her marriage look real for the Department of Immigration.
The wife said that Mr D never asked her whether she spoke English, or what her English skill level was. She said that Mr D never asked her if she had read the whole of the subject document, or whether she understood it. Her evidence, in that regard, was somewhat problematic because she also stated that, at around that time, she only conversed with the husband in very simple English and that, at times, when she did not understand what he said she would smile and agree, so as to avoid any embarrassment. She did not ask Mr D to have the subject document translated for her, nor did she tell him that she could not understand what he said to her. Her evidence was also that she had told Mr D that she was expecting a child to be born and, at least, to that level, she communicated with him in English. Clearly, if Mr D had been called, he may have assisted the Court in understanding the wife’s grasp of the English language at the relevant time.
The wife did not call any evidence from the wife’s sister, who, she said, had a better grasp of English than she did, as to her English language skills at the time of signing the subject document. The wife’s evidence as to the whereabouts of the wife’s sister was, itself, entirely unclear. She, initially, asserted that the wife’s sister was in (country omitted), but, during her cross examination, she conceded that she was in Court. The wife also stated that she was living in Australia, just prior to the hearing, by herself and then she stated that she was, in fact, staying with the wife’s sister, who was then back in Australia. The wife’s evidence was that whilst she had signed a lease with the wife’s sister, it was the wife’s sister who had read the lease and had told her about it. The wife’s sister was, clearly, someone that could have given the Court some assistance in understanding the wife’s level of English, at the relevant time.
The wife was studying at TAFE in 2009 when she met the husband and she claimed that, due to her limited English, she had failed subjects and had to repeat them “over and over again”. The wife acknowledged sending emails and text messages to the husband in English between 2010 and 2012. She also received text messages and emails from the husband in English. The wife agreed that, between 2008 and 2010, she had attended classes conducted in English and had studied courses involving (courses omitted). She had also enrolled in the (omitted) School and completed most of her immigration documents in English. The wife’s evidence was that she had a basic understanding of English and she would, on occasion, use Google Translate to translate words she could not understand for her assignments, although during examinations, if she did not know a word, she said that she “just sort of guessed” at it. She also used Google Translate to understand the husband’s affidavit and had some assistance from a cousin in (country omitted) in interpreting it.
While the wife conceded she had a basic ability to communicate in English before 2011, the Court’s observations of her in the witness box were that she had great difficulties in communicating without the assistance of an interpreter. The Court accepts that the elapse of time after she left Australia in 2012 and the hearing date may have, negatively, impacted on her English language skills.
The wife, however, acknowledged signing the subject document in circumstances where she was of the view that she did not want the husband’s money. Somewhat inconsistently, she said: “I signed this document but I didn’t know it’s about the money”. The Court accepts that she appeared to be of the view that she had signed a document which would present her marriage to the Department of Immigration as valid. She was concerned, in her evidence, that the husband had said that she was only with him for his money. Therefore, a document which indicated that she was not simply marrying the husband for money could be seen in that light. That is, of validating a genuine marriage. Nevertheless, her evidence was that she did not understand the “binding” nature of any agreement, evidenced in the subject document. The Court accepts that position.
The wife denies ever receiving a copy of the signed subject document. She says that the first time she saw the subject document after she signed it was when Ms L provided it to her in 2014, when she completed her first affidavit. Her evidence was that she had no idea how Ms L obtained it. It is conceded, however, that Ms L had a copy of it by 2014.
Further, the wife said that the wife’s sister had discovered a draft of the subject document (albeit described as a “cohabitation and separation” agreement) under cover of a letter from Ms Arthur to the husband dated 29 June 2011 (together being Exhibit “C”), after the wife had left for (country omitted) and after the husband had vacated the former matrimonial home, being the leased premises at (omitted) and that the wife’s sister had communicated some of its contents to her.
The husband’s sister gave evidence that she communicated with the wife in English. She asked questions such as: “How is your pregnancy going?”, “Have you been having your check-ups?”, “How did your scans go?” and the wife appropriately responded in English. The Court accepts her evidence as believable, including that she drove the wife to work about 4 times between 2010 and 2011 and that the wife used her computer occasionally, notwithstanding that the wife denied this. While the wife’s evidence that she had never been driven to work by the husband’s sister, or used the computer at her home, was curious (as submitted by Ms Christie), that evidentiary divergence (save as to credit issues) was not materially relevant to the issue of the wife’s understanding of the subject document, at the time of its execution.
The wife said that Mr D had never explained to her the advantages and disadvantages of her signing the subject document and had never provided her with a copy of the subject document after she signed it. The wife’s evidence was that when Mr D had finished with her, she met the husband in the foyer of Mr D’s office and she believed that the subject document was then given to the husband (it is unclear whether Mr D provided it then) in an envelope and she saw the husband pay an account using his credit card and/or Eftpos card. She then said that she and the husband went to Ms Arthur’s office and she saw the husband give Ms Arthur an envelope which, she believed, contained the subject document.
The Court accepts that it is clear that Mr D did not have the subject document translated to the wife in her native and primary language, (language omitted). Certainly, Mr D’s memorandum of costs and disbursements (see Exhibit “3”) showed no professional charging item for any interpreting services provided.
The Court accepts that the wife did not know Mr D, had no prior dealings with him and did not arrange the meeting with him.
The wife acknowledged that she had never given a copy of the subject document to the Department of Immigration, notwithstanding that she thought it was important for the Department of Immigration to consider. Her position appeared to be that the said Department had never asked for it.
Husband’s evidence as to the execution of the subject document
The husband said that there were never any issues with respect to his communicating with the wife in English. The husband said, in his oral evidence (not referred to in his affidavit), that he had some conversations with the wife commencing in about June 2011 (in particular, when the parties were walking between where the wife was living and where the husband was living and some weeks before he went to see Ms Arthur), to the effect that he was worried about losing the property in his name if their relationship fell apart. The husband said that the wife’s response to him was to the following effect: “I understand that you have a lot to lose and I don’t want you for your money.” His response was: “I am relieved because this was a big worry on my mind and I am glad that I have gotten it out.” This conversation has a lack of reality to it. It is inconsistent with his oral evidence that the instructions to Ms Arthur were “what we would have wanted because I talked fluently with my partner at the time” [emphasis added]. The husband acknowledged that there was nothing to that effect in his affidavit material, including, in particular, any joint instructions to Ms Arthur, as referred to by Ms Arthur in relation to an email from the husband on 23 June 2011. The husband said, in further cross examination in relation to going to lawyers: “Well it was our decision to do so” [emphasis added]. The husband acknowledged that this was not referred to in his affidavits. It was put to him that that was because there were never any open discussions with the wife about those matters and that he had done such things on his own and in secret. His response was: “I don’t think that’s true” and “I would say that’s not true.” He also said that the subject document had been changed: “to suit our needs” [emphasis added]. It was put to the husband that there was no “us” and his response was “Okay. Alright.” He repeated: “I felt that it was us” [emphasis added].
The husband acknowledged that there was no discussion about what would happen to the child after birth and as to whether he would assist the wife financially. There was no mention of any need for a financial agreement to be signed following independent advice to make it binding. The husband said in his affidavit of 2 October 2014, which deposed to Ms Arthur recommending Mr D to the wife that Ms Arthur may have recommended Mr D to him and not to the wife. The husband conceded that nowhere in his affidavit did he depose to discussing the subject matter of protecting his assets with the wife. The husband said that he saw his solicitors on 6 July 2011, only 3 days after the commencement of cohabitation (on his version) and it would appear that he had emailed them on 23 June 2011, the very day that he signed a lease with the wife and the wife’s sister (see paragraph 26 (k) above).
The Court accepts that the drafting of the subject document was entirely conducted between the husband and Ms Arthur, without any input from the wife.
The husband said that on 12 July 2011 he had gone to Ms Arthur’s office and signed a copy of the subject document in her presence. He said the wife was not with him at the time. He says, however, that, on that day Ms Arthur provided the subject document signed by him to the wife. The husband thought that because his diary entry had a record of a 10:00am appointment with Webb Thom on 12 July 2011 and that the entry noted “after me, Ms Hadden [the wife] came to get the signed agreement”. The husband had no other evidence to support this assertion and acknowledged that he did not know whether the wife had actually attended on that day. The husband also had an entry for 12:00pm to 1.00pm with the same solicitors on 13 July 2011 with a note “Ms Hadden came with me to collect documents”. That appears consistent with the certificate signed by Ms Arthur, although that certificate states that the subject document was given to the wife/the legal practitioner for the wife on that day. It is unclear how that was done from the husband’s own evidence and the wife disputes that she received it. The husband could not say whether Ms Arthur had ever met the wife. Ms Arthur was not called to explain this issue. The husband said that he had made enquiries of Ms Arthur regarding his file and was told it was in storage. He, subsequently, said that he had not telephoned Ms Arthur and was unaware of whether she was still at the same firm, as his enquiries appear to have been made with its receptionist. While he was told that his file was in storage, he acknowledged that he had not asked his current lawyers to retrieve the file and his evidence was that he had never received his file.
The certificate completed by Ms Arthur is not sworn evidence. The Court would have been assisted by having some direct evidence from Ms Arthur at the hearing.
On 21 July 2011, the husband said he took the wife to Mr D’s office at (omitted) for the wife to sign the subject document in Mr D’s presence. The husband denied the conversation asserted to have occurred by the wife in paragraph 32 above. He did agree that he had a conversation with the wife on the way to Mr D’s office, but there was no evidence as to what was said during that conversation. The husband agreed that there was nothing in his affidavit about any discussions with the wife about her attendance on Mr D’s office. His response was: “No, but I have never explained how I made babies either”. His response gives him little credit. It was also put to him: “You had never told her why she was going to that office?” and his response was: “If you say so”. That evidence weighs against him. The Court is of the view that the husband and the wife did have the conversation set out in paragraph 32 above.
The wife’s evidence was that Mr D had a yellow envelope with him when she went in to see him and she did not deliver any documents to him.
From the terms of Ms Arthur’s letter, being Exhibit “6”, she did not appear to have sent the subject document to Mr D, herself.
The husband said that after he had signed the subject document and it was at the parties’ home between 13 July and 21 July 2011, he had had a conversation with the wife to the effect: “Is there any problem? Are you happy with the BFA [meaning binding financial agreement]? If there is any dispute, or anything you don’t like, let me know.” The wife denied any such conversation. The husband’s evidence was that he had already paid Ms Arthur’s bill and received the subject document with Ms Arthur’s certificate attached. The Court is of the view that it is highly unlikely that such a conversation occurred, as asserted by the husband. He did not refer to it in his affidavit, as he conceded. The husband had concluded the matter with Ms Arthur. To then ask the wife whether she wanted to change the subject document appears entirely inconsistent with that position and the position of certainty that the husband wanted to achieve. This evidence weighs against him.
The husband agreed that he then took the wife to Mr D’s office, that he went inside the office with her but did not go into the office where the wife and Mr D were, that she trusted him, that her English was not as good as his, that he was in a superior financial position to her, that she was expecting a child with him and that she was dependent upon him. The husband also agreed that nowhere in his affidavit had he set out any discussions he had had with the wife about his involvement with Ms Arthur to arrive at the formulation of the subject document.
In cross examination, the husband said that he had never seen the subject document with Mr D’s signature on it in 2011, 2012 or 2013. This document, however, was produced by his legal representatives in answer to a call for that document, when it was then passed to the wife’s legal representatives. Ms Christie submits that, as a result, the wife, at least at that point, received a copy of Ms Arthur’s certificate, even if she had not received it before and that that was sufficient compliance with s.90G of the Act. The Court does not accept that submission given that the thrust of the wife’s opposition was that it had never been provided to her, as certified by Ms Arthur on 13 July 2011, and the production of it in terms of the conduct of the hearing, itself, would not effect compliance with s.90G(1)(ca) of the Act. The husband then changed his position and said that he had received a copy of the subject document and was aware that Mr D had signed the certificate attached to it. The husband does not give evidence as to how he became so aware. The husband was certain that he had never met or spoken to Mr D, at any time. The certificate provided by Mr D states that it was given to the husband/the legal practitioner for the husband on 21 July 2011. It is unclear how this occurred, given that the husband was not in the conference room with Mr D, so as to enable Mr D to provide the certificate in the form that he did. The husband said he left the wife in Mr D’s office and returned to his car and, upon returning to Mr D’s office, saw an envelope in the wife’s hands. Certainly, Mr D could not have forwarded the subject document to Ms Arthur to enable that certificate to have been given in that form. The husband’s evidence that he had received the certificate from the wife at their home after her appointment with Mr D is inconsistent with Mr D’s certificate itself.
Similarly, the certificate completed by Mr D is not sworn evidence. Mr D was not called to explain the factual matters and inconsistencies referred to above and this weighs against the husband.
Credit
The wife submits, and the Court accepts, that credit is especially important in a case where one seeks to invoke equity to aid in setting aside an agreement which would, otherwise, be enforceable.
Further, the husband submitted that the fact that the wife persisted with a case which asserted a fraudulent representation of the subject document by the husband was a significant matter in respect of her credit.
The Court does not accept that the wife did not tell the truth about matters central to the Court's determination. While she gave some different versions of events, her evidence was consistent in terms of her lack of knowledge about the legal binding effect of the subject document so as to oust the jurisdiction of this Court. Her presentation was not loud or aggressive, as asserted by the husband. She had some difficulties in giving her evidence, particularly, concerning who she was living with and when she arrived from (country omitted), given her apparent current poor English language skills.
The Court accepts that the wife knew that she was signing a document, being the subject document, setting out the parties’ agreement in terms of financial matters between themselves. She was aware that the husband had already signed the subject document when she signed it. The Court also accepts that she had a sufficient understanding of the English language to have been able to understand its terms and to communicate with Mr D her position with respect to it.
Is the subject document a deed?
Mr Santisi submits that the Court must have regard to the form of the subject document, which is said to be a “deed”. Mr Santisi submits that consideration should be given to all of the formalities that travel with the execution and exchange of a deed over and above what arises from s.90G of the Act, expressly or by implication. He submits that nothing in s.90G says that none of the other formalities associated with a deed, should not be complied with.
In terms of the obligations to enforce a document as a deed, the usual formalities for an instrument to be a deed are that it must be written on paper, parchment or vellum, must be sealed and must be delivered. Sealing, however, is generally no longer, literally, needed. In the case of the subject document, it is referred to as a deed and whilst the word “signed” appears, rather than “signed, sealed and delivered”, the witness clause states that the “parties have hereunto set their hands and seals…” on the subject document. In New South Wales, pursuant to s.38(3) of the Conveyancing Act 1919, if a document is expressed to be a deed and is signed and witnessed, it is taken to be sealed.
There is no formal requirement for a deed to be signed on each page of a document said to constitute a deed.
The importance for the subject document being a deed is that there is no requirement for consideration for a promise made in a deed: see Australian Woollen Mills Pty Limited v The Commonwealth (1954) 92 CLR 424.
The Court accepts that the subject document is a deed.
The Court also accepts that the subject document, in its terms, evidences a valid financial agreement between the parties.
Should the agreement be set aside?
If the Court is correct about the subject document being a valid financial agreement, then the wife must satisfy the Court that the financial agreement should be set aside for one of the reasons set out in s.90K of the Act.
Mr Santisi submits that, in those circumstances, the wife would seek to have the financial agreement set aside on the following bases:-
a. the agreement was obtained by fraud (including non-disclosure of a material matter);
b. the agreement is void, voidable or unenforceable;
c. in the circumstances that have arisen since the agreement was made it is impracticable for the agreement or a part of the agreement to be carried out;
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 wife has caring responsibility for the child (as defined in subsection (2)), a party to the agreement will suffer hardship if the court does not set the agreement aside; or
e. in respect of the making of a financial agreement--a party to the agreement engaged in conduct that was, in all the circumstances, unconscionable in the circumstances outlined in Commercial Bank of Australia v Amadio (1983) 151 CLR 447.
Fraud
Mr Santisi submits that, in terms of a finding of fraud, the Court would accept the wife’s account as to how she came to sign the subject document, namely that she never negotiated with the husband its terms, as he claimed. He submitted that the drafting of the subject document was a “one-sided affair” with no opportunity for negotiation and that the husband was either silent as to the nature of the subject document or misleading in terms of his explanation to the wife that it was a document to make their marriage appear more real. Mr Santisi emphasises that this occurred in an environment where the wife did not have the benefit of an interpreter or translation of the subject document to assist her in understanding its terms.
The Court accepts that a contention that the husband misled the wife as to the content of the subject document, so as to constitute a fraud, is not made out on the evidence. While the Court accepts that the husband, on the wife’s evidence, informed her that the subject document was prepared to make their marriage appear real or more real for immigration purposes, notwithstanding that the husband denied making that statement, that, in itself, would not amount to a fraud or deceit, as alleged by the wife, for the reasons referred to below.
Section 90KA: Principles of law and equity
The question of whether the subject document, as signed by the parties, is a financial agreement which is valid, enforceable and effective, requires consideration of section 90KA of the Act which provides that:
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…
While the purpose of s.90KA of the Act is primarily one of enforcement, it also applies the general law to determine the question of validity. See Strickland J in Senior & Anderson at paragraph 34.
The wife contends that the husband had her sign the subject document in circumstances where the husband’s legal representative, Ms Arthur, recommended a lawyer (Mr D) for the wife, unknown to her and where she had no choice in that lawyer. The husband arranged for the wife to see Mr D, delivered her to and from the appointment and paid Mr D’s fees. Mr D did not explain the subject document to the wife, nor gave her any legal advice. No interpreter was arranged to enable the wife to understand the subject document in her own language. Further, the husband misled the wife as to the need for the subject document and its nature.
The Court, now, considers the issues under ss.90K and 90KA as follows.
Void, voidable or unenforceable
The Court does not accept that the agreement contained in the subject document is void, voidable or unenforceable for uncertainty, incompleteness, mistake or misrepresentation.
Uncertainty and incompleteness
Notwithstanding Mr Santisi’s submissions about the subject document being stapled, unstapled, copied and stapled again (perhaps on numerous occasions) and that not every page was signed by the parties, the Court is satisfied that the document, with its recitals (A through to K) and its operative provisions (1 through to 15), together with its annexures and certificates, formed a complete document and that there is no uncertainty that this document, being Exhibit “4”, was, in fact, the document signed by both the husband and the wife in the presence of their respective witnesses and that that document set out the terms of the financial agreement between the parties.
The Court accepts that an examination of the subject document does not indicate any uncertainty in its terms. The subject document was drawn to reflect an agreement, which would, as Ms Christie submitted, apply to the changing financial circumstances of the parties over time. The husband maintained that he intended to undertake work to the home that he and the wife were to occupy. In order to fund that work he needed to borrow. The subject document referred to borrowings. As Ms Christie submitted, and the Court accepts, while the quantum of such borrowings was not stated, that is not a matter of uncertainty in terms of the operation of the clause in the subject document, itself. The Court accepts the submission that if an agreement could be declared void for uncertainty because one could not know the precise quantum of property to be received at any given time, then all agreements could be theoretically vulnerable. The Court accepts that the uncertainty must be about the operation of the clause itself.
Mr Santisi, further, submits that the subject document is void or voidable in terms of its uncertainty and vagueness in drafting and construction. The Court does not accept that submission, as the subject document does not appear, on its face, to be otherwise uncertain and vague.
Mistake and misrepresentation
In relation to mistake, it must be remembered that, as a general rule, being mistaken about some aspect of an agreement will not, generally, provide a party with a right to escape contractual obligations, even if that mistake is fundamental. The forms of mistake may provide contractual remedies in various circumstances. Those forms of mistake include common mistake (where both parties are mistaken about the same thing), mutual mistake (where both parties are mistaken, but about different things), unilateral mistake (where one party is mistaken about some aspect, but the other is not) and non est factum (where a party is mistaken about the nature of the document signed, itself).
Mr Santisi did not address the Court on any factual matter said to give rise to a mistake or misrepresentation, save the conversation referred in paragraph 32 above. While the Court accepts that the husband made that representation, the Court is not satisfied that that statement, in itself, would give rise to a mistake or that, as a representation made (albeit not fraudulently or negligently, but innocently) so as to induce the wife to sign the subject document, it was, in fact, a false statement of fact. Further, the Court accepts that Mr D was there to explain the terms of the subject document and the wife had the opportunity to avail herself of that.
The Court has considered whether the wife could obtain the benefit of a non est factum argument to the effect that the subject document was not her deed.
In Petelin v Cullen (1975) 132 CLR 355, the High Court of Australia considered that the doctrine of non est factum is available to those who, through no fault of their own, are unable to have an understanding of the purport of a particular document, however, a party seeking to rely upon that doctrine has a heavy burden of proof and must show that he or she believed the document to be radically different from that which it was and that, as against the other party (innocent party – being a person without knowledge or reason to believe the validity of the other party’s signature), a failure to read and understand the document was not due to a failure to take reasonable precautions in ascertaining the character of the document before signing it. In such circumstances, the Court accepts that while the wife, in terms of her own evidence, did not raise her concerns with Mr D prior to signing the subject document, she had the opportunity of doing so with the potential benefit of Mr D being available to advise thereon. In those circumstances, the Court is of the view that the wife had failed to take reasonable precautions, herself, to ascertain the character of the subject document, before signing it. Therefore, the wife would not have the benefit of a non est factum defence.
Duress
The Court does not accept that the agreement contained in the subject document is void, voidable or unenforceable due to any duress.
In Weldon v Asher [2014] FCWA 11, Thackray CJ stated at paragraph 102: “For present purposes, I am prepared to proceed on the basis that the claim of duress would be made out in the event it were to be established that [a party] applied pressure that was ‘illegitimate’”.
The wife said that, at a time when she was living with the husband, he had a gun licence and had once shown his guns to her and the wife’s sister. She said that he had told her: “You need to sign this document to prove our marriage was real and you don’t have to worry about anything”. The wife did not say that this was said at the same time he was showing her his guns.
The husband agreed that he had spoken to the wife about his long firearm licence and that he would be bringing his guns and gun safe to the former matrimonial home. His evidence was, however, that he did not show the wife the guns. This is contrary to what the wife said. The wife was aware that he had more than one gun. The husband, in cross examination, said that he had 5 guns. The Court accepts the wife’s evidence that it is likely that the husband showed her the guns, as they were clearly of some importance to him and it was also necessary for him to move his gun safe into the house he was to occupy with the wife and the wife’s sister and to explain that matter to them.
The wife also referred to the husband placing bullets on the washing machine. She said she was scared and under a lot of stress and that she did not know what would happen to her if she did not sign the subject document. The wife said that she had seen the husband’s guns and bullets once before she signed the subject document and once again after. She said that she told her solicitor, Ms L, about this matter, but acknowledged that none of those matters appear in her affidavit. She said that the wife’s sister and the person known as “Aunty” knew about the guns, but, again, there was no affidavit material from either of them about this matter. She did not inform Mr D of this allegation.
The Court accepts that there is no evidence that the husband threatened the wife with his guns.
The Court does not accept that the wife was under “illegitimate pressure” or duress at the time she signed the subject document.
Undue influence
The Court does not accept that the agreement contained in the subject document is void, voidable or unenforceable due to any undue influence.
Mr Santisi submits that the following matters, if they did not amount to a fraud, would still be a basis for the Court declaring that the agreement evidenced by the subject document should be declared void, voidable or unenforceable:-
a. At the time of execution of the subject document, the wife was 6 months pregnant. As such, notice could clearly be taken of the emotional state that generally travels with pregnancy. The husband took advantage of this fact knowing that the wife was in a vulnerable state;
b. The wife was also a person that the husband had asked to marry him and with that also travelled some emotion, which the husband took advantage of;
c. The wife was not a permanent resident, and as such, had a further uncertainty in her life. The husband raised the issue and took advantage of that;
d. The wife claimed to have been misled as to the nature of the subject document that she was asked to sign;
e. The wife claimed that she received no independent legal advice in terms of Mr D reading out the subject document and asking her to sign the same;
f. The wife claimed that she received no assistance from an interpreter or translator and that her English ability did not allow her to understand the terms of the subject document without the assistance of an interpreter; and
g. The wife claimed that she was in a state of disadvantage when compared to the husband, in that:-
i.he had English as his first language, she did not;
ii.he could read and write well in English, she could not;
iii.he was a resident of Australia, she was not;
iv.she was pregnant and vulnerable, he was not;
v.she had a financial and non-financial dependence on him, he did not on her;
vi.he had access to lawyers for some time over several weeks and many hours of consultation with them, while she had access to a lawyer for one hour at best;
vii.he, at all times, knew that she had poor English and yet arranged for a lawyer for her, but no translator or interpreter for her and then proceeded to pay for the lawyer; and
viii.he took control of the subject document from his lawyer, controlled the subject document until the last minute when he needed to hand it over and then regained control immediately thereafter by depriving her of any opportunity to truly get independent advice from a lawyer that spoke her language or that would use a translator.
The husband submits that none of the necessary characteristics of undue influence (actual or presumed) were present at the time of the execution of the subject document by the wife.
The Court accepts that it is likely that the wife executed the subject document under the influence of the husband. The Court accepts that the wife would not have executed the subject document unless the husband had asked her to do so. The question, however, is whether the evidence establishes that any such influence was undue.
The wife says that she was not sufficiently proficient in the English language to understand the subject document in July 2011. The Court is satisfied that the wife did have a sufficient understanding of the terms of the subject document when she signed it.
The Court accepts that the wife could read English to a reasonable degree but needed assistance from those more qualified in English to assist her and to have access to electronic forms of translation. The Court is satisfied, on the evidence of both parties, that the wife did not see the subject document, itself, until she attended upon Mr D, being the very day she signed it. The Court, however, accepts that she, on her own evidence, stated that Mr D read out the terms of the subject document to her in English and that she did not raise any issue of a lack of understanding with its expressed terms or her lack of English language skills.
The Court is of the view that the husband signed the subject document on or before 13 July 2011 and received that document in an envelope. That document remained with him. The Court accepts that the wife did not see that document at that time, but only when she was presented with it by Mr D. The husband drove the wife to Mr D’s office on 21 July 2011 and Mr D then produced an envelope containing the subject document. The Court accepts the wife’s evidence that Mr D did not give a legal explanation of the subject document to her in terms that she understood, specifically its binding nature, if he provided a certificate of independent advice and also the advantages and disadvantages to her of signing the subject document. The Court accepts that the wife signed the subject document in the absence of that advice. The subject document was then placed in an envelope, which the husband took possession of when he attended at Mr D’s office to pick up the wife and to pay for Mr D’s fees, which he did.
The relationship between a husband and wife is not one presumed to be a relationship of influence, at law. Therefore, it is necessary for the wife to prove that the husband exerted actual undue influence in order to have her sign the subject document. Dixon J explains the elements that must be met in proving actual undue influence in Johnson v Buttress (1936) 56 CLR 113 at page 134 as follows: “…facts must be proved showing that the transaction was the outcome of such an actual influence over the mind of the alienor that it cannot be considered his free act”.
The Court is of the view that, while the husband exerted a degree of influence over the wife, and without such influence, the wife would not have signed the subject document, she cannot be said to have lacked the requisite freedom necessary for a finding of actual undue influence.
The Court is of the view that, on the evidence before it, the husband’s delivery of the wife to Mr D’s office for him to discharge his duties owed to her was sufficient to overcome any issue of undue influence.
Unconscionability
The husband maintains that none of the elements of unconscionability have been made out. While acknowledging an inequality of bargaining power, the husband submits that that is, in itself, inadequate to prove unconscionability, and what is required is to demonstrate that the wife was in a position of “special disadvantage”. The husband maintains that the wife was not ill, nor was her mental health or intellect impaired and that she was not the subject of a threat or inducement. The husband maintained that her pregnancy, in itself, did not create a category of special disadvantage.
The wife relies upon a lack of familiarity with the English language in support of the suggestion that she was at a special disadvantage in the transaction. While the husband gave evidence as to the discussions he had had with the wife about the nature and content of the subject document and her own writings suggest that she had some understanding of the nature of the subject document at a later point in time, the Court is satisfied that the wife did not have a proper understanding of the “binding” legal effect of the subject document at the time she signed it and the Court is satisfied, on the wife’s evidence, that Mr D’s intervention did not overcome that position.
Mr Santisi has referred the Court to the decision of Davies J in Parras Holdings Pty Ltd v Commonwealth Bank of Australia [1997] FCA 1107 where his Honour said:
“To vitiate consent, the duress or compulsion must be of such a nature, illegitimate or unconscionable, as of itself to vitiate consent. The equitable principle of unconscionable conduct as illustrated in [Commonwealth Bank of Australia Ltd v Amadio] requires rather the unconscientious taking advantage of a person in a position of special disability or special disadvantage. Although the term “unconscionable” is used in both principles, it has in each a somewhat different operation. In the equitable principle, the term “unconscionable” refers to the nature of the advantage taken of a person in a position of disability or special disadvantage.”
In the Commercial Bank of Australia v Amadio decision, Mason J noted:
“Relief on the ground of unconscionable conduct will be granted when unconscientious advantage is taken of an innocent party whose will is overborne so that it is not independent and voluntary, just as it will also be granted when such advantage is taken of an innocent party who though not deprived of an independent and voluntary will, is unable to make a worthwhile judgment as to what is in his best interests (at 462)."
Similarly, Deane J also noted: “The whole transaction should properly be seen as flowing from the special disability which was evident to the bank and as being unfair, unjust and unreasonable”.
In Garcia v National Australia Bank Ltd (1998) 194 CLR 395, the High Court of Australia held that the law of unconscionability, as established in Commercial Bank of Australia v Amadio, did not disturb the rule in Yerkey v Jones (1939) 63 CLR 649, and instead, both of those were considered as distinct doctrines. Gaudron, McHugh, Gummow and Hayne JJ held, in Garcia, that the rationale of Yerkey v Jones was “not to be found in notions based on the subservience or inferior economic position of women”, nor was it “based on their vulnerability to exploitation because of their emotional involvement, save to the extent that the case was concerned with actual undue influence”.
In Yerkey v Jones, the High Court of Australia concluded that the relationship between a husband and wife was not one of influence, and the fact that a wife may confer a voluntary benefit upon her husband raises no presumption in equity against such a transaction.
As the plurality in Garcia went on to say:
“So far as Yerkey v Jones proceeded on the basis of the earlier decision of Cussen J in The Bank of Victoria Ltd v Mueller, it is based on trust and confidence, in the ordinary sense of those words, between marriage partners. The marriage relationship is such that one, often the woman, may well leave many, perhaps all, business judgments to the other spouse. In that kind of relationship, business decisions may be made with little consultation between the parties and with only the most abbreviated explanation of their purport or effect. Sometimes, with not the slightest hint of bad faith, the explanation of a particular transaction given by one to the other will be imperfect and incomplete, if not simply wrong. That that is so is not always attributable to intended deception, to any imbalance of power between the parties, or, even, the vulnerability of one to exploitation because of emotional involvement. It is, at its core, often a reflection of no more or less than the trust and confidence each has in the other”.
The Court, further, accepts that in order to demonstrate unconscionability, it is necessary for the Court to find that the husband knew and took advantage of a special disadvantage of the wife, asserted to be her poor English language skills.
In Weldon v Asher, Thackray CJ stated at paragraph 95:
“It may well be true, as Lord Radcliffe said, that “‘unconscionable’ must not be taken to be a panacea for adjusting any contract between competent persons when it shows a rough edge to one side or the other” (Bridge v Campbell Discount Co. Ltd [1962] AC 600 at 626). However, given what I perceive to be the manifest differences in factors underpinning commercial contracts and those underpinning agreements between prospective spouses it may well be entirely appropriate for the grounds for relief to be “just a little” wider than those applying in the commercial sphere, as the Democrat amendment intended. (Lady Hale in her dissenting judgment in Radmacher (formerly Granatino) v Granatino [2010] UKSC 42 identified, at [135], the competing arguments and concluded, in effect, that it is for Parliament to determine where the line is to be drawn. Her Ladyship also went on, at [175], to convincingly explain why “marriage is not only different from a commercial relationship in law, it is also different in fact”).”
The Court is of the view that, in ensuring the wife had the benefit of Mr D’s legal services and the independent advice that he was to provide, the husband could not be said to have taken advantage of the wife’s poor English skills in an unconscionable way. There was no evidence that he had directed Mr D not to have an interpreter available for the wife, noting that his evidence was that the wife had an appropriate grasp of the English language, at that time. Given that the nature of the advice actually given by Mr D is questioned and disputed by the wife (and noting that the husband can provide no evidence about that, save for his reliance on Mr D’s certificate), in the absence of Mr D (as there was no testing of any of his evidence), the Court accepts the wife’s evidence that Mr D’s advice was deficient, particularly, as there was no interpreter provided to enable her to have any understanding as to what, in fact, he said so as to provide to the Court evidence that she understood the binding nature of the subject document and the effect of his provision of a certificate under s.90G in ousting the jurisdiction of the Court and, further, that there were advantages and disadvantages to her in respect of her rights under the Act. The husband, however, cannot be said to have had any knowledge of Mr D’s asserted failures to discharge his duty to the wife, in that regard. In this way, the husband cannot be said to have taken advantage of the wife’s poor English language skills, in an unconscionable way.
The Court has some difficulty in seeing how the husband’s conduct, in waiting for the wife to come out of Mr D’s office and then going in to pay the account and taking possession of the subject document could be seen as unconscionable in terms of how the subject document came to be signed. All of those events occurred after the wife’s execution of the subject document in Mr D’s presence. If the wife had kept her copy of the subject document, she would have been in a position to have it then translated or interpreted. However, that is irrelevant, as she had already signed it.
Mr Santisi further submits that the subject document itself provided (in paragraph 11 of that document) for the husband to borrow on the former matrimonial home without the wife’s consent or approval, thereby practically removing any equity/interest in that property. Mr Santisi submitted that that was further proof of unconscionability. Mr Santisi submitted that the subject document should have provided for the wife to give her consent or approval prior to any borrowing. Mr Santisi, by inference, argues that Mr D’s failure to negotiate such a provision, or to raise it with the wife, was further evidence of a failure to explain the subject document or to act in her best interests. However, the severity of the subject document itself would not give rise, without more, to a claim of unconscionability. The Court accepts that the mere fact that, in retrospect, the wife may consider that she entered into an imprudent bargain would fall well short of satisfying the test that the bargain itself was secured through unconscionable conduct (see Saintclare).
Other provisions
In relation to s.90K(1)(c) of the Act specifically, the Court notes that while the wife’s submissions make reference to it, no evidence and no submissions were directed to the matters arising under that provision.
Further, while the wife’s submissions make reference to s.90K(1)(d) of the Act, similarly, no evidence and no submissions were directed to the matters arising under that provision. However, the Court specifically notes in regard to that section, the following.
Ryan J considered in Saintclaire s.90K(1)(d) of the Act and applied the test formulated by Le Poer Trench J in Pascot & Pascot [2011] FamCA 945. Ryan J said (at paragraph 119):
His Honour formulated the test thus:
For the purposes of section 90K(1), it would be useful to adopt the test in the following terms:
a) There must be circumstances that have arisen since the making of the Binding Financial Agreement, being circumstances of a material nature relating to the care, welfare and development of a child of the marriage;
b) It must be demonstrated that the child or the applicant, if she has caring responsibility for the child, will suffer hardship if the court does not set the agreement aside;
c) The court may set the agreement aside if it considers it appropriate and make such orders under section 90K(3) as it deems appropriate.
In relation to “material change”, Ryan J adopted Le Poer Trench J’s view (at paragraph 120):
….his Honour said that such a change would have to be “…substantial, significant and relevant”, that is, relevant to the care, welfare and development of a child (of the marriage).
In Saintclaire, her Honour was not satisfied that the wife in that case established her claim that there had been a “material change” because the circumstance she relied on, being a move outside the Sydney metropolitan area, was consistent with an intention she had made plain before the financial agreement was signed.
In the matter of Pascot, the wife sought to set aside a section 90C financial agreement. At the time the agreement was entered into, the parties were the parents of one child and the prospective parents of a second. No consideration was given in the agreement to the possibility of the parties having a third child, nor was there any evidence that this possibility was discussed during the negotiations between the parties. His Honour, therefore, considered that the birth of a third child, not contemplated at the time the agreement was entered into, constituted a “material change of circumstances”.
Since the subject document was entered into, the parties had the child (being the only child of their relationship), have separated and divorced. In Recital C to the subject document, the parties clearly considered the birth of the child.
The Court is not satisfied on the evidence that, if the financial agreement stands, it will adversely affect the mother’s relationship with the child and cause hardship.
Accordingly, the Court is of the view that the subject document is a valid financial agreement, otherwise, enforceable between the parties.
The Court must now consider whether the financial agreement is a binding financial agreement.
Is the agreement evidenced by the subject document binding, in terms of the Act?
Having considered the wife’s position concerning whether she understood the terms of the subject document, the Court notes that Recital K to the subject document states that:
“Separate legal representatives have advised each party independently before executing this agreement concerning the following matters:-
a.The effect of the agreement on the rights of the parties to apply for an order under the Act;
b.Whether or not, at that time, it was to the advantage, financially or otherwise, of each party to enter into the agreement.”
For the reasons set out herein, the Court is not satisfied that the wife received the explanation and advice the subject of Recital K and, in particular, that the effect of the agreement was to oust the jurisdiction of the Court.
There was no provision in the subject document which, itself, stated that the Court’s jurisdiction was ousted in terms of the parties’ agreement to that position to satisfy the Court that the wife would have read and understood the same herself. The ouster flows from the effect of the subject document being construed as a binding financial agreement pursuant to s.90G of the Act. That ouster is the matter upon which specific legal advice needed to have been given. That advice should have gone to the advantages and disadvantages of proceeding to implement a financial agreement which is binding so as to exclude the jurisdiction of the Court.
There must be compliance with s.90G of the Act for a financial agreement to be binding. Section 90G is as set out in paragraph 18 above.
Strickland J in Senior & Anderson referred to the distinction in the legislation between agreements which are “financial agreements” and those financial agreementswhich are “binding” at paragraph 94:
The Act in effect draws a distinction between agreements which are financial agreements (s4, s90B, s90C, s90D) and those financial agreements which are binding (s90G). Financial agreements can, like any other agreement, govern the actions of the parties to them and bind the parties to obligations, but do not oust the jurisdiction of the court. Parties to an agreement that satisfies the definition of “financial agreement” are bound by its terms (or not bound as the case may be), just as they would be bound (or not bound) by any other agreement (s 90K)…
His Honour noted that s.90G is not relevant in respect of the contractual rights and remedies of the parties. If an agreement satisfies the definition of “financial agreement”, s.90G becomes relevant in determining whether the agreement is effective to bar claims by either party pursuant to Part VIII of the Act (s.71A) which will be the case “if and only if” it is “binding” within the meaning of s.90G.
The Court accepts that s.90G requires the intervention of two legal practitioners providing independent advice to each party. As stated above, certificates confirming the provision of independent legal advice for the husband and the wife prior to the signing of the subject document, signed by Ms Arthur and Mr D, respectively, have been adduced as part of Exhibit “4”.
The onusof proving that the financial agreementis binding lies with the husband, in accordance with the decision of the Full Court in Hoult. The husband must establish the existence of the matters set out in s.90G, including the giving of the requisite legal advice to both parties. The Court is entitled to accept the signed certificates of independent legal advice as, prima facie, evidence that the advice has been provided. It is not necessary to ascertain the content of the legal advice. The Court accepts that s.90G does not require an exchange of documents, evidencing a financial agreement, only that a signed statement by the legal practitioner providing advice was given to each party and a copy of that statement was provided to the other party or their legal representative. Such a statement (being the evidence of the advice given) may be provided either before or after signing the agreement, but the advice itself must be given before the agreement is signed.
The Court accepts that, if it is satisfied that a statement complying with s.90G(1)(c) is provided, then that is presumptive of the actual giving of independent legal advice under s.90G(1)(b). Of course, that presumption can be rebutted: see Weldon and Asher (at paragraphs 150 to 156). Once the party seeking to rely on the agreement adduces in evidence such a certificate, there is an obligation on the other party to adduce evidence which would disprove, or at least throw into doubt, the inference or conclusion to be drawn from the certificate.
No file was produced from the husband’s solicitors. No affidavit from those solicitors has been produced to explain the absence of such a file. What is produced, is Exhibit “F”, being an invoice to the husband from his lawyers Webb Thom which indicates they ceased any involvement with him on 12 July 2011 and that they never wrote to the wife’s lawyers or were, otherwise, involved in any exchange of correspondence with them concerning the terms of the subject document or, indeed, were involved in sending the subject document to Mr D or receiving anything from him. There was no item of work evidencing the delivery of the certificate signed by Ms Arthur to the wife or to her legal representative.
Mr Santisi submits that Mr D’s file reveals that no translator or interpreter was used which, he says, given the intended and complex nature of the subject document involved was a bare minimum when dealing with a non-national with little or poor English language abilities. Mr Santisi submits that the Court, taking Mr D’s file as it is and having regard to the poor English speaking and reading ability of the wife, as apparent in Court, would have no hesitation in concluding that s.90G(1)(b) had not been complied with.
The husband submits that the wife’s command of the English language is substantially worse since she left Australia and her language skills, as demonstrated in Court, were not consistent with those at the time of her execution of the subject document. The wife also gave evidence that she had disguised her lack of English so as to avoid embarrassment. She refers to asking Mr D about the formula in clause 11. She also informed Mr D that she was expecting a child. Mr D, on her affidavit evidence, read out the entirety of the agreement “verbatim”. This, in itself, is a Latin expression, more likely utilised by a lawyer than by the wife, herself. Often, where issues as to fluency in English are concerned, it may not be helpful to have lawyers draft affidavits, particularly, in terms of their use of “legal speech”. Nevertheless, that is what the wife affirmed to. For the wife to depose to this, means that she must have had an understanding of the document to be able to say that Mr D read out its contents in their entirety. The wife conceded that Mr D, specifically, asked the wife about her jewellery and its value. The wife, at no time in her evidence, raises any concerns or lack of understanding with Mr D. These matters raise significant concern for the Court as to what would have put Mr D on alert to arrange for an interpreter or translator to be present. The difficulty is that the wife did not seek to examine Mr D. Her examination of Mr D may have ventilated these issues and provided an opportunity for Mr D to explain his position, particularly, in relation to assertions that his file was deficient in what one would expect to find in a file of that nature, that he was not independent of the husband (as he was paid by the husband) and that he had not provided independent legal advice to the wife, at all or if he had provided some advice, it was not in a form which she could understand.
The wife’s evidence was, largely, to the effect that she had signed the subject document, but without any “real” understanding of its terms, given the lack of any explanation provided by Mr D. The husband said that he retrieved the subject document, being Exhibit “4”, from his lawyers file in order to get ready for the hearing of this matter. That, however, was inconsistent with his evidence that he had had that document in his possession since 2011. He then sought to suggest that it was in his and the wife’s possession. Clearly, Ms Arthur and Mr D could have given some evidence, potentially, about the substance of the subject document that they provided their certificates in relation to and as to whether there had been any discussion between them, or negotiation as to the terms of the subject document. Clearly, the memorandum of fees produced by Ms Arthur does not evidence any such discussion or negotiation with Mr D, itself.
Notwithstanding that it was the husband who subpoenaed Mr D, the wife says that she and her legal team had a legitimate expectation that he would be at Court to be called by either party, although, they submit that they learnt from the husband’s Counsel, in open Court, that the husband and his legal team had made a conscious decision to call him off without consultation or notice to the wife or her legal representatives. The transcript reveals that Ms Christie stated: “No, we have released Mr D from coming”. Mr Santisi submits that, as the subpoena was a Court order to attend, it was only the Court that could excuse Mr D. That, formally, is true, once a subpoena has been called upon. Notwithstanding that, no application was made by Mr Santisi to have a fresh subpoena issued or to contact Mr D to have him attend. Mr Santisi did state: “I will get 2 subpoenas ready for your Honour to approve”. Nothing, however, happened, in that regard.
The documents produced from Mr D’s file show a memorandum of fees for an attendance on 21 July 2011 and the provision of legal advice in the sum of $300.00, inclusive of GST, with some handwritten notes. Those handwritten notes appear to have writing in different pens. The notes record a conference time from 9:30am to 10:30am, being one hour. The wife’s evidence conflicted with this to the effect that she said the conference lasted about 10 to 15 minutes. Some of the notes are clearly in a shorthand form. It is unclear whether these are notes prepared by Mr D for himself, prior to seeing the wife, or notes of a discussion with the wife. The concluding time of 10:30am seems to have been added in a different pen. There is no letter written by Mr D to the wife, nor any document which would indicate that the matters referred to in Mr D’s notes were, in fact, discussed with the wife. The Court accepts Ms Christie’s submission that any concerns about the length of the conference between the wife and Mr D could not, in itself, ground a finding that the advice certified as given by Mr D, could not, in fact, have been provided, in the time contemplated.
Somewhat problematically, the s.90G certificate provided by Mr D states that he gave a copy of his certificate to the husband/legal practitioner for the husband. The husband said that he never saw Mr D on 21 July 2011, or at all, and had no recollection of receiving the certificate signed by him. This is a problem.
The fact that the husband paid Mr D’s fees does not, in itself, establish any lack of independence of Mr D. There is no evidence that Mr D was aware that the husband paid his invoice. The Court would accept from the evidence of both parties that Mr D did not have a pre-existing relationship with the husband and Mr D owed no duty of care to the husband. Both parties’ evidence was that the wife attended upon Mr D, in the absence of the husband.
Ms Christie submits that it is apparent from Mr D's file note (within Exhibit “3”) that he discussed the contents of the subject document with the wife. The file note for 21 July 2011 contains the notation “$1.07 mil net [1.07 million net] - satisfied with values.” Ms Christie says that, the fact that Mr D has made the notation “satisfied with values”, suggests an interaction with the wife whereby they went through the values ascribed to each piece of property and discussed whether or not she was satisfied that they represented appropriate figures. It is also clear, she says, that Mr D described what was to occur at the date of separation and made it plain to the wife that each would keep their separate property in the schedules, except in respect of the Property A property, where the husband would pay an amount calculated in accordance with a formula (clause 11 of the subject document). Underneath is the notation: “New mortgage risks - no Property A or funds all put into other assets/mortgages - if Property A sold, new property joint names but little equity to divide”. Ms Christie accepted that on the construction of the formula, the husband could always borrow against the Property A property without consulting the wife, that these borrowings were always to be deducted from whatever equity existed, and that the wife could, under the application of the formula, end up receiving nothing. Ms Christie asserted that that was the very reason why Mr D addressed those elements of the subject document with the wife. Ms Christie submits that Exhibit “3” shows that that was accurate. However, Exhibit “3” does not show that. What Exhibit “3” shows is that Mr D made notes. One has to infer from those notes, discussions with the wife, who has denied any such discussions. Critically, Mr D’s evidence has not been sworn/affirmed or tested.
Ms Christie then put to the wife a number of questions which flowed from an assumption that the matters referred to in Mr D’s notes (as set out above) had, in fact, been discussed with her. These included that Mr D had explained to the wife the abovementioned formula and its associated risks, the new mortgage, and that if the Property A property was sold and a new property was acquired in hers and the husband’s joint names, but had little equity in it to divide, there was a risk of no monies being available to her. The wife denied that any of those matters had been discussed with her, or explained to her. Relevantly, Ms Christie did not put to the wife, nor did the handwritten notes of Mr D, indicate, any explanation as to the advantages and disadvantages (as referred to in Recital K of the subject document) for the wife in signing the subject document. This weighs in favour of the wife’s position.
Ms Christie submits that the wife’s reliance on her asserted lack of English language skills could not, even if established, touch on whether independent legal advice was provided, as she maintained it could only go to the issue of whether or not the wife understood the advice provided (not a matter falling for consideration under s.90G of the Act). The Court does not accept that proposition because s.90G of the Act provides for a legal practitioner to provide a signed statement that legal advice was given about the effect of the subject document on the rights of a party and about the advantages and disadvantages of making the agreement at the time the advice was provided. In those circumstances, if a legal practitioner could not be so satisfied that the recipient of that advice had the necessary ability to understand the advice, such a certificate could not be provided and a certificate so provided would be, otherwise, worthless.
The Court is satisfied that the wife has given evidence which rebuts the prima facie position standing on the face of Mr D’s certificate, see: Bilal & Omar [2015] FamCAFC 30.
On the face of her evidence, the Court is satisfied that the wife did not have any relevant understanding of the effect of the subject document on her rights under the Act, when she signed it, nor of the advantages or disadvantages of her doing so. The Court accepts that there is no evidence from Mr D (save his certificate) which would satisfy the Court that he explained these matters to the wife. The Court accepts that there is no evidence from anyone that the certificates of advice were translated to the wife in her own language or explained to her.
The wife submits that a Jones & Dunkell (1959) 101 CLR 298 inference should be made against the husband, that is, that the failure to call Mr D would not have assisted his case. The Court is of the view that an adverse inference arising from a parties’ failure to call a witness would only be drawn in circumstances where evidence, otherwise, provides a basis upon which that unfavourable inference can be drawn: see Gaskell v Denkas Butchery Services Pty Ltd (2008) NSWCA 35. Thus, as held by Campbell J in Manly Council v Byrne [2004] NSWCA123 at 51 & 52:
“…if a witness is not called, two different types of results might follow. The first is that the tribunal of fact might infer that the evidence of the absent witness, if called, would not have assisted the party who failed to call that witness. The second is that the tribunal of fact might draw with greater confidence any inference unfavourable to the party who failed to call the witness, if that witness seems to be in a position to cast light on whether that inference should properly be drawn.
Even though a jury should be directed without the availability of the inferences which are recognised by Jones v Dunkel, it is entirely a matter for the jury whether it actually draws one or both of those inferences: Café v Australian Portland Cement Co Pty Limited (1965) 83WN (NSW) (Pt 1) 280. Applying this principle to this situation of a trial judge alone, there is no compulsion on the trial judge to draw either of the Jones v Dunkel inferences."
In the circumstances of the husband’s release of Mr D, in terms of the subpoena issued to him by the Court, at the request of the husband, the Court is of the view that it was clearly the husband who had the onus to call Mr D because it is he who relies on the efficacy of Mr D’s certificate. The Court is of the view that, given the wife’s evidence (that she received no advice) and the paucity of the file material produced on subpoena from Mr D, a Jones v Dunkel inference should be made that Mr D’s evidence would not have assisted the husband. This weighs in favour of the wife’s position.
The husband stated that he had never received the certificate from Mr D, but then withdrew that assertion in circumstances where Mr Santisi submitted that he then understood the implications of his evidence given the Court’s interjecture at the time of the question and answer. The husband’s evidence that he received no certificate from Mr D, being directly inconsistent with Mr D’s own certificate. The wife says that she never received the certificate of Ms Arthur (also inconsistent with Ms Arthur’s own certificate) and was given no documents by Mr D.
The Court is satisfied that the wife has disproved, or sufficiently thrown into doubt, the inference or conclusion to be drawn from the certificate provided by Mr D.
The Court finds that the agreement contained in the subject document is not binding on the parties as the requirement for independent legal advice (as to the effect of the subject document on the rights of the wife to apply for an order under the Act and whether or not, at the time, it was to the advantage, financially or otherwise, of the wife to enter into the subject document) provided for in s.90G(1)(b) of the Act has not been satisfied. The Court is further satisfied that the relevant certificates provided by Ms Arthur and Mr D, as to their provision to the other party/legal representative for the other party at the time they were prepared, appear not to be factually correct and not consistent with both parties’ evidence. Further, the Court is satisfied that there is such a confusion surrounding the terms of each party’s solicitor’s compliance with the obligations under s.90G of the Act, that the Court is not satisfied that there has been a relevant compliance with those provisions for the subject document to be given the status of “binding” legal effect.
Notwithstanding Ms Christie’s submissions in terms of s.90G(1A) of the Act, the Court is not satisfied that the above defects could be cured by the provisions of s.90G(1A)(b) of the Act, as there were no other matters (save the fact that the subject document sought to protect, through exclusion, property owned by the husband at the time of marriage and that the parties were married for about 5 months) to ground a finding that it would be "unjust and inequitable", if the agreement was not found to be binding. The Court accepts that the husband’s borrowing against the Property A property could be considered on any property application in terms of s.79 of the Act, so as to determine what is ultimately a just and equitable outcome between the parties.
Conclusion
The Court is of the view that the agreement, as set out in the terms of the subject document, is a financial agreement pursuant to s.90B of the Act, but is not binding pursuant to s.90G of the Act.
Orders will be made to implement the Court’s conclusion and the matter will be listed for a date for mention with respect to the wife’s property application.
I certify that the preceding one hundred and sixty (160) paragraphs are a true copy of the reasons for judgment of Judge Kemp
Date: 11 July 2017
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