Harris & Cameron
[2024] FedCFamC2F 1033
•1 August 2024
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Harris & Cameron [2024] FedCFamC2F 1033
File number(s): ADC 812 of 2022 Judgment of: JUDGE PARKER Date of judgment: 1 August 2024 Catchwords: FAMILY LAW – FINANCIAL AGREEMENT – whether each of the parties each received independent legal advice as required by subsection 90UJ(1)(b) of the Family Law Act 1975 (Cth) – whether unjust or inequitable if agreement were not binding on the parties pursuant to section 90UJ(1A) of the Family Law Act 1975 (Cth) Legislation: Evidence Act 1995 (Cth) s 140
Family Law Act 1975 (Cth) ss 90SF, 90SM, 90UC, 90UJ, 90UM
Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) rr 8.15(3)(e), 12.13(3)(b)
Cases cited: Abrum & Abrum [2013] FamCA 897
Bachman & Donohue [2021] FedCFamC1F 240
Bevan & Bevan [2013] FamCAFC 116; (2013) FLC ¶93-545
Briginshaw v Briginshaw [1938] HCA 34; (1938) 60 CLR 336
Browne v Dunn (1893) 6 R 67 HL
Chancellor & McCoy [2016] FamCAFC 256; (2016) FLC ¶93-752
Corelli & Beroni (No 3) [2024] FedCFamC1F 327
Fewster & Drake [2016] FamCAFC 214; (2016) FLC ¶93-745
Fielding & Nichol [2014] FCWA 77; (2014) FLC ¶93-617
Graham & Squibb [2019] FamCAFC 33; (2019) FLC ¶93-892
Hoult & Hoult [2013] FamCAFC 109; (2013) FLC ¶93-546
Jacks & Sampson [2008] FamCAFC 173; (2008) FLC ¶93-387
Kaimal & Kaimal [2020] FamCA 971
Kostres & Kostres [2009] FamCAFC 222; (2009) FLC ¶93-420
LC & TC [1998] FamCA 47; (1998) FLC ¶92-803
Logan & Logan [2013] FamCAFC 151; (2013) FLC ¶93-555
MWJ v R [2005] HCA 74
Parker & Parker [2012] FamCAFC 33; (2012) FLC ¶93-499
Piper & Mueller [2015] FamCAFC 241; (2015) FLC ¶93-686
Raleigh & Raleigh [2015] FamCA 625
Re Budziszewski & S's Bill of Costs, Hall & Hall & Barrett [1982] FamCA 75; (1982) FLC ¶91-280
Senior & Anderson [2011] FamCAFC 129; (2011) FLC ¶93-470
Stanford & Stanford [2012] HCA 52; (2012) 247 CLR 10
Wallace & Stelzer & Anor [2013] FamCAFC 199; (2013) FLC ¶93-566
Watkins & Combes [1922] HCA 3; (1922) 30 CLR 180
Watson & Ling [2013] FamCA 57; (2013) FLC ¶93-527
Whereat and Anor v Duff [1972] 2 NSWLR 147
Whittle & Whittle [2023] FedCFamC1F 771
Division: Division 2 Family Law Number of paragraphs: 187 Date of hearing: 15-17 July 2024 Place: Adelaide Counsel for the Applicant: Mr Anderson Solicitor for the Applicant: Clark Panagakos Family Law Counsel for the Respondent: Mr Tredrea with Mr Rowley Solicitor for the Respondent: Jordan & Fowler Family Lawyers ORDERS
ADC 812 of 2022 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: MS HARRIS
Applicant
AND: MR CAMERON
Respondent
ORDER MADE BY:
JUDGE PARKER
DATE OF ORDER:
1 AUGUST 2024
THE COURT DECLARES THAT:
A.The financial agreement entered into between the parties on 13 August 2013 is binding on the parties.
THE COURT ORDERS THAT:
1.The parties each forthwith do all acts and things required to place the property known as and situate at B Street, Suburb C in the state of South Australia, being the whole of the land comprised and described in certificate of title register book volume … folio … (‘the Suburb C property’) on the market for sale with such agent as may be agreed between the parties within seven (7) days of the date of this order and in default of agreement, with D Real Estate.
2.That upon settlement of the sale of the Suburb C property, the proceeds of sale be distributed in the following order:
(a)In payment of the costs and disbursements associated with the sale;
(b)In payment of the mortgages registered over the title;
(c)The balance to be distributed in portions of:
(i)40 percent to the De Facto Wife; and
(ii)60 percent to the De Facto Husband.
3.Forthwith upon the making of these orders, the De Facto Husband do all acts and things required to cause the sum of $55,000 to be paid to the De Facto Wife from the parties’ joint offset account number ending #...00.
4.Forthwith upon the making of these orders, the De Facto Husband deliver up to the De Facto Wife the following items:
(a)foot stool;
(b)woven mat;
(c)wooden door;
(d)antiques; and
(e)easel.
5.All extant applications are otherwise dismissed.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Part XIVB of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish an account of proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under a pseudonym has been approved pursuant to subsection 114Q(2) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
JUDGE PARKER:
INTRODUCTION
The applications before the Court relate to a financial agreement entered into between the Applicant De Facto Wife, MS HARRIS (‘the De Facto Wife’) and the Respondent De Facto Husband, MR CAMERON (‘the De Facto Husband’) (collectively ‘the parties’) pursuant to section 90UC of the Family Law Act 1975 (Cth) (‘the Act’) on 13 August 2013 (‘the Agreement’).[1]
[1] Wife’s trial affidavit, annexure MSH6.
The De Facto Wife sought a declaration that the Agreement was binding on the parties and orders to enforce its terms. The orders she sought by way of enforcement were, in summary, for the sale of a property owned by the parties as tenants in common in unequal shares at B Street, Suburb C, South Australia (‘the Suburb C property’) and a distribution of the net sale proceeds in proportions of 40 percent to her and 60 percent to the De Facto Husband; payment of the sum of $55,000 to her, representing funds she had deposited into a joint offset account held in the joint names of the parties; and delivery up of a small list of chattels to her.
The De Facto Husband sought to depart from the terms of the Agreement and sought orders pursuant to section 90SM of the Act. Although the relief sought by the De Facto Husband was framed in terms of ‘setting aside’ the Agreement, it was clear from that manner in which he presented his case, that rather than having it set aside under section 90UM of the Act, he in fact sought a finding that the Agreement was not binding by reason of failure to comply with the requirements of subsection 90UJ(1)(b).
The trial proceeded in relation to all matters, including the De Facto Husband’s application for orders pursuant to section 90SM of the Act, though it was understood by all parties that the outcome of the parties’ respective positions in relation to the Agreement would determine whether it was necessary for the application pursuant to section 90SM to be determined.
The De Facto Wife was born in 1968 and was aged 56 at the time of the trial. At the time of the trial she was on long service leave from her longstanding role as an educator at half pay, following which she deposed that she planned to retire as a result of workplace-related mental health concerns. The De Facto Husband was born in 1958 and was aged 66 at the time of the trial. His usual occupation was a builder, though his evidence was that he was not in receipt of income at the time of the trial.
The parties commenced living together between their respective residences in or around early 2013 and formally commenced living together later that year. They separated in June 2021 after a relationship of approximately eight and a half years’ duration. There are no children of the relationship. Both parties have adult children of previous relationships.
MATERIAL RELIED ON
The De Facto Wife relied on the following documents:
(a)Amended Initiating Application filed 1 November 2023;
(b)Trial affidavit filed 1 November 2023;
(c)Affidavit in Reply filed 1 December 2023;
(d)Updating Affidavit filed 17 June 2024;
(e)Financial Statement filed 17 June 2024; and
(f)Case Outline filed 11 July 2024.
The De Facto Husband relied on the following documents:
(a)Amended Response to Initiating Application filed on 27 February 2023;
(b)Trial affidavit filed 28 November 2023;
(c)Updating Affidavit filed 10 July 2024;
(d)Financial Statement filed 10 July 2024; and
(e)Case Outline filed 12 July 2024.
The operation of rule 8.15(3)(e) of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) (‘the Rules’) was dispensed with and the annexures to the affidavits filed by each of the parties were accepted into evidence. Each of the parties also tendered documents throughout the course of the trial. Although each and every aspect of the evidence relied upon by the parties has not been referred to in these reasons, I have had regard to the totality of the evidence before the Court and the submissions made on behalf of each of the parties.
ISSUES FOR DETERMINATION
The De Facto Husband’s case was that neither of the parties had received independent legal advice as to the matters set out in subsection 90UJ(1)(b) of the Act, as a consequence of which, the Agreement was not binding. He sought consequential orders pursuant to section 90SM of the Act providing for a distribution of the parties’ net assets and liabilities in proportions of 60 percent to the De Facto Wife and 40 percent to him, representing an assessment of 35 percent of the parties’ overall contributions in his favour and a 5 percent adjustment in his favour pursuant to section 90SF(3) of the Act.
The De Facto Wife’s case was that each of the parties had received the requisite advice and that the Agreement was binding as a consequence. In the alternative, she contended for a determination pursuant to subsection 90UJ(1A)(c) of the Act that it would be unjust and inequitable if the Agreement were not binding on the parties and a consequential declaration pursuant to subsection 90UJ(1B) that the Agreement was binding. As a further alternative, she sought a determination that it was not just and equitable to adjust the parties’ interests in property pursuant to the principles laid out by the High Court of Australia in Stanford & Stanford,[2] as interpreted and applied in subsequent authorities.[3]
[2] [2012] HCA 52; (2012) 247 CLR 108.
[3] Including Bevan & Bevan [2013] FamCAFC 116; (2013) FLC ¶93-545; Chancellor & McCoy [2016] FamCAFC 256; (2016) FLC ¶93-752; Watson & Ling [2013] FamCA 57; (2013) FLC ¶93-527; Fielding & Nichol [2014] FCWA 77; (2014) FLC ¶93-617; and Corelli & Beroni (No 3) [2024] FedCFamC1F 327.
Accordingly, the issues for determination by the Court were:
(1)Was the requirement as to independent legal advice as set out at subsection 90UJ(1)(b) of the Act complied with?
(2)If the answer to (1) is no, is the Court satisfied that it would be unjust and inequitable if the Agreement were not binding on the spouse parties as provided for in subsection 90UJ(1A)(c)?
(3)If the answer to (2) is no, what orders should be made pursuant to section 90SM of the Act?
THE PARTIES AND THEIR EVIDENCE
The De Facto Wife gave her evidence in a calm manner which was responsive to the questions asked of her. She impressed as a truthful witness. Her evidence was credible and was consistent with independent documentary evidence.
The De Facto Husband was also calm throughout his evidence and although the answers he gave were not always responsive to the questions asked of him, this did not appear to be intentional. He presented as confused at times and parts of his evidence were internally inconsistent. There were some aspects of his evidence that appeared crafted or exaggerated in order to promote his desired outcome and some aspects of his evidence which were inherently implausible, which are discussed later in these reasons. He did not present as a reliable historian. As a consequence, his evidence appeared less reliable than that of the De Facto Wife.
In accordance with section 140 of the Evidence Act 1995 (Cth) (‘the Evidence Act’), all findings of fact in this judgment are made on the balance of probabilities.
THE AGREEMENT
The Agreement was entered into between the parties on 13 August 2013. It was signed by both of them.
Recitals[4] to the Agreement recorded, relevantly, that the parties intended the Agreement to deal with the whole of their property and financial resources at the time of the Agreement and in the future in the event of the breakdown of their relationship, and that the parties intended the terms of the Agreement to be given effect by any court having jurisdiction to determine financial matters in issue between them pursuant to the Act.
[4] Recitals H and J.
The operative part of the Agreement recorded that the parties each held ‘separate property’ as set out in Annexure A (in the case of the De Facto Wife) and Annexure B (in the case of the De Facto Husband). ‘Separate property’ was defined, relevantly, to include property acquired before cohabitation or after separation, property acquired in exchange for any separate property or an increase in the value of any separate property, all income and other gains derived from separate property for whatsoever reason and the increase in value of all separate property for whatsoever reason.[5]
[5] Clause 2.
The Agreement further provided that ‘joint property’ was all property not defined as separate property, and indicated an intention that the parties would purchase a joint property as tenants in common in Region E, in relation to which their contributions would be agreed and contracted as tenants in common with an agreed percentage of ownership, and that they would contribute from their separate incomes towards mortgage repayments with respect to such a property. The Agreement recorded that the parties would maintain a running schedule (to be recorded in Annexure C) of joint assets including their purchase prices and dates acquired.[6]
[6] Clause 3.
Clause 4 of the Agreement provided, in summary, that:
(a)the parties would contribute to their everyday living expenses as they agreed from time to time;
(b)any property acquired or borrowings undertaken by the parties would be recorded in writing or by title documentation to be the asset or liability of one or both of them;
(c)before executing the Agreement, each of the parties had had regard to the possibility of changes in their circumstances, including illness or injury, unemployment, increases or decreases in the value of their separate property, and separation; and
(d)the parties had an account to which a debit card was attached, which would be used by both of them.
The Agreement recorded that separation would occur when the parties had been living separately for no less than three months and one party notified the other in writing that they intended to end the relationship.[7]
[7] Clause 5.
In the event of the breakdown of the parties’ de facto relationship, the Agreement provided that each party would remain individually entitled to their separate property; joint property would be divided between them in accordance with their entitlements as evidenced in writing or title documentation; and in the event of failure to agree as to who was to retain any real property, such property was to be sold on terms as specified in the Agreement, with the net proceeds to be divided in accordance with their ‘tenants in common contract.’[8]
[8] Clause 6.
Importantly, in light of the dispute which subsequently arose between the parties, clause 9 of the Agreement provided as follows:
The parties each state and warrant to the other party that as recorded in this agreement and as certified in an annexure to this agreement that before this agreement was signed by him or her, he or she was provided with independent legal advice from a legal practitioner on the following matters:
i.The effect of the agreement on the rights of that party; and
ii.The advantages and disadvantages, at the time that the advice was provided to the party, of making the agreement.
Clause 14 provided that each party would from time to time do all things (including executing all documents) necessary or desirable to give full effect to the Agreement.
Annexed to the Agreement were statements of legal advice executed by solicitors for each of the parties in accordance with subsection 90UJ(1)(c) of the Act. In the case of the De Facto Wife, this was MR F, and in the case of the De Facto Husband, MR G. Each of the statements recorded:
I provided my client with independent legal advice prior to entering into this agreement as to the following matters:
a)The effect of this agreement on the rights of the parties; and
b)The advantages and disadvantages, at the time that the advice was provided, to my client of making this agreement.
Each statement also recorded the words ‘I am not acting for the other party to this deed’ and ‘I have explained to my client the legal implications of this Deed in the absence of the other party to the Deed.’
The Agreement had annexed to it, in relation to each party, an annexure setting out their ‘separate property,’ being:
Annexure A
Assets of Mr Cameron Estimated Value 1. H Street, Suburb J $1,350,000 to $1,450,000 2. Superannuation (details) Currently being matured and will be paid into Mr Cameron's home mortgage – B Street, Suburb J $35,000 3. Probate of Mr Cameron's late father’s estate to be advised by the public trustee, the total will be paid into Mr Cameron’s home mortgage for B Street, Suburb J TBA 4. Motor Vehicle 1 $30,000 5. K Pty Ltd including K Pty Ltd Trust, see tax returns as per current value Total Assets $ Liabilities of Mr Cameron Estimated Value 1. Mortgage at B Street, Suburb J after Mr Cameron has paid his superannuation proceeds $275,000 approx. Total Liabilities $ Total Net Assets of Mr Cameron $ Annexure B
Assets of Ms Harris Estimated Value 1. L Street, Town M, SA (investment property) $275,000 2. Motor Vehicle 2 $5,000 3. Property Settlement Orders dated 2009 between Ms Harris and Mr N $700,000 to $900,000 4. Superannuation $100,000 5. Any future separation package or other employment related entitlement TBA 6. Any future compensation or other entitlement to which she may be beneficially entitled TBA 7. Any future bequest or inheritance TBA 8. Painting $15,000 Total Assets $ Liabilities of Ms Harris Estimated Value 1. Mortgage of L Street, Town M SA $220,000 Total Liabilities $ Total Net Assets of Ms Harris $
The terms of the Agreement included that the parties had agreed to the values contained in the annexures and acknowledged that they were estimates. The omissions appearing in the annexures as recorded above appeared in the original.
The evidence before the Court did not include evidence given by either of the solicitors who signed the statements of legal advice, copies of any letters of advice, or copies of the solicitors’ files.
RELEVANT FACTUAL BACKGROUND
There were limited areas of contention with respect to the relevant factual circumstances of the parties’ relationship.
At the time they entered into the Agreement in August 2013, the parties were living together across two residences and had been so doing since around the beginning of 2013. The Recitals to the Agreement record that they were living mostly at the De Facto Wife’s rented premises at O Street, Suburb P. Shortly after they entered into the Agreement, the De Facto Wife formally moved into a property owned by the De Facto Husband at H Street, Suburb J (‘the Suburb J property’).
At the time of entering into the Agreement, as recorded in Annexure B to the Agreement, the De Facto Wife held entitlements pursuant to orders made by consent in this Court (which was then known as the Federal Magistrates Court of Australia) in September 2009 between the De Facto Wife and her former husband, Mr N (‘the 2009 orders’).[9]
[9] Exhibit R12.
The major asset the subject of the 2009 orders was land at Town Q, South Australia (‘the Town Q property’) of which the De Facto Wife’s former husband was the registered proprietor but which was subject to a lease in favour of his mother which expired upon the earlier of late 2039 or the death of his mother. Pursuant to the 2009 orders, amongst other things, upon termination of the lease in favour of his mother, the De Facto Wife’s former husband was to pay her an amount equal to 30% of the value of the Town Q property, to be calculated as at the date of expiration of the lease.
At the time the parties formally commenced residing together in the Suburb J property, the De Facto Husband’s daughter Ms R, who was then approximately nine years of age, resided with the parties 50 percent of the time.
In or around mid-2013, the De Facto Husband received the sum of $230,000 by way of inheritance from his father’s estate. This entitlement had been recorded, but not quantified, in Annexure A to the Agreement. He applied those funds at his sole discretion to debts associated with the Suburb J property.
In early 2014, the De Facto Husband sold the Suburb J property for the sum of $1,425,000 and received net sale proceeds of $1,029,879.61.[10] Those proceeds were retained by him.
[10] Exhibit R5.
In or around early 2014, the De Facto Husband purchased the property at S Street, Suburb T (‘the S Street property’) for $582,500. Part of the proceeds of sale of the Suburb J property were applied to this purchase. The S Street property was purchased in the sole name of the De Facto Husband. Shortly after its purchase, the De Facto Husband subdivided the land. The parties moved into the existing residence. The De Facto Husband built a house on the land to which the newly created title related, being 1 U Street, Suburb T (‘1 U Street’).
In 2015, the De Facto Wife sold a property owned by her at L Street, Town M, South Australia (‘the Town M property’), and received net proceeds of $55,000, which she retained as savings for her sole benefit.
In or around 2015, the De Facto Husband’s daughter Ms R, who was then aged 11, commenced living with the parties on a full time basis.
In or around 2015, the De Facto Wife reduced her work hours. The De Facto Husband asserted that she reduced her workload to a 0.2 load, or one day per week. Although little turns on this, I accept the De Facto Wife’s evidence that she was in fact working two days per week, being a 0.4 workload, which is supported by records from her employer.[11] The De Facto Wife’s evidence was that she accessed some of her savings derived from the proceeds of sale of the Town M property to assist with her living expenses at this time, but was subsequently able to rebuild those savings. The De Facto Husband deposed that he ‘financially supported’ the De Facto Wife throughout this period. I do not accept this evidence, which is inconsistent with the preponderance of evidence before the Court as to the manner in which the parties structured their finances, as discussed later in these reasons.
[11] Exhibit A1.
In late 2016, the parties moved into the newly constructed residence at 1 U Street.
In early 2018, the De Facto Husband sold 1 U Street for $760,000. The sale proceeds were retained by him.
In or around 2018, the parties moved to a rented residence in Suburb V, South Australia, for proximity to a school for which the De Facto Husband’s daughter had attended. They shared the rental expense equally.
In mid-2018, the parties jointly purchased the Suburb C property, which was vacant land, for the sum of $739,206 including acquisition costs.[12] The parties were registered on title as tenants in common, with a 60 percent interest owned by the De Facto Husband and a 40 percent interest by the De Facto Wife.
[12] Exhibit R2.
Two loans totalling approximately $410,000 were jointly obtained by the parties and secured by mortgage against the title to the Suburb C property. Of the borrowed funds, the sum of approximately $293,000 was applied to the acquisition of the De Facto Wife’s 40 percent interest in the Suburb C property. The balance was intended to be used to fund the De Facto Wife’s share of future building costs. The surplus was paid into an offset account associated with the borrowings. The De Facto Husband applied his savings from the proceeds of sale of 1 U Street to the acquisition of his 60 percent interest in the property.
The De Facto Wife transferred the sum of $55,000, being mostly made up of the proceeds she had derived from the sale of the Town M property, into a joint offset account relating to the borrowings secured by the Suburb C property. Her evidence, which I accept, was that she increased her work hours in the lead up to the purchase of the Suburb C property in order to improve her borrowing capacity and her ability to service the mortgage debt.
The De Facto Wife made mortgage repayments from her income from the time of the purchase of the Suburb C property until around the end of 2020, at which time the repayments commenced being made from the funds that had been intended to be used to fund her share of the build. By the time of the trial, the two loans had a combined balance of $317,147.
The De Facto Wife’s affidavit evidence was that she had paid a total of $98,322 in mortgage payments and other expenses towards the Suburb C property after its purchase, though she accepted under cross-examination that she had ceased making the mortgage payments slightly earlier than she had originally specified, meaning that the payments made by her had been less than the amount she had calculated.
Prior to their separation, the parties paid the rates, taxes and other costs associated with the Suburb C property in accordance with the proportions of their ownership of the property. They paid preparatory costs associated with an intended build on the land, which came to a total of $62,030, in the same proportions.
In 2019, the De Facto Husband commenced part-time work as a tradesperson.
From 2019 to 2022, the De Facto Wife was in receipt of WorkCover payments at 80 percent of her usual income as a consequence of work-related anxiety and depression.
In 2019 or 2020, the parties moved back into the S Street property.
In early 2020, the De Facto Husband made a WorkCover claim as a result of physical injuries.
On 7 June 2021, the De Facto Husband sold the S Street property for $660,000, receiving net proceeds of $645,544.32.[13] The proceeds were applied by him to the purchase of a property at U Street, Suburb T for the sum of $765,000.[14]
[13] Exhibit R3.
[14] Exhibit R4.
The parties did not ultimately purchase a property in Region E.
The parties separated in June 2021. The De Facto Wife initially commenced boarding in a property in Suburb W, South Australia, and subsequently obtained rental accommodation.
During that same month, the De Facto Husband withdrew the sum of $55,000 from an offset account associated with the borrowings relating to the Suburb C property, being the De Facto Wife’s savings, largely derived from the proceeds of sale of the Town M property. The De Facto Husband later returned these funds to the offset account. Having returned them, he refused to allow the De Facto Wife access to these funds despite acknowledging that they were her ‘separate property’ and despite instructing his solicitor to provide written confirmation that they would be returned. As at the date of the trial the De Facto Wife remained unable to access the funds. The De Facto Husband gave implausible evidence that he had tried to return the funds to her but had ‘had difficulty depositing it’ despite multiple attempts and despite having attended at a bank in order to do so. He was unable to explain why he had not returned the funds by other means such as by drawing a cheque.
In 2021, the De Facto Husband subdivided U Street into two blocks, known as 2 U Street and 3 U Street. The De Facto Husband sold 3 U Street in late 2021 and retained the sale proceeds. He subsequently entered into a contract and commenced building a house on 2 U Street. At the time of trial, that build had not yet been completed.
On 14 September 2021, the De Facto Wife’s then-solicitor, Ms X, sent the De Facto Husband a notice indicating that the De Facto Wife intended to end the relationship in accordance with the terms of the Agreement.[15]
[15] De Facto Wife’s trial affidavit, annexure MSH12.
The De Facto Wife commenced the present proceedings on 25 February 2022. Her Initiating Application was silent with respect to the Agreement, and although, as conceded by Counsel for the De Facto Wife, its terms did ‘leave room for some confusion,’ I accept the submission that it sought orders generally consistent with an intention to implement the terms of the Agreement. The De Facto Wife made it clear to the De Facto Husband by way of letter dated 28 April 2022[16] and to the Court at a hearing on 23 May 2022 (as reflected in a notation to the orders made that day) that she sought to uphold the Agreement. An Amended Application to that effect was filed by her on 9 March 2023.
[16] De Facto Wife’s trial affidavit, annexure MSH15.
A Notice of Address for Service was filed by the De Facto Husband’s present solicitors on 20 April 2022. By his Response filed on 20 May 2022, the De Facto Husband sought a declaration that the Agreement was binding and orders for its enforcement.
Following the surrender of the leasehold interest held by the De Facto Wife’s former mother-in-law, two of three parts of the Town Q property were sold in early 2023, and De Facto Wife became entitled to the sum of $4,224,767 pursuant to the 2009 orders.
The following month, the De Facto Husband amended his Response and sought that the Agreement be set aside.
The sum of $4,224,767 was received by the De Facto Wife in early 2023.
In mid-2023, the De Facto Wife purchased a property at Y Street, Suburb Z (‘the Suburb Z property’) for the sum of $1,600,000, using the funds she had received from the sale of the Town Q property. She spent approximately $100,000 on improvements to this property. It was subsequently sold for $1,934,000 in early 2024, yielding net proceeds of $1,903,120.55.
From the funds she received pursuant to the 2009 orders, the De Facto Wife gifted the sum of $100,000 to one of her sons and gave each of her two sons the sum of $10,000.
In early 2024, the De Facto Wife purchased the property at AA Street, Suburb BB for the sum of $2,032,000, which came to $2,158,953.96 including acquisition costs.[17] This property was purchased using the sale proceeds of the Suburb Z property together with funds received by the De Facto Wife pursuant to the 2009 orders.
[17] Exhibit A2.
Notwithstanding assertions to the contrary made by and on behalf of the De Facto Husband, it is plain that the parties conducted their affairs throughout the relationship in accordance with the intentions expressed in the Agreement. This included the following:
(a)At every stage at which either of the parties came into significant funds, such as when the De Facto Husband received his inheritance and the proceeds of sale of the Suburb J, 1 U Street and S Street properties, and when the De Facto Wife received the proceeds of sale of the Town M property, those funds were not shared between the parties but were applied as determined by and for the benefit of the recipient. In the case of the properties owned by the De Facto Husband, he acknowledged that this had been because, pursuant to the terms of the Agreement, he had considered the properties which had been sold to be his property.
(b)The multiple properties purchased by the De Facto Husband using funds falling within the definition of his ‘separate property’ were purchased in his sole name, with the exception of the Suburb C property, in relation to which the proportion of the purchase price which was derived from his separate property was reflected in the fact that a 60% interest in the property was registered in his name. The De Facto Husband’s own evidence confirmed that the De Facto Wife ‘made no significant contribution’ to the decision he made with respect to the purchase of and dealings with real property during the relationship and that she made no financial contribution thereto. It is apparent that the De Facto Husband considered these properties and the funds used to purchase them to be his alone and that he acted accordingly.
(c)During times in the relationship where the parties resided in properties owned by the De Facto Husband, the De Facto Wife did not make contributions to the mortgages encumbering those properties. It was the De Facto Husband’s evidence that he expected to make such payments himself (together with payment of rates, taxes and insurance for the properties) and did not ask the De Facto Wife to contribute.
(d)The De Facto Wife did, however, at certain periods during the relationship, make payments classified as ‘rent’ in relation to her residence at properties owned by the De Facto Husband. Her evidence, which I accept, was that at other times she paid certain utilities accounts in full in lieu of paying rent.
(e)The De Facto Husband made no contributions towards the mortgage encumbering the Town M property, despite his evidence that such payments constituted a ‘financial drain’ on the De Facto Wife’s income.
(f)When the parties moved out of the S Street property and it was rented out, the rental income was retained solely by the De Facto Husband.
(g)When the parties lived in rental accommodation, they paid the rent equally.
(h)The De Facto Wife made no contribution towards the construction costs of any of the building projects undertaken by the De Facto Husband during the parties’ relationship.
(i)The De Facto Wife’s unchallenged evidence was that she was not privy to the full details of the De Facto Husband’s finances during the relationship.
(j)During the relationship, the parties maintained a shared bank account to which there was a debit card attached, as referred to at clause 4 of the Agreement. In accordance with the intention reflected therein, they each contributed equally to this account, which was used to meet joint living expenses such as groceries. They later opened a joint bank account into which they each regularly deposited equal sums to pay for rent.
(k)The parties each generated their own income throughout the relationship. Each party’s income was directed into an account in that party’s sole name to which the other party did not have access. Their income and resources were not pooled. All of the De Facto Husband's business dealings were conducted via his own accounts.
(l)When the parties travelled together, they each paid for their own expenses (save for one trip for which the De Facto Husband provided frequent flyer points to pay for the De Facto Wife's airfares, which she asserted, and I accept, was a gift) and each contributed to shared costs such as fuel equally.
(m)At times when the parties lived in temporary accommodation between residences, they paid the accommodation fees equally.
(n)The De Facto Husband hosted students from time to time during the parties’ relationship. Save for one modest payment made to the De Facto Wife in return for cooking and cleaning for those students, the De Facto Husband retained the income generated from hosting the students for his sole benefit.
(o)The WorkCover payments received by each of the parties during the relationship were retained for the sole benefit of the recipient.
(p)The parties each paid for their respective personal expenses.
(q)The parties did not purchase furniture and household effects jointly. Indeed, the De Facto Husband was at pains to emphasise that he had been the one to purchase such items.
(r)The De Facto Wife’s contribution to the household expenses increased during a brief period when her son lived with the parties.
(s)When the parties purchased the Suburb C property, they registered their ownership as tenants in common in unequal shares and each paid rates, like outgoings, and preparatory costs associated with an intended build in accordance with those shares. The De Facto Husband's evidence was that the parties' interests had been registered in this manner ‘for inheritance purposes,’ thus confirming the intended separate long-term retention by the parties of their individual shares.
The De Facto Wife’s evidence was that consistently with clause 4(a) of the Agreement, which provided that ‘[i]n the course of the de facto relationship the parties shall contribute to the everyday living expenses as they agree from time to time,’ the parties had contributed equally to shared expenses and had made adjustments between them for payments made by each of them in this regard. She produced a detailed notebook in which she had meticulously recorded the expenses incurred by each of the parties for items such as food, utilities and expenses for each other and the consequent reconciliations between them during their relationship.[18] Her evidence, which I accept, was that in the later stages of the relationship she had used her mobile telephone to record the parties’ expenditure and adjustments and had not retained those records.
[18] Exhibit A4.
The De Facto Husband acknowledged that early expenses recorded in the notebook were in his handwriting. He also acknowledged that the notebook represented a careful attempt to record all expenses so as to ensure parity of contribution. He sought to assert that this had only been done ‘from time to time,’ that it had been ‘spasmodic’ and that ‘the agreements varied considerably over time.’ This evidence, which was given for the first time in the witness box, was not convincing.
It was put to the De Facto Wife that the fact that the parties had not contributed their separate income towards mortgage payments in respect of the Suburb C property represented a departure from clause 3(b)(ii) of the Agreement, which provided that ‘the parties agree to contribute from their separate incomes towards mortgage repayments in respect of the proposed [Region E] property.’ She explained this by saying that as circumstances had eventuated, the De Facto Husband had had access to cash with which to purchase his share of the Suburb C property and the borrowings had been for the purpose of funding her share. I accept that the manner in which the parties structured their affairs in this regard was a logical means of continuing the intention expressed in the Agreement in the circumstances which eventuated. I do not consider this to have been a significant departure from its terms.
It was put to the De Facto Wife, and she agreed, that the reduction in her working hours was not a change in circumstances that was contemplated by clause 4(c) of the Agreement, which listed potential changes in circumstances to which the parties had had regard prior to entering into the Agreement. In my view, this is of little moment. The list of potential circumstances outlined in clause 4(c) was expressed not to be exhaustive, and an Agreement of this nature could not possibly list all of the potential circumstances which may develop throughout the unknown duration of a pending relationship. In any event, the Agreement was not expressed to cease to have effect if changes in circumstances other than those listed were to develop, and the change to the De Facto Wife’s circumstances did not cause a departure from the terms of the Agreement, because the evidence demonstrated that she continued to make contributions to the parties’ expenses as she had done prior to the change.
In his oral evidence, the De Facto Husband sought to distance himself from the suggestion that the parties had maintained separate finances, kept their incomes separate and conducted their affairs in accordance with the agreement they had reached, as reflected in the terms of the Agreement. He repeatedly used the word ‘initially’ to qualify any admission that this had been the case. However, the evidence before the Court when considered as a whole did not support the suggestion that this had only occurred ‘initially’ or that there had been any change to the parties’ conduct in this regard. Rather, it demonstrated that the parties consistently conducted their financial affairs separately and consistently with an intention to abide by and remain bound by the terms of the Agreement.
The De Facto Husband’s evidence was replete with apparently inadvertent references to the manner in which the parties had structured their finances during their relationship which confirmed the evidence of the De Facto Wife in this regard. For example, he referred to funds held by the De Facto Wife as ‘[Ms Harris’] funds’ and the Town M property as ‘[Ms Harris’] property,’ was keen to emphasise that the reason he considered 1 U Street to have been his property was that it was ‘in [his] name,’ and explained having purchased a mobile home in his sole name by saying that the De Facto Wife ‘didn’t have the money and when she did we could buy one together.’
The De Facto Husband’s case outline alleged that the De Facto Wife had, by paragraphs 150 and 193 of her trial affidavit, acknowledged that the parties had departed from the terms of the Agreement. I do not accept that submission. Those paragraphs alleged obstructive post‑separation conduct on the part of the De Facto Husband which failed to comply with his obligations pursuant to the Agreement. They did not undermine the De Facto Wife’s case that the parties had conducted their affairs throughout their relationship in accordance with the terms of the Agreement. It would be nonsensical to permit a party’s post-separation refusal to comply with an Agreement from which they sought to depart to form a basis for the success of such an application.
Counsel for the De Facto Husband submitted that it was of significance that the parties had not purchased a property in Region E as they had recorded in the Agreement that they intended to do, and had instead purchased the Suburb C property. I do not accept that submission. The Agreement contained a general definition of ‘joint property’ which was not limited to the foreshadowed Region E purchase and made provision for the manner in which such property was to be distributed. It also made specific reference to the purchase of a different property by the inclusion of the words ‘or similar’ at clause 6(c), which provided that ‘the proposed purchase of the [Region E] (or similar) property will be divided equally between them.’
It is an agreed fact that the parties did not complete Annexure C of the Agreement, which was intended to be a running schedule of joint assets acquired, including their purchase prices and dates. There was no record of the Suburb C property or any other purchase recorded at Annexure C. Counsel for the De Facto Husband submitted that this was failure to comply with the terms of the Agreement ‘in a major sense.’ I do not agree. The completion of the annexure was simply intended as a means of recording transactions undertaken by the parties. The failure to use it was little more than a minor administrative departure from their intended means of documenting their affairs.
WAS THE REQUIREMENT AS TO INDEPENDENT LEGAL ADVICE AS SET OUT AT SUBSECTION 90UJ(1)(B) OF THE ACT COMPLIED WITH?
Relevant legal principles
Subsection 90UJ(1) of the Act provides as follows:
(1)Subject to subsection (1A), a Part VIIIAB financial agreement (other than an agreement covered by section 90UE) 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.
There was no dispute between the parties with respect to subparagraphs (a), (c), (ca) or (d). The sole issue for determination with respect to this aspect of the proceeding was whether, 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, as required by subparagraph (b).
As outlined above, the De Facto Husband’s position was that neither of the parties had received the requisite independent legal advice.
The onus was on the De Facto Wife, as the party asserting that the Agreement was binding, to establish that fact, because the legislation provides that an agreement is binding ‘if and only if’ the requirements in subsection 90UJ(1) are established. However, once the party seeking to rely on an agreement produces, as the De Facto Wife in this case has, a statement provided by a solicitor in accordance with subsection 90UJ(1)(c), this constitutes prima facie evidence of compliance with the requirements as to legal advice sufficient to support an inference that the requisite advice has been provided. Such evidence is bolstered where the body of the Agreement includes, as the Agreement in the present case does, a statement by the parties to the effect that the requisite independent advice was provided. This casts a forensic obligation onto the other party, in this case the De Facto Husband, to adduce evidence which would disprove, or at least throw into doubt, the inference or conclusion to be drawn from the statements of legal advice and the confirming statement in the body of the Agreement.[19]
[19] Hoult & Hoult [2013] FamCAFC 109; (2013) FLC ¶93-546 at [60]-[63]; [96]-[97]. See also Logan & Logan [2013] FamCAFC 151; (2013) FLC ¶93-555; Wallace & Stelzer & Anor [2013] FamCAFC 199; (2013) FLC ¶93-566.
The De Facto Wife’s position was that the De Facto Husband had failed to adduce sufficient evidence to displace or undermine the prima facie evidence represented by the statements of legal advice and the express acknowledgment contained within the body of the Agreement to the effect that the requisite advice had been provided.
Advice provided to De Facto Husband
The De Facto Husband asserted that he had not received the requisite advice, or indeed any advice, from Mr G, despite the fact that Mr G had executed a statement attesting to having given the De Facto Husband the required advice.
The De Facto Husband’s evidence was that he had only met with Mr G on one occasion for a meeting which had lasted approximately 10 minutes. He said that Mr G had simply asked him whether he had read and understood the Agreement and he had confirmed that he had, and that they had otherwise merely spoken about how they each knew Mr F. Counsel for the De Facto Husband submitted that the De Facto Husband’s evidence in this regard had been unchallenged. I do not agree. The De Facto Husband was confronted in the witness box with the statement of legal advice signed by Mr G, which contradicted his evidence in this regard.
The De Facto Wife did not dispute that the De Facto Husband and Mr G had met only once. Her evidence was that she had driven the De Facto Husband to an appointment which had been at Mr G’s house, and had waited while he met with Mr G, which had taken 30 minutes or longer. She accepted under cross-examination that she did not know whether the De Facto Husband had spent any time waiting for Mr G after he had entered the house.
I accept that it is necessary that advice given pursuant to section 90UJ(1)(b) be meaningful and not merely cursory.[20] However, I note also that in Hoult & Hoult (‘Hoult’),[21] Strickland and Ainslie-Wallace JJ described linking the question of whether the required advice had been given to the time taken for the consultation as ‘impermissible speculation.’
[20] Kaimal & Kaimal [2020] FamCA 971.
[21] [2013] FamCAFC 109; (2013) FLC ¶93-546 at [268].
The De Facto Husband relied on a handwritten receipt dated 13 August 2013 (the date upon which the statement of legal advice was signed by Mr G) in the sum of $110, with the annotation ‘witnessing brief de facto financial agreement.’ The De Facto Husband did not produce the entirety of Mr G’s file and therefore did not provide any independent evidence to establish whether this was the only invoice produced by Mr G in relation to this matter, whether he had been provided with any advice prior to the meeting, whether there had been any discussions of any kind between the De Facto Husband and Mr G in relation to the Agreement prior to the meeting, or whether Mr G had undertaken a review of the Agreement prior to the meeting. There is no evidence of such matters before the Court save for the somewhat limited evidence provided by the De Facto Husband himself.
I note that the De Facto Husband himself was very familiar with the terms of the Agreement prior to the meeting, having been actively involved in its drafting, and it would therefore not have been necessary for Mr G to spend time showing or explaining the contents to him prior to providing him with advice.
There is no evidence before the Court as to the hourly (or other) rate charged by Mr G for legal services in 2013 from which a calculation of the amount of time represented by the invoice produced by the De Facto Husband could be made. I note also that it is quite possible and even probable that a handwritten receipt did not convey the entirety of the contents of the meeting to which it related, and that it is also possible that the requisite advice was given briefly but was nonetheless given.
The De Facto Husband’s evidence with respect to the advice (or lack thereof) received by him from Mr G and his dealings with Mr G must be considered in light of the fact that other aspects of the De Facto Husband’s evidence appeared to have been crafted to suit his position before the Court rather than being genuine representations of the events to which they related, and that he was not generally a reliable historian. This issue is discussed in greater detail later in these reasons. As such, this evidence must be treated with caution.
The allegation made by the De Facto Husband against Mr G, being that he, a solicitor and an officer of the Court, signed a false statement with respect to the provision of legal advice, is an extremely serious one. I have regard, as required by subsection 140(2)(c) of the Evidence Act, to the gravity of the matters alleged.[22]
[22] See also Briginshaw v Briginshaw [1938] HCA 34; (1938) 60 CLR 336.
Mr G was not called to give evidence, and the evidence before the Court does not establish that he was given any opportunity to respond to the serious allegation made against him by the De Facto Husband. The De Facto Husband asserted that Mr G was unable to be called to give evidence because he had suffered a medical episode. He asserted that he had knocked on the door of Mr G’s house approximately 18 months prior to the trial (being approximately the time of the change to the De Facto Husband’s position with respect to the Agreement) and asked for a copy of his file. He said that Mr G had been unable to find the file but had said he would look further and get back to him, but had not done so. He said he had enquired ‘a month or so’ later by telephone as to whether Mr G was prepared to give evidence, but he had been ‘a bit doddery.’
The De Facto Husband said that he had not subpoenaed Mr G to give evidence because it was ‘very difficult to get a subpoena from someone who's had [a medical episode]’ but then said he would be ‘happy to get a subpoena if you want one.’ He gave no evidence of having made any attempt to contact Mr G through the more usual channel of his solicitor, noting that he was legally represented throughout the entirety of the time during which he sought to challenge the Agreement and his solicitors could have made a formal request or issued a subpoena.
The De Facto Husband was at all material times a businessman and tradesman with considerable experience with entering into contractual relations. The statement of legal advice signed by Mr G and the acknowledgment contained within the Agreement to the effect that the advice had been provided were clear in their terms and were expressed in plain English. The De Facto Husband did not suggest that he had not read or had not understood the Agreement before signing it, and indeed, his evidence was that he was actively involved in its drafting.
It must, therefore, have been readily apparent to the De Facto Husband at the time of entering into the Agreement that he was supposed to have received legal advice about the matters specified both in clause 9 of the Agreement and in the statement of legal advice. Indeed, in signing the Agreement, including clause 9, the De Facto Husband specifically represented to the De Facto Wife that this had occurred. I do not accept the suggestion implicit in the De Facto Husband’s evidence that he was not aware that the specified advice was required. I do not consider it plausible that the De Facto Husband received no advice whatsoever (as was his evidence) but failed to raise this with Mr G or at all at the time of entering into the Agreement in circumstances where he must have been aware that advice should have been provided to him. This is particularly implausible in light of the agreed fact that at the time of entering into the Agreement, the De Facto Husband was eager for the parties to be bound by it.
It was submitted on behalf of the De Facto Husband that there was no evidence before the Court as to what documents (if any) and information (such as details of the 2009 orders) were provided to Mr G to equip him to provide advice to the De Facto Husband, particularly having regard to the items listed as ‘TBA’ in the annexures to the Agreement. Counsel for the De Facto Husband relied on the decision of Aldridge J in Abrum & Abrum,[23] in which his Honour emphasised that advice as to the effect of an Agreement on the rights of a person requires identification of those rights.
[23] Abrum & Abrum [2013] FamCA 897. See also Raleigh & Raleigh [2015] FamCA 625.
In my view, however, lack of detail of any documents having been given to Mr G goes not to whether Mr G could have known or identified the De Facto Husband’s rights, but to the content and correctness of any advice given, being an issue with which the Court is not concerned for present purposes.[24] Even if the advice given was not as comprehensive as it might otherwise have been as a result of limitations on extraneous information being made available to the solicitor, it does not follow axiomatically that it was so deficient or so cursory as to amount to no advice at all.
[24] Kostres & Kostres [2009] FamCAFC 222; (2009) FLC ¶93-420; Wallace & Stelzer & Anor [2013] FamCAFC 199; (2013) FLC ¶93-566; Senior & Anderson [2011] FamCAFC 129; (2011) FLC ¶93-470; Hoult & Hoult [2013] FamCAFC 109; (2013) FLC ¶93-546; Logan & Logan [2013] FamCAFC 151; (2013) FLC ¶93-555.
I have regard also to the fact that the Agreement was entered into in the early stages of the parties’ relationship and not upon their separation. This has the consequence that such advice as could be given regarding the De Facto Husband’s rights (other than in a general sense by reference to the operation of the Act) would, of necessity, involve a high level of speculation about hypothetical future facts and circumstances and could not involve any level of certainty as to his likely ultimate entitlements or rights in the absence of an agreement. In any event, the forensic obligation to displace or at least cast sufficient doubt on the prima facie evidence constituted by the statement of legal advice by producing evidence of what was or was not provided to Mr G in order to equip him to provide advice lay with the De Facto Husband and his failure to produce evidence in this regard does not assist him.
Importantly, the De Facto Husband did not raise any issue in relation to the advice (or lack thereof) provided to him by Mr G until after he learnt many years later that the De Facto Wife had come into funds in the sum of over $4 million, which occurred after the present proceedings had been on foot for approximately 12 months, during 10 of which the De Facto Husband had been represented. This fact casts doubt on the veracity of the De Facto Husband’s assertions in this regard.
The De Facto Husband sought to explain his failure to raise the asserted lack of advice received from Mr G until almost a decade after the Agreement had been signed and nearly a year after he had engaged his solicitors and instructed them to seek to enforce the Agreement by asserting that it had not been until 2023 that he had been ‘told’ that he had not received the requisite advice. His evidence about this purported development in the year prior to the trial was vague and stood in stark contrast to the precision with which he claimed to recall his interactions with Mr G approximately 10 years earlier. It also sat uneasily with his evidence that he had received no advice at all (as distinct, for example, from having received advice which he later learned had not been compliant with the requirements of the Act), being a circumstance about which, if true, he would have been fully cognisant from the outset without having needed to be told by another person. Indeed, this was a matter about which only he (and Mr G) could have had any direct knowledge and it is difficult to see how he could have come to be aware of it by being informed by anyone else.
If what the De Facto Husband actually meant by this assertion was that it was not until 2023 that he had become aware that the advice ought to have been provided, this assertion, too, must be rejected. As mentioned above, the requirement for the advice to be provided was referred to in plain English in the document signed by the De Facto Husband, which he acknowledged he had read and had a hand in drafting, and in the attached statement of legal advice.
Furthermore, accepting this assertion would require that I draw an inference that the De Facto Husband’s present solicitors, who are experienced family law solicitors, had failed to advise him during the first 10 months of his involvement in the present proceedings as to the requirements for legal advice in subsection 90UJ(1)(b) notwithstanding that they acted for him throughout a time where there was a live issue before the Court as to whether the De Facto Wife had obtained the requisite legal advice and whether she was seeking to depart from the Agreement as a consequence (which is discussed in greater detail below). Such a suggestion is implausible and such an inference will not be drawn.
The De Facto Husband contradicted his evidence in relation to these issues late in his cross‑examination by suddenly alleging that he had wanted to depart from the Agreement from the outset but his solicitors had refused to follow his instructions. This issue is discussed in greater detail later in these reasons. This evidence did the De Facto Husband’s credibility no favours.
I gained the distinct impression from the De Facto Husband’s evidence that the reason the purported issue with respect to the advice received by him had not been raised earlier was that it had not become apparent to the De Facto Husband until the receipt by the De Facto Wife of the funds to which she was entitled pursuant to the 2009 orders that there was some benefit to him in asserting that the advice had not been received, at which time he determined to seek the assistance of the Court in departing from the Agreement. The De Facto Husband’s conduct in raising the issue with respect to the advice with which he was provided presented as opportunistic, and consideration of the veracity of his evidence must be undertaken in this light.
I have turned my mind to the possibility that the De Facto Husband had not in fact received any advice and was aware of that fact but had strategically determined not to disclose that information throughout the years of the parties’ relationship and during the early part of the present proceedings at which times he perceived it to be to his benefit to uphold the Agreement. On balance, I consider it more likely that he had in fact received the advice but had strategically determined to say otherwise upon the parties’ facts and circumstances changing such that the maintenance of the Agreement was no longer to his benefit. This is particularly so in light of my conclusion that it is unlikely that the De Facto Husband would not have spoken up about the absence of advice at the time of signing the Agreement, noting that he was keen at that time for the Agreement to have full force and effect. In any event, the lack of clarity in this regard cannot be resolved in favour of the De Facto Husband, whose forensic obligation it is to displace or cast doubt upon the prima facie evidence contained in the statement of legal advice produced by the De Facto Wife and the assertion contained within the body of the Agreement.
For these reasons, I am not satisfied that the De Facto Husband has adduced sufficient evidence to overcome the prima facie evidence contained within the statement of independent legal advice signed by Mr G and the confirmation of its contents within the body of the Agreement itself, such that it could be said that the requirements of subsection 90UJ(1)(b) were not met with respect to the advice provided to him. I find that the De Facto Husband received the advice as set out in the statement of legal advice signed by Mr G.
Advice provided to De Facto Wife
The De Facto Husband alleged both that the De Facto Wife had not been provided with the advice required by subsection 90UJ(1)(b) and that any advice she had been provided had not been independent in the relevant sense.
There was no evidence before the Court from Mr F. A copy of his file was not in evidence. The De Facto Wife gave unchallenged evidence that she had made enquiries of Mr F and had been told that he had retired and his file had been destroyed. The De Facto Wife also deposed that Mr F had been prepared to swear an affidavit confirming the work he had performed for her. The absence of such an affidavit or a subpoena either for production of his file or for Mr F to give evidence was not explained.
Similar submissions were made on behalf of the De Facto Husband with respect to the information and documents that were made available to Mr F to equip him to provide the requisite advice as those made with respect to Mr G, as outlined above. I reject those submissions for the same reasons as those with respect to Mr G.
The De Facto Husband referred to paragraph 10 of the first affidavit filed by the De Facto Wife in support of her Initiating Application on 25 February 2022, in which she said ‘[t]he respondent arranged for a Binding Financial Agreement between us to be prepared by his friend, [Mr F], solicitor. He gave all the instructions and information to the solicitor. I did not give any instructions. I did not receive any advice…’
The De Facto Wife’s evidence was that her then-solicitor, Ms X, had either misunderstood her instructions or had included typographical errors when the affidavit filed on 25 February 2022 was prepared, and that the evidence that she had not received advice had not been accurate. She deposed that she had advised Ms X prior to swearing the affidavit that paragraph 10 was not accurate and requested that it be changed, but Ms X had told her to ‘just leave it as it is’ and told her that there was time pressure to file the documents. Her evidence was that she had clearly instructed Ms X that she wanted the Agreement upheld.
Under cross-examination, the De Facto Wife said that she took responsibility for not having been strong enough to stand up to Ms X and insist on the affidavit being changed before she signed it, but confirmed that she had instructed Ms X that she simply wanted the terms of the Agreement implemented. The De Facto Wife further deposed that she had not understood the significance of swearing an affidavit containing errors at the time she did so.
The De Facto Wife did not call Ms X to give evidence. She explained this under cross‑examination by saying that she considered that to do so would be ‘compromising’ for Ms X. She was asked whether she had caused her current solicitors to write to Ms X and put the allegation to her and she confirmed that she had. A letter to Ms X to that effect dated 19 September 2023 was produced in response to a call made for its production.[25] She gave evidence that no response had been received.
[25] Exhibit A3.
The De Facto Husband alleged that the De Facto Wife’s evidence with respect to this issue was not plausible, and that it was more likely that the De Facto Wife had simply changed her mind once she had realised that her assets would be available for distribution if the Agreement were to be set aside. In my view, this proposition is not borne out by the timeline of events, which suggests that the De Facto Wife had limited incentive to attempt to preserve her assets and indeed it was the De Facto Husband who held the greater incentive to do so, until a date well after the De Facto Wife’s express written confirmation and indication to the Court that she sought to uphold the Agreement.
Counsel for the De Facto Wife submitted, and I accept, that it is of significance that although the De Facto Wife’s evidence in that first affidavit was that she had not received the requisite advice, the Initiating Application with which it was filed sought orders broadly in line with the terms of the Agreement and did not seek that it be set aside or orders that departed from its terms. Paragraph 45 of the same affidavit complained of the De Facto Husband’s refusal to comply with the terms of the Agreement, supporting the suggestion that the De Facto Wife sought that it continue.
Counsel for the De Facto Wife also submitted, and I also accept, that it is noteworthy and consistent with the De Facto Wife’s evidence given at trial that after that affidavit was filed, she changed solicitors prior to any further documents having been filed on her behalf. This contrasts with the actions of the De Facto Husband, who also made serious allegations that his solicitors had refused to follow his instructions, yet continued to instruct them.
As I have already mentioned, the De Facto Wife’s evidence was generally credible and consistent with the available independent documentary evidence. Aside from her admission to having previously knowingly given false evidence in relation to this issue (albeit under asserted pressure from a solicitor), she provided no reason to doubt her veracity as a witness. Her evidence with respect to this issue, however, contains a very serious allegation against a legal practitioner, and a finding of such a nature should be approached cautiously.[26] In the absence of any evidence from Ms X or a copy of the portions of her file relevant to this issue, I do not consider that the evidence provides sufficient foundation for a finding of this nature. However, my inability to make a finding with respect to this issue does not rise to the level of a finding that the De Facto Wife’s explanation for the contents of her first affidavit was untruthful.
[26] Evidence Act 1995 (Cth) s 140(2)(c); Briginshaw v Briginshaw [1938] HCA 34; (1938) 60 CLR 336.
The suggestion that Mr F signed the statement of legal advice without in fact having given the advice referred to therein is also a very serious allegation levelled against a legal practitioner and it suffers from the same difficulties and the same need for caution as discussed with respect to the same allegation having been made against Mr G, as outlined earlier in these reasons.
The evidence in the De Facto Wife’s trial affidavit as to the advice she was given by Mr F was couched in general terms and did not specify that she was given advice as to the matters required by subsection 90UJ(1)(b). In the witness box, she was able to recall oral advice she had received as to the effect of the Agreement on her rights as well as advantages and disadvantages of entering into the Agreement, including that her assets would be retained by her and that she would not be able to make a claim on the De Facto Husband’s assets. I take into account the fact that she was recalling a discussion which was said to have taken place over 10 years earlier. Her evidence was that she had not been provided with a letter of advice.
I am not satisfied on the evidence before the Court that the De Facto Husband has met the forensic obligation cast upon him by virtue of the De Facto Wife’s production of the statement of legal advice with respect to the question of whether the De Facto Wife was in fact given advice by Mr F. This is ultimately of little consequence, however, because the evidence reveals that such advice as the De Facto Wife was given by Mr F was not ‘independent’ in the requisite sense.
It is well established that a solicitor is not independent if he or she acts for both parties.[27] It has also been suggested that having been selected by the other party is a factor which may undermine the independence of a solicitor.[28] A solicitor who acts for both parties cannot give independent advice to one of them, even if the other party has been referred to another solicitor.[29]
[27] Watkins & Combes [1922] HCA 3; (1922) 30 CLR 180; Whereat and Anor v Duff [1972] 2 NSWLR 147.
[28] Re Budziszewski & S's Bill of Costs, Hall & Hall & Barrett [1982] FamCA 75; (1982) FLC ¶91-280.
[29] Bachman & Donohue [2021] FedCFamC1F 240 at [76].
Both parties gave evidence that they had downloaded a template financial agreement from the internet and worked together on putting together the contents of the first draft of the Agreement, with the De Facto Wife typing and both parties having input, and they had satisfied themselves that they were happy with its terms before providing the draft to Mr F, who had made some changes. Having given that evidence, however, De Facto Husband later contradicted himself by saying ‘[Mr F] and I drew the document mainly.’ His admission in the witness box that the parties had created the first draft of the Agreement together also contradicted his affidavit evidence that he had instructed Mr F to draft the Agreement.
The De Facto Husband’s evidence was that he had engaged Mr F and attended upon him for ‘the first initial meetings,’ ‘maybe as many as three,’ following which the parties had attended upon him together on ‘possibly two’ occasions in around mid-2013. He deposed that he had attended upon Mr F on ‘almost all occasions’ and denied that Mr F had told him that he could not act for both parties ‘until the very end.’ The De Facto Husband’s evidence entailed a serious allegation of improper conduct on the part of Mr F in having advised and acted for both parties to the transaction. A high level of satisfaction would be required before such a finding could be made.[30]
[30] Evidence Act1995 (Cth) s 140(2)(c); Briginshaw v Briginshaw [1938] HCA 34; (1938) 60 CLR 336.
Because of the contradictions in the De Facto Husband’s evidence with respect to these events, I prefer the De Facto Wife’s evidence that the parties that the parties jointly attended an initial meeting with Mr F at which the De Facto Husband introduced her to Mr F and they sought general information about entering into a financial agreement, but the parties had not jointly met with Mr F thereafter because Mr F had made it clear that he could not advise both of them. She said that it had been agreed at that point that the De Facto Husband would take advice from a different lawyer and she had met with Mr F without the De Facto Husband on at least two subsequent occasions. This was consistent with emails upon which she relied, in which she alone corresponded with Mr F with respect to amendments to the Agreement,[31]and with Mr F’s invoice, which was directed solely to her.[32]
[31] De Facto Wife’s trial affidavit, annexure MSH3.
[32] De Facto Wife’s trial affidavit, annexure MSH4.
I am not satisfied that Mr F acted for both parties with respect to the Agreement. I accept the submission made on behalf of the De Facto Wife that the circumstances of this case are different from cases in which that occurred.[33]
[33] Such as Bachman & Donohue [2021] FedCFamC1F 240 and Logan & Logan [2013] FamCAFC 151; (2013) FLC ¶93-555.
However, there are serious difficulties with the extent to which Mr F could have provided independent advice to the De Facto Wife, arising from the fact that Mr F was both the De Facto Husband’s friend and, significantly, his lawyer.
The De Facto Husband’s evidence was that he had maintained a personal friendship with Mr F for many years prior to the commencement of the parties’ relationship and had socialised with him. In the witness box, he said he had met Mr F through his former partner at a ‘[social] group’ at which he had seen him approximately every few weeks for an unspecified period.
Under cross-examination, the De Facto Husband described Mr F as his ‘go to for anything legal.’ He gave evidence that prior to entering into the Agreement, he had obtained legal advice from Mr F with respect to a fencing dispute, a child support issue, an issue pertaining to the development of the Suburb J property and a will. He produced a record of a payment made by him to Mr F in mid-2010 with respect to preparation of a will.[34]
[34] Exhibit R8.
The De Facto Wife’s evidence supported the De Facto Husband’s assertion that Mr F had been his friend. Her evidence, given under cross-examination, was that at the time they commenced preparation of the Agreement, the De Facto Husband had referred to Mr F as his ‘lawyer friend.’ This echoed the evidence given in her trial affidavit. It was clear from the evidence given by both parties that Mr F’s involvement in the preparation of the Agreement and the provision of advice in relation thereto was instigated by the De Facto Husband.
The De Facto Husband relied on an invoice from Mr F dated 29 August 2013 for preparation of an updated will, with which copies of the will were provided for execution.[35] The date of provision of this will was only a matter of days after the statement of legal advice had been signed by Mr F, and the invoice was produced on the same date as the date of the invoice for provision of the advice to the De Facto Wife with respect to the Agreement.[36] This suggests that Mr F was performing legal work for the De Facto Husband either at or proximate to the time of his provision of the relevant advice to the De Facto Wife. The De Facto Husband’s evidence that he had given Mr F instructions to prepare his will at ‘about the same time’ as he had been acting in relation to the Agreement was unchallenged and accords with the available documentary evidence.
[35] Exhibit R6.
[36] Exhibit R7.
The De Facto Husband produced a copy of diary notes made by him in the months leading up to the execution of the Agreement in 2013, which included the notation ‘[Mr F] child support’ on 6 May as well as notes about the terms of his will and about the terms of the Agreement together. The diary also contained various references to ‘Mr F’ on other dates, including ‘[Mr F] sign’ on 24 July and ‘[Mr F] will’ on 12 August (the day before the Agreement was executed).[37] Counsel for the De Facto Husband submitted that these notes demonstrated that at the same time that he was providing advice to the De Facto Wife in relation to the Agreement, he was also providing advice to the other party to the Agreement with respect to its drafting and contents. I do not accept that the notes go quite as far as contended on behalf of the De Facto Husband, but I am satisfied that at the same time as he acted for the De Facto Wife in relation to the Agreement, Mr F was at least acting as the legal advisor of the De Facto Husband in relation to other matters, which is a clear conflict of interest.
[37] Exhibit R13.
As a result of these matters, I am unable to be satisfied that the De Facto Wife received independent legal advice as required by subsection 90UJ(1)(b).
In the event that such a finding were to be made, the De Facto Wife sought a finding that it would be unjust and inequitable if the Agreement were not binding on the spouse parties and a consequent declaration that the Agreement was binding. As such, I shall now consider whether it would be unjust and inequitable for the Agreement not to be binding on the parties.
WOULD IT BE UNJUST AND INEQUITABLE IF THE AGREEMENT WERE NOT BINDING ON THE PARTIES?
Relevant legal principles
Subsection 90UJ(1A) of the Act provides as follows:
(1A)A Part VIIIAB financial agreement (other than an agreement covered by section 90UE) 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.
In the present matter, the Agreement was signed by each of the parties and has not been terminated or set aside by a court. As such, the issue for determination is whether 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 whether a consequential declaration should be made.
In Parker & Parker,[38] Murphy J held that:
The plain words of s [90UJ](1A)(c)[39] evidence a clear meaning. They envisage a broad discretion vested in the Court in circumstances where the pre-conditions to the exercise of that discretion prescribed otherwise in s [90UJ](1A)(a) to (e) are established. Once that discretion is enlivened, nothing within the section suggests, in terms, any restriction on the matters that might inform it.[40]
[38] [2012] FamCAFC 33; (2012) FLC ¶93-499.
[39] Original references are with respect to the corresponding provisions relating to parties to marriages which are, in all relevant respects, identical.
[40] at [231].
The provisions of subsection 90UJ(1A) are remedial in nature and should not be given an overly narrow interpretation.[41] The exercise of discretion is not limited to ‘technical’ breaches and is available in circumstances in which the failure to comply with the requirements of subsection 90UJ(1) involves lack of provision of the requisite legal advice.[42]
[41] Parker & Parker [2012] FamCAFC 33; (2012) FLC ¶93-499.
[42] Hoult & Hoult [2013] FamCAFC 109; (2013) FLC ¶93-546 at [288]; Parker & Parker [2012] FamCAFC 33; (2012) FLC ¶93-499.
In Hoult,[43] the Full Court of the Family Court of Australia (‘the Full Court’) held that ‘the content of the bargain has no relevance to the exercise of the discretion under s [90UJ](1A)(c) and we base that on the plain words of the paragraph.’ Their Honours further held that ‘the issue of injustice and inequity can far more easily be seen as directed to whether, given the nature and extent of the non-compliance with the s [90UJ](1) requirements, it would be unjust and inequitable if the agreement was not binding.’
[43] [2013] FamCAFC 109; (2013) FLC ¶93-546.
Their Honours in Hoult further held that ‘if there is to be a list of factors identified’ as being appropriate to consider when exercising the discretion, the following are preferred:
·The terms of the section, the nature of a financial agreement as a creature of the Act, and the place of Part [VIIIAB] within the overall scheme of the Act.
·The nature and extent of the non-compliance with the requirements of s [90UJ](1).
·The facts and circumstances surrounding the making of the agreement including, in particular, if one of the parties has complied with all of the mandatory requirements necessary to render the agreement binding.
·How the parties have acted subsequently in relation to the agreement (bearing in mind that changes of circumstances cannot be considered).[44]
[44] Applied in Piper & Mueller [2015] FamCAFC 241; (2015) FLC ¶93-686 at [59] per Ryan & Aldridge JJ.
The requirement that the parties obtain legal advice prior to executing a financial agreement in order for it to be binding has been described as an ‘important legislative safeguard,’ given that the existence of a binding agreement ‘ousts the Court’s jurisdiction to make orders under Part VIII of the Act.’[45] There is, however, no doubt that even where there has been an absence of the requisite advice, a financial agreement can still be held to be binding pursuant to subsection 90UJ(1A)(c).[46]
[45] Kaimal & Kaimal [2020] FamCA 971 at [16].
[46] Logan & Logan [2013] FamCAFC 151; (2013) FLC ¶93-555 at [58]; Hoult & Hoult [2013] FamCAFC 109; (2013) FLC ¶93-546 at [181] per Thackray J and [288] per Strickland & Ainslie-Wallace JJ; Parker & Parker [2012] FamCAFC 33; (2012) FLC ¶93-499.
The onus is on the party seeking to uphold the Agreement, in this case, the De Facto Wife, to adduce evidence to satisfy the Court that it would be unjust and inequitable if the Agreement were not upheld.[47]
[47] Parker & Parker [2012] FamCAFC 33; (2012) FLC ¶93-499.
I have regard to the considerations outlined above as part of the discussion which follows.
Given the exhortation in subsection 90UJ(1A)(c) to disregard any changes in circumstances from the time the Agreement was made, I cannot have regard to the substantial quantum of the payment ultimately received by the De Facto Wife pursuant to the 2009 orders as a basis for determining the justice and equity of holding the Agreement not to be binding. I must also disregard assertions made by the De Facto Husband that his financial circumstances have declined in the period since the proceedings began.
I am likewise unable to have regard, as I was urged by Counsel for the De Facto Wife to do, to the likely outcome of the parties’ competing applications pursuant to section 90SM of the Act, or any comparison between such likely outcome and, to use the words of the Full Court in Hoult, the ‘content of the bargain.’ The concept of being unjust and inequitable within the meaning of subsection 90UJ(1A) is not to be conflated with the consideration of justice and equity which would otherwise be undertaken pursuant to section 90SM.[48] Parties to financial agreements under the Act, including the parties in this case, enter into such agreements, wisely or otherwise, for the purpose of ousting the Court’s jurisdiction to determine a just and equitable settlement. The wisdom of having done so, when viewed with hindsight, is not a relevant consideration.
[48] Hoult & Hoult [2013] FamCAFC 109; (2013) FLC ¶93-546; Graham & Squibb [2019] FamCAFC 33; (2019) FLC ¶93-892; Whittle & Whittle [2023] FedCFamC1F 771.
I do have significant regard, however, consistently with the factors held by the Full Court in Hoult to be relevant, to the facts and circumstances surrounding the performance of the Agreement, and particularly the fact that although its provisions were of no legal force until the breakdown of their relationship, the parties conducted their lives and their relationship in accordance with its terms and consistently with a mutual expectation that it would be implemented if they were to separate.
To the extent that the De Facto Husband made contributions during the parties’ relationship, he did so without any expectation that this would result in him receiving any part of any assets which were characterised by the Agreement as the De Facto Wife’s ‘separate property.’ I note in this regard that even on the De Facto Husband’s case, there is no suggestion of any departure from the terms of the Agreement in any manner which would constitute any form of contribution made by him to the funds received by the De Facto Wife in 2023 and thereby render her retention of those funds unjust. Any increase in the value of the Town Q property during the course of the parties’ relationship occurred by virtue of market forces (and possibly contributions made by the De Facto Wife’s former husband), but not as a result of contributions made by either of the parties.
The De Facto Husband claimed to have made a ‘significant indirect financial contribution’ by way of support of the De Facto Wife during the parties’ relationship. I do not accept this assertion. As outlined above, I accept the De Facto Wife’s evidence that the parties maintained separate finances and she supported herself. Furthermore, nothing done by the De Facto Husband (or indeed by the De Facto Wife) during the parties’ relationship can properly be considered a contribution to the to the acquisition, conservation or improvement of the Town Q property in circumstances in which her entitlements with respect to that property remained out of reach of the De Facto Wife by virtue of the lease held by her former mother-in-law throughout the entirety of the relationship irrespective of the circumstances of the relationship. The De Facto Husband’s evidence was that he had driven the De Facto Wife to Town Q, where she had discussions with her former husband in relation to that entitlement, yet he gave evidence that he ‘stayed out of it and let [the De Facto Wife] deal with it.’
To the extent that there were difficulties with the advice given to each of the parties, these were matters largely within the knowledge (and in some cases within the sole knowledge) of the De Facto Husband. Although I have not accepted that the De Facto Husband did not receive the requisite advice, I note that even if his evidence in this regard had been accepted, the De Facto Wife was entitled to, and indeed had no alternative but to, rely on the statement of legal advice provided by Mr G on its face and to assume that the De Facto Husband had received the advice as set out therein. As discussed earlier, the De Facto Husband was at all material times a builder with considerable experience in contractual relations. He represented to the De Facto Wife, by his signing of the Agreement and the provision of the statement of legal advice to her, that he had received the requisite advice.
If that advice had not in fact been provided to him and the acknowledgement he made in the Agreement was false, this is something he ought to have raised at the time of entering into the Agreement so that the De Facto Wife could have known of the issue and had the opportunity to take steps to rectify it, or at least been aware of it as she made the financial decisions she did during the course of the parties’ relationship. It is also something he should have disclosed to the Court at the commencement of the present proceedings. It would be unjust and inequitable if information that was solely within the knowledge of the De Facto Husband, was not caused or contributed to by the De Facto Wife, and was not disclosed to the De Facto Wife until many years later when the disclosure was to his advantage, was permitted to be relied upon by the De Facto Husband as a basis for departing from the Agreement.
With respect to the deficiency I have found with respect to the legal advice provided to the De Facto Wife, I note as follows:
(a)The connection between the De Facto Husband and Mr F was within the knowledge of the De Facto Husband at all material times;
(b)Although it is not suggested that the De Facto Wife was unaware of the association between the De Facto Husband and Mr F, the extent of both the legal and personal association between the two is a matter about which the De Facto Husband had more detailed knowledge than did the De Facto Wife;
(c)The De Facto Husband raised no objection to Mr F acting for or providing advice to the De Facto Wife with respect to the Agreement notwithstanding his previous association with him. To the contrary, he was by all accounts, a willing participant in the arrangement for Mr F to do so, in circumstances in which he could have chosen to engage Mr F for his own advice or suggested that the De Facto Wife engage a different solicitor;
(d)The De Facto Husband’s lack of concern with respect to this issue would appear to have been confirmed by his apparently contemporaneous engagement of Mr F to prepare his will;
(e)I am not satisfied that there is any prejudice to either party, and most importantly for present purposes to the De Facto Husband, arising as a consequence of the lack of independence in the legal advice provided to the De Facto Wife;
(f)Even if it were the case that the De Facto Wife received no advice at all, as distinct from no independent advice, there is no evidence to suggest that this led to any prejudice or unfairness to the De Facto Husband or affected either his decision to enter into the Agreement or his understanding of its terms and effect;
(g)The issue of any deficiency in the legal advice provided to either party would appear to have been of such little consequence to the De Facto Husband that he entirely neglected to raise it with the De Facto Wife or with the Court until the present proceedings (during most of which the De Facto Husband has been legally represented) had been on foot for approximately 12 months; and
(h)It is of significance that the party who has been found to have been deprived of their right to receipt of the requisite independent advice is the party seeking to rely on the Agreement.
Although the De Facto Husband alleged that there were deficiencies with respect to the legal advice given to each of the parties, he did not assert that he had not properly understood the Agreement or its terms or that he had not understood the consequences of being bound by it. Indeed, the fact that the De Facto Husband was legally represented for a period of at least 10 months during which he sought to enforce the Agreement suggests that he well understood its terms and their consequences for him, or at least that upon becoming aware of such matters, he remained willing (and indeed eager) to be bound by the Agreement. His understanding of the terms of the Agreement is also confirmed by his conduct during the relationship with respect to adherence to it.
I am satisfied that the De Facto Husband suffered no prejudice arising from any irregularity with the legal advice provided to either of the parties with respect to the making of the Agreement and that he made a fully informed decision to enter into the Agreement, fully understanding its terms and effect.
This is not a matter in which the party seeking to set aside the Agreement was simply presented with an Agreement prepared by the other party’s solicitor with little opportunity for input, consideration or negotiation as to its terms. The De Facto Husband was an active participant in the drafting and preparation of the Agreement from its inception and made a willing and informed decision to enter into it and become bound by it. The De Facto Husband made no suggestion and gave me no reason to conclude that but for the asserted deficiencies with the advice provided to each of the parties he would not have entered into the Agreement.
It was entirely reasonable for the De Facto Wife to have trusted and expected that the solicitor upon whom she attended to receive advice would exercise appropriate professional judgment and would not have acted for her if he was compromised or held a conflict of interest in doing so. It would not be just or equitable for the consequences of his failure to do so to be visited upon her in circumstances in which there was no prejudice to the De Facto Husband arising from his actions. This is particularly so in circumstances in which it is the party who was deprived hr right to independent advice who seeks to uphold the Agreement.
The De Facto Husband placed emphasis on the agreed fact that the parties had discussed and considered entering into an ‘updated’ agreement in or around 2019 and had taken steps to do so. He acknowledged that he had not attended upon a lawyer in relation to such a desire. This fact suggests that having specifically turned their minds at a late stage in their relationship to whether they should take steps to terminate the Agreement (and, as a logical extension of this, having specifically turned their minds to the fact that they remained bound by it), the parties did not do so and as a result, consciously remained bound by its terms. This supports, rather than undermines, the suggestion that it would be unjust and inequitable if the Agreement were not binding on the parties.
It is of significance that from the outset of the proceedings until the quantum and imminence of receipt of the De Facto Wife’s share of the proceeds of sale of the Town Q property became known, the De Facto Husband consistently sought to enforce the Agreement. The evidence as a whole suggests that he was eager to enter into a binding financial agreement at the time of execution of the Agreement and consistently remained eager to have the Agreement in place throughout the parties’ relationship, after separation, and during the course of the proceedings, until such time as changes in the financial circumstances of the De Facto Wife caused him to form the view that he would be more favourably served by departing from the Agreement and pursuing an application under section 90SM of the Act. As I have already indicated, his change in position appeared opportunistic. This is a circumstance which weighs heavily in favour of the De Facto Wife’s position that it would be unjust and inequitable if the Agreement were not binding.
The De Facto Husband was, at all material times preceding the change of his position, the party in a position of financial strength, whose interests were best served by the maintenance of the Agreement. His change in position as to whether the Agreement was binding coincided with a change in this regard. By contrast, to the extent that there was any change to the position taken by the De Facto Wife with respect to the maintenance of the Agreement, that change occurred well prior to her receipt of her share of the proceeds of sale of the Town Q property.
The evidence of both parties was that the De Facto Husband had been happy to enter into the Agreement, which had been suggested by the De Facto Wife, for reasons which included an entirely understandable desire to protect his assets for the benefit of his children. He deposed that he had also ‘wanted to avoid a further property settlement’ and I note that the De Facto Husband had been married twice before the commencement of the parties’ relationship. The De Facto Wife had likewise sought to preserve her eventual entitlement with respect to the Town Q property for the children of the marriage to which that entitlement related.
The De Facto Husband sought to qualify his evidence with respect to his attitude towards being bound by the Agreement by saying that this had ‘initially’ been his intention but ‘over time, things change,’ ‘things evolved to be different’ and ‘that just dissipated over time.’ He also repeatedly qualified his acceptance that he had wanted the De Facto Wife to understand that his ‘separate property’ was to remain his, that his money was his, and similar admissions by saying this had been his position ‘initially’ because it was ‘very early’ in the parties’ relationship.
The De Facto Husband also qualified his evidence with respect to the parties having ensured that their financial contributions to joint expenses had been equal and that each had remained responsible for their own bills by saying that this had been the case ‘initially.’ He asserted under cross-examination that ‘it evolved to the point where the BFA no longer had a place in the relationship.’ He also asserted in the witness box (but not in his affidavit evidence) that the parties had intended to see a conveyancer to change the legal ownership of the Suburb C property to equal shares because ‘the relationship had evolved’ and the parties were ‘no longer respecting the BFA.’
This evidence did not sit at all well with the fact that he not only continued to assert that the Agreement should be enforced up until the present proceedings had been on foot for approximately 12 months but was legally represented for most of the time during which he did so. I gained the impression that the De Facto Husband’s evidence with respect to a change in the approach taken by the parties to adherence with the terms and intention of the Agreement had been crafted to suit his case rather than being a genuine recollection of the actions and attitudes held by the parties during their relationship.
Despite the De Facto Husband’s insistence that the parties’ commitment to and level of adherence to the terms of the Agreement had waned over time, the evidence does not suggest that this occurred in any manner which favoured the De Facto Wife or lessened the impact of the Agreement on her. The De Facto Husband derived the full benefit of being the financially stronger party to the Agreement, including having all properties purchased by him at his sole discretion registered in his sole name and having free and unfettered use of significant funds for his sole benefit. This state of affairs continued, to his significant benefit, after the parties’ separation, and enabled him to continue to develop real property, to invest in and sell assets, and to make lifestyle purchases such as motor vehicles, without reference to the De Facto Wife.
Counsel for the De Facto Wife submitted that not only does the law provide that the contents of the Agreement need not be fair, they need only be agreed,[49] but in this particular case the De Facto Husband made clear by his conduct, both throughout the relationship and during the early part of the proceedings, that he did in fact consider the contents of the Agreement to be fair (at least to him), and acted deliberately to ensure that they would be adhered to. I accept that submission.
[49] Hoult & Hoult [2013] FamCAFC 109; (2013) FLC ¶93-546; Fewster & Drake [2016] FamCAFC 214; (2016) FLC ¶93-745.
Counsel for the De Facto Husband submitted that it was of significance that it was not until early 2023, which was after receipt of her share of the proceeds of sale of the Town Q property, that the De Facto Wife amended her application and sought to uphold the Agreement. This submission has superficial appeal but overlooks the fact that as early as 28 April 2022, prior to the De Facto Husband filing any responding material and nearly a year prior to the receipt of her entitlements pursuant to the 2009 orders, the De Facto Wife’s then-solicitor wrote to the De Facto Husband expressly and unequivocally confirming that the De Facto Wife did not intend to seek to set the Agreement aside, and that a notation to the same effect was recorded on orders made at a directions hearing on 23 May 2022, which was also well prior the receipt of the funds.
Counsel for the De Facto Husband pointed to the absence of any reference to her entitlements pursuant to the 2009 orders (which had not yet crystallised) in the Financial Statement filed by the De Facto Wife contemporaneously with her Initiating Application on 25 February 2022. The affidavit filed at the same time disclosed the existence of her interest pursuant to the 2009 orders (albeit briefly) and also annexed a copy of the Agreement, which contained reference to that entitlement. I am not satisfied that the De Facto Wife attempted to hide the existence of that interest from the Court and accept the submission made on her behalf that a reader of the documents filed by her would ‘readily see’ that she had held an interest in the Town Q property pursuant to the 2009 orders.
Counsel for the De Facto Husband also referred to the absence of any reference to the 2009 orders or the De Facto Wife’s entitlements in relation thereto in a case outline document filed by her on 9 February 2023. I note, however, that that document did not traverse the details of the parties’ financial circumstances save to the extent that they were relevant to the question of the orders required to be made to implement the Agreement (being a position then taken by both parties). I am unable to draw any conclusions or inferences adverse to the De Facto Wife from the contents of that document.
Counsel for the De Facto Husband was critical in his closing submissions of the fact that there was limited evidence before the Court as to precisely when the De Facto Wife had become aware that her former mother-in-law had surrendered her leasehold interest and her entitlements under the 2009 orders had crystalised; when she had gained an appreciation of the extent of her interests pursuant to those orders; and if and when she had given her former husband consent to auction the land (such consent having been required pursuant to those orders, which restrained the former husband from dealing with the land prior to payment having been made to the De Facto Wife). I note that the 2009 orders in fact permitted the De Facto Wife’s former husband ‘in his sole discretion’ to determine to subdivide and sell a portion of the Town Q property in order to make the payment to the De Facto Wife. In any event, the De Facto Wife was not cross-examined about any of these matters or otherwise put on notice of the need to meet this allegation, and in my view the rule in Browne v Dunn[50]operates to preclude any imputation against the De Facto Wife in these circumstances.
[50] (1893) 6 R 67 HL. See also MWJ v R [2005] HCA 74; Jacks & Sampson [2008] FamCAFC 173; (2008) FLC ¶93-387; LC & TC [1998] FamCA 47; (1998) FLC ¶92-803.
By way of Response to Initiating Application filed on 20 May 2022, the De Facto Husband sought a declaration that the Agreement was binding and consequential orders to enforce its terms. The De Facto Husband acknowledged that he had, by the affidavit he had filed with that Response, intended to ensure that the Court understood that the various properties he had purchased and the proceeds of those he had sold had been his alone. He gave evidence that he recalled feeling, at the time of filing that Response, ‘as though [he] could lose money to the proceedings.’
A notation to orders made on 9 November 2022 (at which time it was the position of both parties that the Agreement should be upheld) recorded that an in principle agreement had been reached between the parties. These circumstances cast considerable doubt on the De Facto Husband’s evidence that he had only ‘initially’ acted in accordance with the terms of the Agreement and had, during the relationship, formed an intention to depart from its terms.
Two of three parts of the Town Q property were sold in early 2023, over 9 months after the De Facto Wife had first confirmed that she sought to enforce the Agreement. The De Facto Wife then became entitled to the sum of $4,224,767 pursuant to the 2009 orders. The De Facto Wife’s evidence was that she believed that the leasehold interest held by her former mother‑in‑law had been terminated shortly prior to the sale, and that the value of her entitlement had been calculated by lawyers based on the total acreage of the property having regard to her former husband’s retention of one third of the land.
In early 2023, less than a month after the De Facto Wife received the funds, the De Facto Husband departed for the first time from his longstanding position that the Agreement ought to be enforced and indicated to the Court that he intended to amend his application to seek to set it aside and seek orders pursuant to section 90SM of the Act. By way of Amended Response filed on 27 February 2023, the De Facto Husband sought, for the first time, that the Agreement be set aside.
The De Facto Husband acknowledged that he had become aware of the sale in early 2023, but his evidence as to how this had come about was difficult to follow. He said that he had learned of the sale by calling the selling agent, whose details he had obtained from an online listing, that he had not looked the property up on that site at all until it had gone on the market, but that he had become aware that it had gone on the market by doing a search of that site. He also said that the selling agent had told him of the sale price, but he had not learned of the De Facto Wife’s expected entitlements until he had ‘found out’ from the Land Titles Office, although he denied having done a Land Titles Office search, but then said that his lawyer had told him of the settlement funds that were to be received by the De Facto Wife. However he learned of the De Facto Wife’s entitlement, he described his reaction as having been ‘shocked.’
When it was put to the De Facto Husband that the De Facto Wife having become entitled to receive her share of the proceeds of sale of the Town Q property was the only thing that had changed between the filing of his original Response seeking to uphold the Agreement and the filing of his Amended Response seeking that it be set aside, he responded ‘on the surface that sounds correct.’
Very late in his evidence, having been cross-examined extensively about these issues at an earlier juncture and having made no such suggestion in either of the affidavits upon which he relied at trial, the De Facto Husband suddenly asserted for the first time that the position in his original Response had been ‘signed without [his] knowledge’ and that he had not wanted to ‘use the BFA from the onset’ but his solicitor had informed the Court that he did and told him he ‘just had to go along with it,’ so he had ‘signed a document that was incorrect.’ This evidence did not sit well with his earlier evidence that it had not been until 2023 that he had learnt of any difficulty with the Agreement and that it had been becoming aware that there had been an issue with respect to the advice he had been given which had prompted him to change his application. In addition to contradicting the De Facto Husband’s earlier assertions, this evidence was inherently implausible for a number of reasons, including the fact that it had not been raised at any earlier time and the fact that the De Facto Husband (unlike the De Facto Wife) had continued to instruct the same solicitors against whom he had levelled accusations of such serious misconduct. I do not accept that evidence. I consider it indicative of a willingness demonstrated at times by the De Facto Husband to give evidence that was tailored to suit his desired outcome rather than representing an accurate account of events.
It was submitted on behalf of the De Facto Husband, by reference to the asserted deficiencies in the documents originally filed by the De Facto Wife, that he had been ‘in the dark’ with respect to the value of the De Facto Wife’s interest pursuant to the 2009 orders and that had she put forward the correct position that she had a financial resource in the form of an entitlement of approximately $4 million, the De Facto Husband may have been in a position at an earlier stage to give clear instructions, receive advice and file the appropriate documents. This submission, however, serves to support the De Facto Wife’s case that the De Facto Husband’s position with respect to the Agreement was driven not by any legitimate concern with respect to the Agreement itself but by a desire to obtain a share of the De Facto Wife’s entitlements pursuant to the 2009 orders.
I accept the submission of Counsel for the De Facto Wife that the timing of the change to the De Facto Husband’s position was not coincidental. I am satisfied that the De Facto Husband was solely or predominantly motivated by an opportunistic desire to claim a share of the funds received by the De Facto Wife pursuant to the 2009 orders in changing his position with the respect to the Agreement and belatedly raising asserted irregularities with respect to the legal advice received by the parties, and that prior to the De Facto Wife’s entitlements pursuant to the 2009 orders having crystallised, he was not only willing but eager to ensure that the Agreement remained in force.
The De Facto Husband was aware from the time the Agreement was signed that he ought to have received the advice he later claimed he had not received from Mr G. He was aware of his own connections with Mr F at all material times. He was aware from the commencement of the proceedings of the issue he subsequently raised with respect to the question of whether Mr F had in fact provided advice to the De Facto Wife. He had experienced lawyers acting for him in relation to these proceedings from April 2022, at which time the question of whether the De Facto Wife had been properly advised was a live issue. Despite his knowledge of all these matters and the fact that he was represented, he steadfastly maintained his position that the Agreement ought to be upheld until such time as the De Facto Wife came into significant funds.
To decline to hold that the Agreement was binding on the parties would effectively be to allow the De Facto Husband to choose when the parties would be bound by its terms and when they would depart from them, depending on fluctuations in the De Facto Wife’s financial circumstances and whether he perceived that he stood to obtain a more favourable outcome with or without the Agreement in place. This would, in my view, be unjust and inequitable.
It would also be contrary to the legislative intention evinced by the introduction into the Act of provision for parties to enter into binding agreements with respect to how their property and financial resources are to be dealt with upon the breakdown of their relationships, which was to encourage people to take control of their financial affairs by enabling them to make binding financial agreements about their property and to enhance certainty of outcomes.[51]
[51] Explanatory Memorandum, Family Law Amendment Bill 2000 (Cth).
Counsel for the De Facto Husband submitted that for the De Facto Wife to receive 40 percent of the net proceeds of the Suburb C property, being the outcome provided for by the Agreement, would be a ‘manifestly unfair outcome’ having regard to the quantum of her contributions towards the acquisition of that property. However, as the Full Court held in Hoult, the content of the bargain has no relevance to the exercise of the discretion under s 90UJ(1A).
For these reasons, I am satisfied that it would be unjust and inequitable if the Agreement were not binding on the parties.
In light of the findings outlined above with respect to subsection 90UJ(1A), this conclusion would have been the same even if I had been persuaded that the De Facto Husband had not been provided with the requisite advice by Mr G.
THE ORDERS TO BE MADE
As a consequence of the findings set out above, there will be a declaration pursuant to subsection 90UJ(1B) that the Agreement is binding on the parties.
In the event that such a determination was made, the De Facto Wife sought orders pursuant to subsection 90UJ(4) of the Act enforcing the terms of the Agreement. The orders she sought in this regard provided, in summary, that the Suburb C property be sold and the net sale proceeds be divided in proportions of 60 percent to the De Facto Husband and 40 percent to the De Facto Wife, that the sum of $55,000 be returned to her, and that various personal items of the De Facto Wife be delivered up to her by the De Facto Husband.
There was no dispute between the parties that in the event that the Agreement was held to be binding, the orders sought by the De Facto Wife were the appropriate orders to be made by way of enforcement of the terms of the Agreement. As such, orders will be made in the terms sought by the De Facto Wife, save that, for the purpose of clarity, the orders will specify that the sum of $55,000 is to be paid to the De Facto Wife from the parties’ joint offset account where those funds have been held and not from the Husband’s separate property.
COSTS
Each of the parties sought an order that the other pay their costs. Those applications were not particularised and were not expressly pressed at trial. In my view, it would not, in any event, be appropriate to consider any application for costs prior to the parties having had the opportunity to have regard to these reasons and to adduce evidence of any offers which may have passed between them. Each of the parties will retain their rights to make an application for costs pursuant to rule 12.13(3)(b) of the Rules should they consider it appropriate to do so notwithstanding the dismissal of all extant applications.
CONCLUSION
For the reasons outlined above, I make the orders set out at the commencement of these reasons.
I certify that the preceding one hundred and eighty-seven (187) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Parker. Associate:
Dated: 1 August 2024
0
23
3