Hoult & Hoult - [2011] FamCA 1023

FAMILY COURT OF AUSTRALIA

HOULT & HOULT

[2011] FamCA 1023

FAMILY LAW – PROPERTY – BINDING FINANCIAL AGREEMENT – where the wife applies to have a financial agreement set aside – where no dispute as to whether the agreement was a “financial agreement” – where wife claims the agreement is not binding – whether the agreement complies with s 90G of the Family Law Act 1975 – where the solicitor’s advice was less than satisfactory – where no evidence to suggest the wife was informed of the advantages and disadvantages of the agreement as required by s 90G(1)(b) – where agreement not binding.

FAMILY LAW – PROPERTY – BINDING FINANCIAL AGREEMENT – where the wife claims the agreement was obtained by fraud and thus not binding (s 90K(1)(a)) – whether the husband failed to disclose a material fact with the intention to deceive – where the husband admits he failed to disclose a boat in the Schedule of assets annexed to the agreement – where no evidence to suggest husband’s failure to disclose was spurred by an intention to deceive the wife – where the wife also claims that the husband failed to disclose impact of previous Family Court orders on his assets – where no evidence to suggest that any such non-disclosure was attended by an intention on the part of the husband to deceive – where no fraud proven.

FAMILY LAW – PROPERTY – BINDING FINANCIAL AGREEMENT – where the wife claims that the agreement was obtained by way of unconscionable conduct on the part of the husband (s 90K(1)(e)) – whether wife at a “special disadvantage” vis-à-vis the husband – whether the husband knew of, or ought to have known, that the wife was at a special disadvantage – where the wife was at a “special disadvantage” vis-à-vis the husband due to a number of factors of which the husband was aware – where no evidence that the husband has unconscientiously taken advantage of the wife’s “special disadvantage” – where the husband’s conduct was not unconscionable.

Evidence Act 1995 (Cth)
Family Law Act 1975 (Cth)
Federal Justice System Amendment (Efficiency Measures) Act (No 1) 2009 (Cth)

Arnautovic & Sutherland t/a Jirsch Sutherland & Co Arnautovic & Ors v Cvitanovic (as Trustee of the Bankrupt Estate of Rosee) [2011] FCA 809
Attorney-General (NSW) v World Best Holdings Pty Ltd (2005) 65 NSWLR 557
Australian Securities and Investments Corporation & Rich & Another (2003) FLC 93-171
Australasian Brokerage Limited v Australian & New Zealand Banking Corporation Ltd (1934) 52 CLR 430
Black & Black (2008) FLC 93-357
Blackmore & Webber [2009] FMCAfam 154
Blomley v Ryan (1956) 99 CLR 362
Bridgewater v Leahy (1998) 194 CLR 457
Briginshaw v Briginshaw (1938) 60 CLR 336
Commercial Bank of Australia Ltd v Amadio (1983) 151 CLR 447
Cording & Oster [2010] FamCA 511
Dew v Richardson [1999] QSC 192
Dixon v Lekich [2010] QCA 213
Environment Protection Authority v Unomedical Pty Ltd (No 3) [2010] NSWLEC 198
Fevia & Carmel-Fevia (2009) FLC 93-411
Griffith v Evans [1953] 1 WLR 1424
J & J [2006] FamCA 442
Kostres & Kostres (2009) FLC 93-420
Krakowski and Another v Eurolynx Properties Limited and Another (1995) 183 CLR 563
Louth v Diprose (1992) 175 CLR 621
Magill v Magill (2006) 226 CLR 551
Northside Developments Pty Ltd v Registrar-General (1990) 170 CLR 146
Senior & Anderson (2011) FLC 93-470
Smith v Chadwick (1884) 9 App Cas 187
Stoddard & Stoddard [2007] FMCAfam 735
Sullivan & Sullivan [2011] FamCA 752
Turner v Windever [2003] NSWSC 1147
United Dominions Corp Ltd v Brian Pty Ltd (1985) 157 CLR 1
Yerkey v Jones (1939) 63 CLR 649

APPLICANT:

Ms Hoult

RESPONDENTS:

Mr Hoult and S Pty Ltd and T Pty Ltd

FILE NUMBER:

BRC

3036

2011

DATE DELIVERED:

22 December 2011

PLACE DELIVERED:

Brisbane

PLACE HEARD:

Brisbane

JUDGMENT OF:

Murphy J

HEARING DATE:

6 & 7 September 2011

REPRESENTATION

COUNSEL FOR THE APPLICANT:

Mr Page SC

SOLICITOR FOR THE APPLICANT:

Herbert Geer

COUNSEL FOR THE RESPONDENTS:

Mr Galloway

SOLICITOR FOR THE RESPONDENTS:

Peter Sheehy Solicitor

Orders

IT IS DECLARED THAT that the financial agreement made between the husband and the wife pursuant to s 90B of the Act is not binding within the meaning of s 90G of the Family Law Act 1975 (Cth) (“the Act”).

IT IS ORDERED THAT

Each of the husband and wife file within 42 days of the date of these Orders:
(a)Such further affidavits as they might be advised, confined to the issue of the application of s 90G(1A) of the Act; and
(b)Written submissions pertaining to the application of s 90G(1A) of the Act to the facts of this case.
Contemporaneously with the filing of the documents referred to in paragraph (1) of these Orders, the legal practitioners for the parties shall jointly forward an e-mail to Justice Murphy’s Associate advising as to whether either or both parties require:
(a)The deponent of any affidavit filed pursuant to Order 1(a) to be cross-examined; and/or;
(b)To supplement orally the written submissions filed pursuant to Order (1)(b).
In the event that, pursuant to Order (2), one or both parties require either the cross-examination of a deponent or to supplement the said written submissions orally, the matter be listed before Justice Murphy on a date and at a time to be advised.
In the event that the parties reach agreement as to any aspect of the issues outstanding between them, they be at liberty to forward jointly via e-mail to Justice Murphy’s Associate Minutes of Consent in which event, any such orders shall be considered in chambers by Justice Murphy and, if considered appropriate, Orders made by consent, in accordance with Minutes, without the necessity of further appearance by either party.

IT IS NOTED that publication of this judgment under the pseudonym Hoult & Hoult is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

FAMILY COURT OF AUSTRALIA AT BRISBANE

FILE NUMBER: BRC 3036 of 2011

Ms Hoult

Applicant

And

Mr Hoult and S Pty Ltd and T Pty Ltd

Respondents

REASONS FOR JUDGMENT

About a month after separating from the husband in March 2011, the wife commenced proceedings for settlement of property in the Federal Magistrates Court. As the procedures of that court dictate, her Application was accompanied by an affidavit. Neither the Application nor the affidavit made mention of a financial agreement executed by the wife and husband in reliance upon s 90B of the Family Law Act 1975 (Cth) (“the Act”) in December 2004, prior to their marriage which took place on 17 December 2004. The parties had resided together for seven or eight years prior to that.
The agreement signed by each of the parties contained a certificate signed by a solicitor for each of the parties. The certificates are in identical terms and certify to advising the respective party “independently of the other party” and to advising each respective party, before each of them respectively signed the agreement, as to “the effect of the agreement on the rights of the parties” and “the advantages and disadvantages at the time that the advice was provided …”.
In these proceedings, the wife says that the agreement is not binding within the meaning of s 90G of the Act, or, in the alternative, that it ought be set aside as unconscionable or because it is vitiated by fraud (s 90K). The husband relies upon the agreement as determining the parties’ rights to settlement of property and maintenance to the exclusion of Part VIII of the Act (s 71A).

What is The Wife’s Case?

The wife’s Reply (filed 7 July 2011) contained the relief sought in respect of the agreement. It is in the following relevant terms:
…
2.That the Financial Agreement between the Applicant and the Respondent dated 17 December 2004 be set aside;
3.That this Honourable Court declare that the Financial Agreement between the Applicant and the Respondent dated 17 December 2004 is not a financial agreement in terms of Part VIIIA of the Family Law Act; or
4.That this Honourable Court declare that the Financial Agreement between the Applicant and the Respondent dated 17 December 2004 does not exclude or limit the power of the Court to make an order in relation to the maintenance of the Wife …
Upon transfer of the matter to this Court, pleadings were ordered. The intent was to have the particulars of the wife’s claim articulated. The document filed by the wife in compliance with that order (entitled “Statement of Applicant’s Claim”) bears only a passing resemblance to what might properly be called a pleading. No point to that effect was taken; the wife’s case can be discerned, although, as will be seen, deficiencies remain.
In the “Statement of Applicant’s Claim” the wife purports to plead a case that holding her to the agreement would be unconscionable. That assertion in the document is accompanied by what are said to be “Particulars of unconscionable conduct”. Those “Particulars” will be detailed later in these reasons.
A separate assertion in the pleading is that the agreement “was obtained by fraud” (s 90K(1)(a)). That allegation is also accompanied by “Particulars”. They, too, will be detailed later in these reasons.
It is separately pleaded that the agreement is not binding within the meaning of s 90G of the Act. That claim is founded, it seems, on a number of specific paragraphs of the Statement of Applicant’s Claim which, again, will be set out later in these reasons. Broadly, it is asserted that the wife was never provided with the advice required by s 90G. In addition, as will be seen, although it is asserted that a copy of the agreement was provided on 15 May 2008 ([21]), the “Particulars” as to why the agreement is not binding include an assertion that “a copy of the agreement was at no time given to [the wife]” ([22(b)]).

The Terms of the Agreement

The Recitals to the financial agreement include, under the heading “Disclosure”, the following:
The parties have each fully disclosed the nature and extent of their property and financial resources.
(i)The FIRST SCHEDULE and the SECOND SCHEDULE are statements by [the husband] and [the wife] respectively of their significant property, financial resources and liabilities at the date of the signing of this Agreement.
(ii)The attached Schedules are not intended to be a detailed and precise inventory of the property and financial resources of the parties, but are intended to show, and they do show, that each party has made substantial and full material disclosure to the other party. The values where given, constitute a fair estimate of the value of the respective property and the financial resources of the parties.
(iii)The parties each acknowledge that they have been furnished with a copy of the Schedule of the other party’s property and financial resources in advance of the execution of this Agreement. Having regard to their own independent knowledge of the other party’s property and financial resources, each party has had sufficient time and opportunity to satisfy himself or herself as to the accuracy of the other party’s statements of property and financial resources and to make any enquiries or seek clarification on the statements so made. Both parties have declined to avail themselves of the opportunity for further enquiry and are satisfied to accept what is contained in the schedules attached to this agreement.
…
N.Both [the husband] and [the wife] acknowledge that prior to the signing of this Agreement they each received independent legal advice from separate legal practitioners as to the following matters:-
(a)the effect this [sic] Agreement on the rights of the parties;
(b)the advantages and disadvantages, at the time that the advice was provided, to the party of making agreement.
The operative provisions of the deed contain the following:
…
8.[The husband] and [the wife] acknowledge that they entered this Agreement of their own free will and volition and that no coercion, force or undue influence has been used in the execution of this Agreement either by the other party or by any other person or persons.
9.[The husband] and [the wife] each acknowledge that neither has relied upon any representation or promise in making this Agreement except those expressly stated therein.
10.In the preparation of this Agreement and prior negotiations, [the husband] has been represented by PETER JOHN SHEEHY, Solicitor of the law firm Peter J Sheehy, Solicitor. [The wife] understands and acknowledges that the firm Peter J Sheehy, Solicitor, does not represent her in relation to this matter nor has the firm made any representation to her concerning this agreement and prior negotiations.
11.In the preparation of this agreement, and prior negotiations, [the wife] has been represented by [MS K], Solicitor of the law firm [K…]. [The husband] understands and acknowledges that the firm [Ms K] does not represent him in relation to this matter nor has the firm made any representations to him concerning this Agreement and prior negotiations.
12.[The husband] and [the wife] agree and acknowledge the terms of this Agreement may be pleaded as a bar by the parties hereto in relation to any application pursuant to Sections 72 and 79 of the Family Law Act as amended.
…
19.[The husband] shall bear his own legal costs and the reasonable legal costs of [the wife] of and incidental to the preparation and execution of this agreement, including the obtaining of independent legal advice from their respective Solicitors.
The agreement is signed and witnessed by each of the parties. There are two “Certification[s] of Independent Legal Advice” attached to the agreement, one in respect of each party. In respect of the wife, it is in these terms:
CERTIFICATION OF INDEPENDENT LEGAL ADVICE
I, [MS K], Solicitor of [K…] Solicitor, hereby certify that in relation to a Deed of Agreement in writing proposed to be entered into by [THE HUSBAND] and [THE WIFE] (hereinafter called “the parties”), I advised [THE WIFE] (hereinafter called “my client”) independently of the other party and before the time of which my client signed the Deed of Agreement, as to the following matters:
(a) the effect this [sic] Agreement on the rights of the parties;
(b)the advantages and disadvantages, at the time that the advice was provided, to the party of making the agreement.
DATED this 10^th day of December 2004.
(Sgd) [Ms K]
As referred to in the Recitals, the agreement also contains a page in the following terms:
FIRST SCHEDULE
[The Husband’s] Property and financial resources:
As per the attached Statement of Position on [H Accountant Pty Ltd] letterhead being [the husband’s] position as at 30^th June 2004.
SECOND SCHEDULE
[The Wife’s] Property and financial resources:
Jewellery
Personal Possessions
Thereafter there appears a listing of assets and liabilities on a H Accountant Pty Ltd letterhead. Above a tabular listing of the assets appears the following:
[T] PTY LTD
[S] PTY LTD
[MR HOULT]
STATEMENT OF POSITION
The table of Assets and Liabilities shows total gross assets exceeding $35 million and total liabilities in the region of $3 million with a consequent net position of $31,886,304.
On a following page, with the same heading as that earlier indicated, is contained (also on letterhead) a document with a number of entities listed under the heading Note 1. That note cross-refers to an item on the table of assets: “Shares – [B] Group (refer to Note 1)”. On the separate page under the heading Note 1, it is said “[t]he Companies included in the [B] Group value are as follows:” and, thereafter, 19 separate entities are listed.
The solicitor providing the certification to the agreement as to giving advice to the wife was called as a witness in the proceedings pursuant to subpoena. She was called not by the wife, but by the husband.

What Are the Relevant Legislative Provisions?

Given the nature of the claim by the wife and the complexities of the legislative provisions, including, in particular, the retrospective operation of amendments to s 90G, it is important, I think, to set out the relevant sections of the Act.
Part VIII of the Act is rendered inapplicable to “financial matters to which a financial agreement that is binding on the parties to the agreement applies” (s 71A(1)(a)).
Section 90G of the Act determines whether a financial agreement “is binding on the parties to the agreement”. That section provides:
90G When financial agreements are binding
(1)Subject to subsection (1A), a financial agreement is binding on the parties to the agreement if, and only if:
(a)the agreement is signed by all parties; and
(b)before signing the agreement, each spouse party was provided with independent legal advice from a legal practitioner about the effect of the agreement on the rights of that party and about the advantages and disadvantages, at the time that the advice was provided, to that party of making the agreement; and
(c)either before or after signing the agreement, each spouse party was provided with a signed statement by the legal practitioner stating that the advice referred to in paragraph (b) was provided to that party (whether or not the statement is annexed to the agreement); and
(ca)a copy of the statement referred to in paragraph (c) that was provided to a spouse party is given to the other spouse party or to a legal practitioner for the other spouse party; and
(d)the agreement has not been terminated and has not been set aside by a court.
Note: For the manner in which the contents of a financial agreement may be proved, see section 48 of the Evidence Act 1995.
(1A)A financial agreement is binding on the parties to the agreement if:
(a)the agreement is signed by all parties; and
(b)one or more of paragraphs (1)(b), (c) and (ca) are not satisfied in relation to the agreement; and
(c)a court is satisfied that it would be unjust and inequitable if the agreement were not binding on the spouse parties to the agreement (disregarding any changes in circumstances from the time the agreement was made); and
(d)the court makes an order under subsection (1B) declaring that the agreement is binding on the parties to the agreement; and
(e)the agreement has not been terminated and has not been set aside by a court.
(1B)For the purposes of paragraph (1A)(d), a court may make an order declaring that a financial agreement is binding on the parties to the agreement, upon application (the enforcement application) by a spouse party seeking to enforce the agreement.
(1C)To avoid doubt, section 90KA applies in relation to the enforcement application.
(2)A court may make such orders for the enforcement of a financial agreement that is binding on the parties to the agreement as it thinks necessary.
The agreement in this case was made “on or after 27 December 2000”. As a consequence, the Federal Justice System Amendment (Efficiency Measures) Act (No 1) 2009 (Cth) (“the Amending Act”) has application to the agreement. That legislation has retrospective effect and its retrospective operation is applicable to the agreement under consideration here.
In Senior & Anderson (2011) FLC 93-470 I considered the provisions of the Amending Act and its application to s 90G in some detail. As is there explained, both Item 8 and Item 8A of the Amending Act have application to financial agreements made after 14 January 2004 and before 4 January 2010. The agreement in the instant case falls within that timeframe.
As I said in Senior, it seems to me that the effect of the applicability of both of those Items of the Amending Act is to render s 90G, as applicable to the agreement in this case, to be in the following terms.[1]
1.I have here used the same “consolidated” form of s 90G provided by counsel for the appellant in Senior which, in my view, is correct.
90G When financial agreements are binding
(1)Subject to subsection (1A), a financial agreement is binding on the parties to the agreement if, and only if:
(a) the agreement is signed by all parties; and
(b)before signing the agreement, each spouse party was provided with independent legal advice from a legal practitioner about the effect of the agreement on the rights of that party and about the advantages and disadvantages, at the time that the advice was provided, to that party of making the agreement;
OR
before signing the agreement, the spouse party was provided with independent legal advice from a legal practitioner about:
i.the effect of the agreement on the rights of that party; and
ii.whether or not, at the time when the advice was provided, it was to the advantage, financially or otherwise, of that party to make the agreement; and
iii.whether or not, at that time, it was prudent for that party to make the agreement; and
iv.whether or not, at that time and in the light of such circumstances as were, at that time, reasonably foreseeable, the provisions of the agreement were fair and reasonable.
(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 the italicised text or, in the alternative, stating that the advice referred to in the underlined text in paragraph (b) above, was provided to that party (whether or not the statement is annexed to the agreement); and … (footnotes omitted)

Relevant to the case asserted by the wife, in respect of unconscionability or fraud, the Act provides:
90K Circumstances in which court may set aside a financial agreement or termination agreement
(1)A court may make an order setting aside a financial agreement or a termination agreement if, and only if, the court is satisfied that:
(a)the agreement was obtained by fraud (including non‑disclosure of a material matter); or
(aa)a party to the agreement entered into the agreement:
(i)for the purpose, or for purposes that included the purpose, of defrauding or defeating a creditor or creditors of the party; or
(ii)with reckless disregard of the interests of a creditor or creditors of the party; or
(ab)a party (the agreement party) to the agreement entered into the agreement:
(i)for the purpose, or for purposes that included the purpose, of defrauding another person who is a party to a de facto relationship with a spouse party; or
(ii)for the purpose, or for purposes that included the purpose, of defeating the interests of that other person in relation to any possible or pending application for an order under section 90SM, or a declaration under section 90SL, in relation to the de facto relationship; or
(iii)with reckless disregard of those interests of that other person; or
(b)the agreement is void, voidable or unenforceable; or
…
(e)in respect of the making of a financial agreement—a party to the agreement engaged in conduct that was, in all the circumstances, unconscionable; …
Section 90KA provides:
90KA Validity, enforceability and effect of financial agreements and termination agreements
90KAThe question whether a financial agreement or a termination agreement is valid, enforceable or effective is to be determined by the court according to the principles of law and equity that are applicable in determining the validity, enforceability and effect of contracts and purported contracts, and, in proceedings relating to such an agreement, the court:
(a)subject to paragraph (b), has the same powers, may grant the same remedies and must have the same regard to the rights of third parties as the High Court has, may grant and is required to have in proceedings in connection with contracts or purported contracts, being proceedings in which the High Court has original jurisdiction; and
(b)has power to make an order for the payment, by a party to the agreement to another party to the agreement, of interest on an amount payable under the agreement, from the time when the amount became or becomes due and payable, at a rate not exceeding the rate prescribed by the applicable Rules of Court; and
(c)in addition to, or instead of, making an order or orders under paragraph (a) or (b), may order that the agreement, or a specified part of the agreement, be enforced as if it were an order of the court.

Onus and Standard of Proof

Mr Galloway, counsel for the husband, contends that there is a “shifting onus” consistent with the proposition that “the party who asserts must prove”. Thus, it is said, the onus of establishing that there is a financial agreement which is binding rests upon the husband while the onus of establishing that there are factors which render the agreement not binding within the meaning of s 90G, or that the agreement should be set aside by reason of, relevantly, unconscionability or fraud within the meaning of s 90K, rests with the wife.
I accept that submission.
The standard of proof is upon the balance of probabilities (s 140, Evidence Act 1995 (Cth)) but, in applying that standard, the Court must take account of a number of specific matters: “(a) the nature of the cause of action or defence; and (b) the nature of the subject-matter of the proceeding; and (c) the gravity of the matters alleged” (s 140(2), Evidence Act).

Credibility and Reliability of Evidence

As will be seen, much turns in this case on the credibility of the parties and Ms K and the reliability of the evidence given by each.

The Parties

Each of the parties (and other witnesses) was being asked to recall events that occurred nearly seven years ago. Memory and recall are potentially affected by the passing of the years. I have taken this consideration into account in assessing the credibility and reliability of the evidence of the parties (and the witnesses).
Each of the husband and wife must plainly be aware (through the process of receiving legal advice, pleading and swearing of affidavits) that their answers on central factual matters may have the potential to have legal consequences. That, too, has the potential to colour recall and the evidence more generally. I consider that each party’s evidence was affected by this consideration but, in my assessment, the wife’s significantly more so.
I have taken account of the fact that English is not the first language of the wife. In saying that, I also make a number of observations. Her affidavits, written in English, are comprehensive. Their jurats do not reveal the use of an interpreter. While the wife deposes in her evidence in chief (e.g. at [187] and [190]) to not understanding, or not fully understanding, what was being said or read to her, she makes no reference to any particular concern with English. The wife deposes to assisting the husband “with his business endeavours in Australia and [overseas] …” and to having “joined with [the husband] in entertaining and otherwise assisting his business colleagues”.
The husband, though, in seeking during his cross-examination to assert that the possible terms of a financial agreement were earlier discussed with the wife, said that, although the wife conversed in English and had no particular difficulties with it, he nevertheless went carefully through aspects of an earlier written document with her because of concerns about her comprehension of it.
In assessing the credit of the wife and the reliability of her evidence, I have made allowance for the fact the English is not her first language. There is, I think, a difference between day-to-day fluency in a language (which I consider the wife plainly has) and a comprehension of the nuances of it. I think her understanding of English, evident in what I considered to be a genuine inability to fully comprehend some of the propositions put to her in cross-examination, is compromised in the latter of the two respects just referred to.
The wife deposes to being prescribed Prozac for depression. The wife’s demeanour in the witness box (and courtroom generally) evidenced an emotionally labile person, significantly stressed by the proceedings. I also take account of her depression and the obvious stress caused by the proceedings in assessing her evidence, including, in particular her demeanour in the witness box.
Giving full weight to each and all of those factors, I was, nevertheless, left with concerns about the wife’s reliability. I consider that, in at least some aspects of her evidence, she has allowed what she would like to be the truth to become the truth.
I consider that is particularly true of her evidence in respect of earlier draft versions of the financial agreement to which further reference will be made below and, for example, her evidence as to the payment of her solicitor’s account which, I find, did not occur on the day of consultation as she alleges. Cross-examination of the wife produced a concession that paragraph 22(b) of her Statement of Particulars of Claim (“a copy of the agreement was at no time given to the [wife]”) was false.
Despite making a specific (serious) factual assertion that “the [husband] gave instructions to the solicitor engaged by him to provide independent advice to the [wife] that if she did not sign the agreement drawn on his instruction that the wedding would not take place” (Statement of Particulars of Claim at [E]), that solicitor (Mr W) was not called by the wife. He was a witness in the husband’s case. Mr W was not required by the wife for cross-examination upon an affidavit sworn by him on 31 August 2011.
In that affidavit, Mr W deposes to he and his wife being social acquaintances of the husband and wife and to a recall of the husband contacting him with a request that he (Mr W) act for the wife. Mr W informed him that he would act neither for the wife nor for the husband. Mr W deposes that he told the husband that he would refer the wife to a solicitor practicing in family law with whom he shared premises, Ms K. Specifically in respect of the allegation pleaded at [E], Mr W deposes:
12.…If the reference to ‘the Solicitor engaged by [the husband] to provide independent advice’ refers to me, then [the husband] did not give instructions to me to provide independent advice to [the wife] that if she did not sign the Agreement drawn on [the husband’s] instructions that the wedding would not take place.
Mr W also deposes to introducing the wife to Ms K “… for the purposes of [Ms K] providing advice with respect to the Prenuptial Agreement prepared by [the husband’s solicitor] which by that time had been forwarded to me and which I had passed on to [Ms] [K]”.
I accept the unchallenged evidence of Mr W and I also accept the husband’s evidence surrounding these events. I find that the factual assertion made on behalf of the wife in the pleading is false.

Evidence of the Wife’s Solicitor, Ms K

The husband asserts in his Defence that he had “no personal knowledge” of the wife’s consultation with Ms K or what might have been discussed there. Ms K did not swear an affidavit but the wife waived privilege so as to permit oral evidence to be given by the solicitor. It is in my view significant that the wife did not call Ms K as a witness in her case. It is equally significant that, although having no knowledge of what her evidence would be, the husband did so.
An assessment of Ms K’s credibility, and the reliability of her evidence is crucial to central factual issues in this case, primarily whether the agreement contained its schedules at the time any advice was given and whether any advice was in fact given to the wife and, if so, its contents.
The solicitor’s evidence was unsatisfactory in many respects. Not least of the concerns about her evidence was her admission that her file contained no diary notes, statements, correspondence or anything else in writing to which reference could be made in respect of the advice given to the wife. With respect, this seems to me extraordinary – not least because of the necessity dictated by s 90G for the solicitor to provide a signed statement as to the giving of the required advice and the litigation which has surrounded Part VIIIA of the Act (and s 90G in particular) and the potential for consequences for the solicitor personally.
The solicitor said in the witness box that she intended to write a letter of advice to the wife after the agreement had been signed by the husband (and, thus, both parties) and the agreement had been returned to her. It is by no means clear to me why a solicitor would do that; I would have thought there would be some anxiety to record the advice given as soon as possible and, preferably, before the client signed the agreement. The solicitor did not do so, she said, because she was waiting for a signed copy of the agreement to come back to her from the husband’s solicitor and, when it did not come “ I think time just got away from me”.
In respect of the absence of a relevant diary note, or other written memorandum recording any advice, or what did or did not transpire during the consultation between the wife and Ms K, Mr Page SC, who appears for the wife, referred to the judgment of Denning LJ in Griffith v Evans [1953] 1 WLR 1424 at 1428 and to Dew v Richardson [1999] QSC 192.
In the latter case, Chesterman J held, in a passage which, in my respectful view, has resonance for the present case:
[10][After referring to Denning LJ in Griffith] …The judgment was a dissenting one. The other Lord Justices merely noted that the solicitor’s evidence had been accepted by the trial judge and, conventionally, decided the case in accordance with the finding on credit. I cannot accept it is a principle of law that wherever a solicitor and his client disagree about the terms of a retainer (or advice) and the solicitor has not made a written note of the communication the client’s evidence must be accepted. Findings of fact, especially those based upon an opinion of the creditworthiness of witnesses, are to be made from a careful and objective examination of the evidence adduced with respect to those facts. To introduce the notion that in a given circumstance facts must be found a certain way is to replace justice in the individual case determined by the application of legal principle to idiosyncratic facts with the arbitrariness of a determination made by reference to mindless ritual.

I approach the critical question on the basis that both client and solicitor, plaintiff and defendant, have an equal right to be believed. Which of their respective versions is to be accepted will depend upon the persuasiveness of their evidence as judged by surrounding, objective circumstances. [emphasis in original]

(See, too, remarks to similar effect by Katzmann J in Arnautovic & Sutherland t/a Jirsch Sutherland & Co Arnautovic & Ors v Cvitanovic (as Trustee of the Bankrupt Estate of Rosee) [2011] FCA 809 at [68].)

I do not regard Ms K’s evidence as untruthful. I consider she was doing her best to give evidence which was as accurate as possible. But, her evidence reveals a recall that is significantly impaired in respect of important aspects of the matter.
I am, of course, conscious that some years have elapsed since the consultation, lasting some 50 minutes which was, it seems, the only consultation between the solicitor and the wife. Plainly enough, the solicitor has seen many clients since. (Of course, it might be observed that it is just such factors - among other things - that dictate the prudence of comprehensive diary notes or other memoranda or, for example, a contemporaneous letter of advice. It might also be observed that not only might any or all of those documents have assisted recall but, of course, they might, of themselves, have been evidence).
In the absence of such documents, an imperfect recall might be expected; indeed, an asserted perfect recall might be regarded with some scepticism. I was, nevertheless, struck by the extent of the solicitor’s failure to recall. It was significantly impaired in respect of important aspects of the matter, not the least of which was the contents of the advice given to the wife. This evidence will be referred to in more detail below.
The absence of notes or other documents, the gaps in the solicitor’s recall, the total failure to recall anything of important matters (for example, what advice was given about the disadvantages of the agreement) and the patchiness of recall of other aspects of the consultation with the wife (for example, exactly what advice was given as to the wife’s rights) cause me to have significant concerns about the reliability of the solicitor’s evidence.

Section 90G in Context

No case was pleaded (or argued) that there was, by reference to s 4 and s 90B of the Act, no “financial agreement” between the parties (for example because what the husband asserts to be the agreement complete with schedules was, on the wife’s case, never capable of, nor was in fact, accepted by her. (cf Fevia & Carmel-Fevia (2009) FLC 93-411; Sullivan & Sullivan [2011] FamCA 752, per Young J).
In Senior (above) it is said in Strickland J’s judgment with which I respectfully agreed:
96.If an agreement, including an agreement that satisfies the definition of “financial agreement” under the Act, fails to effectively bar Part VIII claims (because of its failure to comply with the requirements of s 90G and, as a result, is not “binding” within the meaning of that section) the financial agreement can nevertheless have an affect. However, an agreement’s failure to be “binding” in the s 90G sense renders its use in Part VIII proceedings to be very limited; specifically it does not operate as a bar to orders made under that Part (see e.g. Woodland and Todd (2005) FLC 93-217 at paragraphs 37 – 39).
It is the issue of whether the agreement in this case is “binding” as there referred to that is the central issue in the instant case as pleaded and argued.
In that respect, the central factual assertion of the wife relevant to s 90G is that she was not provided with any advice, or, at least, advice in the form or of the type which s 90G requires.
In Senior, reference was made in Strickland J’s judgment to what was said about compliance with s 90G in the earlier decisions of Black & Black (2008) FLC 93-357; Australian Securities and Investments Corporation & Rich & Another (2003) FLC 93-171 in particular at [64], per O’Ryan J; and J & J [2006] FamCA 442 at [19] and [20], per Collier J. In Senior it is said:
119.With respect, I am by no means convinced that the distinction between the approaches of O’Ryan J and Collier J sought to be drawn by the Full Court in Black and Black is as sharp as there appears to be asserted. In my view, what each of Collier J, O’Ryan J and, indeed, the Full Court in Black and Black were anxious to point out is that it is only an agreement that can be plainly seen to comply with the mandatory statutory requirements applicable to a financial agreement that can exclude (in whole or in part) the operation of Part VIII of the Act.
…
121.I am of the view that the use of adjectives such as “strict” or “full” or “complete” as qualifiers to the word “compliance” merely seek to reinforce the fact that it is only a “financial agreement” as defined in the Act which is “binding” within the meaning of the Act, which can oust Part VIII. A financial agreement can only be binding if, and only if, each and all of the requirements of the Act to achieve that status are met. Compliance with each of the requirements must be met in order to achieve the agreement’s central purpose of operating in substitution for Part VIII because it is “if and only if” that that is done that the agreement is “binding”.
122.To attribute to the legislative requirements a “strict compliance test” or to qualify the necessary mandatory compliance, is to add a gloss to the requirements that is not required or justified by the legislation.
Further:
141.The relevant requirement of s 90G here is the provision of advice to a “spouse party” and certification to that effect. Compliance with that provision, and all other provisions of s 90G is mandatory. That compliance is the foundation for the ouster of the powers of the court to make Part VIII orders. I agree with what was said in Black and Black that the use of the words “if and only if” in s 90G and the fact that the powers of the court are being removed, requires the court to scrutinise carefully whether s 90G has been complied with.

Is the Agreement Binding – s 90G?

The case for the wife in respect of s 90G is pleaded as follows:
…
14.Neither on the 8 December 2004 or at any other time was the [wife] informed by [Ms K] as to:
(a) The effect of the Agreement on the rights of the [wife]; or
(b)The advantages or disadvantages to the [wife] of making the Agreement.
…
18.On 10 December 2004, [Ms K] executed a Certificate required by s 90G(1)(c) which Certificate was annexed to Agreement in accordance with the provisions of s 90G(1)(b) of the Family Law Act.
…
21.Not until 15 May 2008, was a copy of the Agreement executed by the [wife] and [husband] provided to the [wife’s] then solicitor, [Ms R].
22.By reason of the aforesaid, the Agreement dated 17 December 2004 is not binding on the parties to the Agreement.
Particulars
(a)The [wife] was not provided with legal advice from a legal practitioner about the effect of the Agreement on the rights of the [wife] and about the advantages and disadvantages at the time that the advice was provided to the [wife] of making the Agreement;
(b) A copy of the Agreement was at no time given to the [wife].

As has already been mentioned, the wife conceded in the witness box that para 22(b) is wrong; she did in fact receive a copy of the agreement. The apparent inconsistency evident in any event between that assertion and the assertion pleaded at para 21 has also earlier been referred to.

The Nature of the Required Advice – s 90G(1)(b)

In Senior, Strickland J held:
146.The requirement of s 90G(1)(b), which refers to advice as to “the advantages and disadvantages” of the agreement for each party is not directed towards whether any such advice as was provided was correct or not. Here, a specific assertion is made by a solicitor that he could not see any advantages for this client in her entering the agreement and thus he did not discuss this with her. In those circumstances, whatever be the merits or otherwise of that advice, it is in my view illogical to read s 90G(1)(b) such that it requires a legal practitioner to advise of “advantages” in circumstances where the application of appropriate professional skill and care in and about the provision of that advice sees none.
147.In order to avoid illogicality in its interpretation, the reference to providing legal advice “about the advantages and disadvantages” of the agreement should be read as meaning “providing such advantages, if any, and such disadvantages, if any, as are apparent to the legal practitioner providing the advice”.
Mr Page SC, counsel for the wife, sought to assert (primarily in the context of the wife’s assertion that she did not receive a copy of the Schedules to the agreement setting out the husband’s asserted assets and liabilities) that a legal practitioner providing s 90G advice would need to have, and if not, to seek, details of the assets and liabilities of the parties.
This is so, it is argued, because that is the first step in the so-called “four-step approach” to an application under s 79 and it is needed before the practitioner could go on to give advice as to contributions and the like. The submission is that if no such list of assets and liabilities was before a solicitor, advice could not be given which complies with s 90G because a solicitor would, as a result of not having that list, be rendered unable to give the requisite advice, particularly as to the agreement’s advantages and disadvantages.
I am not persuaded that the proven absence of a list of assets and liabilities at the time of giving advice would necessarily mean that the advice required by s 90G was not given or could not be given.
First, s 90G’s requirements must be seen against a crucial consideration. The legislature has decided that the essence of the regime created by Part VIIIA of the Act is that parties who are independently advised and receive appropriate advice should, in the absence of fraud, unconscionability or other vitiating factors, be perfectly free to bind themselves to an entirely unjust and inequitable agreement (in s 79 terms) that governs their future rights and operates as a bar to future property (and/or maintenance) proceedings. In short, if the relevant pre-requisites are met, and there is an absence of vitiating factors, the parties are perfectly free to make a “bad bargain”.
The advice required by the section as to “the effect of the agreement on the rights of [the] party” can be seen to be tolerably clear and, importantly, independent of the terms of any particular agreement and the particular circumstances of the parties to it. Plainly enough, as it seems to me, the advice must include substantive advice about the effect of s 71A. It must also include advice about the effects of the terms of the particular agreement.
But, at least in the case of a pre-nuptial (i.e. s 90B) agreement, it is by no means clear what is contemplated by the requirement in s 90G that advice must be given as to “the advantages or disadvantages of the agreement at the time that the agreement was made”. That advice must, as it seems to me, depend, at least in part, upon the myriad of circumstances which may (or may not) arise in the course of the parties’ married lives (including, indeed, whether they separate at all, in which case the terms of the agreement providing for respective entitlements will not become operative). How is the justice and equity (in s 79 terms) of the agreement to be determined at the time it is signed if it does not become operative until separation occurs? If advice as to “the advantages and disadvantages” is not to be given by reference to prospective s 79 entitlements, what criteria or reference point or points are the measure of “advantage” or “disadvantage”? The terms of an agreement might be seen to be wholly just (or “advantageous”) if separation was to occur a week later and wholly unjust (or disadvantageous) if separation was to occur 25 years later. The terms of an agreement may be seen to be wholly just (or advantageous) if the parties have modest assets at the time it is made but be seen to be wholly unjust (or disadvantageous) should, 20 years later, one of the parties acquire very significant wealth. Permutations are innumerable.
A practitioner providing the required s 90G advice might, of course, feel more comfortable, or consider it prudent, to have a list of assets and liabilities so as to give the client examples of the permutations that might be possible and what may, or may not, be seen as “advantages” or “disadvantages” as a result. In addition, it might well be that advice which can be seen to be comprehensive in terms of a solicitor’s duties, or that which is desirable in light of s 90G’s ramifications, might have many components to which a list of assets and liabilities might pertain. The issue is not what prudence or practice might dictate, but what s 90G requires of any advice.
Indeed, similar considerations might be seen to apply to what might, at first blush, be seen to be an advantage attaching to a s 90B agreement, namely that it provides certainty of result. The solicitor here advised the wife that this was an advantage. (Indeed, it was the only advantage the solicitor could recall in evidence providing advice about.)
Certainty may, perhaps, be seen as advantageous when measured against the broad range of the s 79 discretion which, it can be accepted, does not admit of certainty of result. But, certainty of result may not be an advantage if the solicitor is properly confident that the agreement’s certain result is significantly less than the worst uncertain result emanating from the future s 79 determination (see, for example, Senior above). Again, the issue of when separation occurs is likely to affect the issue of certainty being an “advantage” or “disadvantage”.
In summary, then, whilst I do not cavil with a submission that suggests that a list of assets and liabilities might be required by a solicitor in the usual course of events, or might be dictated by prudence in the giving of advice in and about a prospective agreement, I am not persuaded that the proven absence of a solicitor being possessed of a reliable list of assets and liabilities as at the date of the making of a s 90B agreement is in and of itself indicative of the required advice not having been given.

Was Any Advice Independent?

It is clear from the plain words of s 90G(1)(b) that the advice required to be rendered to a party must be “independent”. It is not specifically pleaded by the wife as a particular of non-compliance with s 90G(1)(b) that the wife was not provided with advice that was “independent”. Yet, it will be recalled that what is said to be a particular of unconscionable conduct at [E] of the wife’s pleading earlier referred to can also clearly be seen as a direct allegation that the advice received by the wife was not independent.
I accept the unchallenged evidence of Mr W. I accept the evidence of Ms K and that of the husband in respect of this issue. Taken together that evidence leads to a clear finding that the husband did not engage Ms K on the wife’s behalf. Nor, indeed, did the husband have any contact whatsoever with Ms K. I specifically accept his evidence and that of Ms K that he did not.
I do not accept, then, the wife’s assertion that the husband provided “instructions” to Ms K about any advice which was or was not to be given by her to the wife. Precisely the same considerations apply to the extent that those same assertions are made in respect of any advice provided to the wife by Mr W. I specifically accept his evidence that he provided no such advice.
Accordingly, it is clear I accept that such advice as was given was “independent” within the meaning of the section.

What is the Evidence as to the Advice given in this Case?

Whatever might be in the contemplation of s90G as being advice that meets the required criteria, what is plain is that, if the agreement is to be binding, the section requires reliable evidence as to that which is said to have been the advice given which meets the criteria (even if, as in Senior, this advice was that there were “no advantages to the agreement”).
As has earlier been seen, at [14] of the wife’s Statement of Particulars of Claim she asserts that no advice was given either as to the “effect of the agreement on the rights of [the wife]” or “the advantages and disadvantages to [the wife] of making the agreement”.
The wife’s unchallenged evidence is that she read the agreement (although she alleges it did not contain the schedules) and that, after reading it, Ms K read it verbatim to her. The wife swears that she was “not able to fully comprehend what was being read to me”.
In her affidavit of evidence in chief, the wife specifically deposes (at [201]) that Ms K “did not discuss with me any advantage or disadvantage of the agreement”. The wife goes on to depose:
202.[Ms [K]] did not, to the best of my recollection, give any explanation to me about the law relating to the agreement. To the best of my recollection, [Ms [K]] did not ask me any questions about the history of our marriage.
…
207.[Ms [K]] did not speak to me about my rights under the agreement, nor the advantages or disadvantages arising from the agreement.
Ms K said it was “not correct” for the wife to make that assertion. But, her evidence to that effect is not supported by any positive evidence by her as to what advice was actually given. As I have earlier made clear, I find her evidence to be generally unreliable.
In asserting that it was “not right” for the wife to make that assertion, Ms K (after invitation by counsel for the husband) relied upon the certificate annexed to the agreement in which she certifies to the giving of advice in each such respect. In a similar vein, Ms K was asked whether she “explained the terms of the agreement to the applicant wife” to which she responded “yes”. But, of course, without more, that is not particularly helpful in addressing the central questions – it swears to a conclusion rather than the facts upon which the Court might base its own conclusions.
The same applies to other answers proffered by Ms K to questions in cross-examination. For example, paragraphs [201] and following of the wife’s affidavit were put to Ms K:
‘201.[Ms K] did not discuss with me any advantage or disadvantage of the agreement’. Do you accept that or do you dispute with it? --- I dispute that ...
‘202.[Ms K] did not, to the best of my recollection, give any explanation to me about the law relating to the agreement’. I will stop there, do you agree with that or not --- I don’t – I don’t know what she means about “the law relating to the agreement”, but I – I did explain the meaning of it.
I asked Ms K: “what advice did you provide to [the wife] as to the advantages and disadvantages of her entering the agreement, if any” Ms K responded “well I didn’t go through the assets or possibilities.”[2] Later, in answer to the same question, Ms K said “I can’t remember what I said, but I would have …”. I permitted the solicitor to finish the answer over Mr Page’s objection but, as that “objection” sought to point out, the witness was speculating and I attach no weight to her answer to that question which was that “an advantage would be that she would have certainty in the event that the marriage broke down”.
[2]The transcript reveals that this is the word used by Ms K (as distinct from, for example, “liabilities”).
I then said:
Now, I want you to do the best you can, please, to recall what it is that you said to [the wife] about the advantages or disadvantages at the time that your advice was provided of her making the agreement. It is important, to me at least, that you distinguish between what you recall or what you said as distinct from your speculating about what you might have said. Now, let’s go from scratch. What can you recall of what you said to [the wife] at the time that you provided the advice about the advantages and disadvantages of making the agreement --- that the agreement provides some certainty --- In the event that the marriage broke down.
Yes. What else? Not what you did or what you think you might have, or you would have to this client or any other client, but what you recall of what you said? --- I really can’t recall exactly what I said, your Honour.
Counsel for the husband, Mr Galloway, asked Ms K (without objection from Mr Page) to look at the certificate signed by her and thereafter asked her “does that certificate tell the absolute truth?”, to which Ms K responded “yes”. Later, Mr Galloway referred to paragraph 18 of the wife’s pleading (“[o]n 10 December 2004, [Ms K] executed a Certificate required by section 90G(1)(c) which Certificate was annexed to the Agreement in accordance with the provisions of section 90G(1)(b) of the Family Law Act”) and asked “…do you accept that’s correct” to which Ms K also responded “yes”.
In a similar vein Mr Galloway took Ms K through each of the specific paragraphs of the wife’s affidavit where specific assertions were made by the wife as to what Ms K did not do in relation to the agreement.
Again, I consider that the answers to those questions are not particularly helpful. Again, many, if not all, effectively swear to the conclusion which the Court must reach as distinct from Ms K providing evidence (for example as to what was or was not said by her) so as to provide a foundation for the Court reaching its own conclusions as to whether the requirements of the section were met.
Mr Galloway’s specific question about the certificate signed by Ms K, and later submissions by Mr Galloway, sought to rely on the certificate as evidence of itself that the requirements of the section were met. That submission might be seen to bear a direct or analogous relationship to the presumption of regularity (although it was not mentioned specifically or alluded to). In Dixon v LeKich [2010] QCA 213, for example, Fraser JA held (at [20]) that “[t]he presumption of regularity has been described as ‘a rule of very general application, that where an act is done which can be done legally only after the performance of some prior act, proof of the latter carries with it a presumption of the due performance of the prior act’”.
I am not satisfied that the presumption, had it been agitated in terms, has application to the requirements of s 90G. First, the facts alleged to be presumed by virtue of the certificate, namely the provision of advice in accordance with s 90G, go to more than the mere validity of an “administrative act” (see e.g. Environment Protection Authority v Unomedical Pty Ltd (No 3) [2010] NSWLEC 198 at [302]). Secondly, the presumption is no more than a rebuttable presumption of fact (see e.g. Northside Developments Pty Ltd v Registrar-General (1990) 170 CLR 146 at [177]).
I consider that the certificate is, without more, insufficient to satisfy the onus of establishing that the relevant s 90G requirements have been met.
It will be clear that I have reservations generally about the veracity and reliability of the wife’s evidence as I do about the reliability of the solicitor’s evidence.
I can be confident, and specifically find, that there was a consultation with Ms K lasting 50 minutes. I can be confident, and specifically find, that, during that consultation, the agreement (including, as I find, its schedules) was read verbatim to a person whose first language is not English.
Despite my general reservations about the wife’s evidence, I accept her evidence that she received little, if anything, in the way of advice about her rights under the agreement and about its advantages or disadvantages. I consider that evidence is consistent with the evidence of the length of consultation with the solicitor and what occurred there, consistent with the findings just made about which I am confident. I also consider the wife’s evidence in that respect is consistent with the actions of the solicitor in not forthwith providing written confirmation of such advice as was given and the failure to take any diary note of any such advice.
As is plain, I consider the evidence of Ms K to be, generally, unreliable. She was singularly unable to give evidence about what was, or was not, said by her to the wife so as to enable this Court to arrive at its own conclusions with respect to whether such advice as was given might meet the requirements of the section. Save as I have otherwise earlier specifically found, the general tenor of her evidence is, in my view, that she had very little, if any, recall of what was or was not said either by the wife or herself. I consider her failure to recall any advice about any advantages or disadvantages (save the assertion that advice was given about the advantage of certainty which such answer, I consider, was prompted) to of itself lend weight to the wife’s evidence that little or no such advice was provided.
I do not consider that the certificate is of itself sufficient to remedy what I otherwise regard as a significant deficiency in the evidence as to what advice, if any, was given, and, if given, whether its contents would satisfy s 90G(1)(b).
The evidence as a whole, including the certificate, provides an insufficient evidentiary foundation for a finding that advice was given about the advantages and disadvantages of the agreement for the wife at the time that the agreement was made.
As pointed out, the retrospective operation of amendments to s 90G make it necessary to consider in this case the equally applicable form of the section (set out at [22] of these Reasons. The relevant alternative requirement is that advice be given as to “the effect of the agreement on the rights of that party; and whether or not, at the time when the advice was provided, it was to the advantage, financially or otherwise, of that party to make the agreement; and whether or not, at that time, it was prudent for that party to make the agreement; and whether or not, at that time and in the light of such circumstances as were, at that time, reasonably foreseeable, the provisions of the agreement were fair and reasonable”.
It will be clear from the preceding discussion that the statements and findings there made in respect of the relevant evidence are equally applicable to those alternative requirements.

Summary of Findings as the Section 90G Requirements

A distinction needs to be drawn between matters which might have an impact upon an agreement as a financial agreement and, on the other hand, matters which might impact upon whether that financial agreement is binding. (See Senior; and Sullivan & Sullivan above.)
No case is pleaded that the agreement is not a “financial agreement” within the meaning of the Act as explained in those decisions. No submissions were directed to that issue. To the extent that it might have been contended that there was no agreement because the schedule of assets and liabilities was not attached to the agreement and that, as a result, it might, for example, be argued that the agreement is rendered uncertain, I specifically find that the schedule of assets and liabilities was so annexed.

In addition, I find that the wife received a copy of the certificate signed by the husband’s solicitor as s 90G(1)(ca) requires. That certificate (appended to an agreement signed by the husband) was received on 15 May 2008. That is, it was received more than three years after the wife had signed the agreement. But, s 90G(1)(ca) has, in terms, no temporal element. It has not been argued in this case that any temporal element should be implied.
I find – and it is not contended otherwise – that the wife was provided with the signed statement (in this case appended to the agreement) by the solicitor from whom she sought advice in respect of the agreement to the effect that advice as required by the section had been given (s 90G(1)(c)).
Such advice as was given by the solicitor was independent and from a legal practitioner within the meaning of the section (s 90G(1)(b)).
I am not satisfied that either advice as to rights under the agreement, or advice as to the advantages and disadvantages of the agreement was given (or that, pursuant to the alternatively applicable sub-section, that advice was given as to whether it was prudent for the wife to enter the agreement or whether its terms were fair and reasonable).
In that respect, the certificate signed by the solicitor does not, of itself, provide a sufficient evidentiary foundation so as to reach any of the conclusions just referred to. The evidence as a whole, including the certificate, does not provide a sufficient evidentiary foundation for the requisite findings just referred to.
I find, therefore, that the agreement is not binding within the meaning of s 90G of the Act.

The Necessity to Consider the s 90K Case

That ultimate finding just referred to might be thought to render it unnecessary to decide whether the provisions of s 90K apply in the manner pleaded. But, consideration of those issues becomes relevant because of the provisions of s 90G(1A). As has been seen, if the Court is satisfied that it would be unjust and inequitable if the agreement were not binding on the parties, the deficiency in meeting the requirements of s 90G might potentially be “cured”.
In discussions with counsel for each of the parties, it was agreed that, in the event that the findings were such that s 90G(1A) applied, an opportunity would be afforded to each of the parties to make detailed submissions with respect to the meaning of that subsection and, in particular, what is meant by the expression “would be unjust and inequitable if the agreement were not binding” as provided for in subparagraph (c) of subsection (1A).
The ultimate finding just made potentially brings into operation that subsection.
However, neither s 90G(1A) nor any other “curative” provision applies if the Court sets aside a financial agreement pursuant to s 90K of the Act. It is, therefore, necessary to turn to consider those matters pleaded as vitiating the agreement as that section contemplates.

Should The Agreement Be Set Aside For Fraud? – s 90K(1)(a)

It is to be observed s 90K(1)(a) provides for the setting aside of a financial agreement “if and only if” the Court is satisfied that “the agreement was obtained by fraud (including non-disclosure of a material matter)”.

The Case as Pleaded

Fraud must be pleaded distinctly and with particularity and clearly proved. (Krakowski and Another v Eurolynx Properties Limited and Another (1995) 183 CLR 563 at 573; Magill v Magill (2006) 226 CLR 551 at 567, per Gleeson CJ). It is a very serious allegation and “inexact proofs” will not suffice (s 140(2), Evidence Act; Briginshaw v Briginshaw (1938) 60 CLR 336).
Here the pleading that the agreement “was obtained by fraud” is accompanied by “Particulars of fraud” as follows:
Particulars of fraud
(i)The Agreement was obtained by fraud in that it failed to disclose material matters relating to the financial circumstances of the parties and, more particularly –
A.The schedule to the Agreement purporting to disclose the property of the parties did not form part of the Agreement at the time that the [wife] executed the Agreement;
B.The schedule to the Agreement did not contain the note referred to within it;
C.The schedule to the Agreement did not contain a full disclosure of the property of the parties or either of them.

A number of observations can immediately be made about the “pleading”. There is no allegation that the husband did, or did not do, anything. There is no pleading of facts that might sustain the contention that there was not “full disclosure” nor, even, any facts that might be the premises for ascertaining what might be meant by that expression. Nor is there any apparent recognition that this is a statutory cause of action; for example, no facts are pleaded by which it might be concluded that any alleged failure to disclose was “material” – an essential component of the statutory basis of the claim.
Pleadings were ordered precisely so that facts upon which any claim was based might be properly articulated and particularised and the case’s parameters marked accordingly. The case generally, and cross-examination in particular, was conducted (understandably enough, it might be thought) on the basis that the allegation of fraud was (somehow) constituted, at least in part, by reason of the schedules referred to in the agreement being missing. So much, it might be thought, is clear from pars A and B of the pleading quoted above.
Remarkably, despite what is “pleaded”, the submissions by Mr Page SC at the conclusion of the hearing particularised fraud by non-disclosure in a manner entirely different to that contained in the “pleading”. The material non-disclosure, he said, consisted of the husband’s failure to disclose the implication of consent orders between the husband and his first wife; that is, the interest of the husband’s children with his first wife in T Pty Ltd which is the corporate trustee of the Hoult Family Trust. It was submitted that the husband did not disclose matters relevant to the structure of the trust which could have affected its value.
In a court whose Rules require a case to be pleaded, the failure to earlier particularise the basis of alleged fraud might, of itself, be sufficient to dispose of the allegation of fraud. (See, e.g., Krakowski, above). Yet, despite the direction made by me as to pleadings and the remarkable submissions ultimately made about the issue in light of what was “pleaded”, this Court is not a “court of pleadings” and its Rules do not make provision accordingly. I am reluctant to simply dismiss the claim on the basis that it seeks to depart from that which is pleaded. I feel constrained, despite the matters just referred to, to both consider the issue as “pleaded” and to also examine whether the evidence as a whole sustains the case which the wife, apparently, ultimately seeks to make.

The Absence of the Schedules?

Somewhat remarkable evidence emerged on the morning of the second day of the hearing. The wife alleged that she had only the previous night (that is, the evening of the first day of trial), found a document. She said it was a copy of the financial agreement provided to her by Ms K following their consultation in 2004. The document as presented is a copy of the financial agreement in dispute but with the schedules missing. It became Exhibit W2. The wife claimed that she found the document the night before, mixed in with (at one point, the wife described the document as being “hidden” in) her bank statements. She said she found it while she “was organising [her] stuff”.
The wife could provide no explanation for why she had not looked through those same documents in preparation for earlier proceedings regarding spousal maintenance. She could offer no explanation for why she had not looked through those documents prior to this trial commencing or, indeed, during the course of the preparation for it.
I have already found that the evidence of the solicitor is generally unreliable. Specific findings have also been made contrary to the evidence given by the wife and, in some respects, her evidence is also unreliable. In particular, I have found that the wife’s evidence is, in many respects, subject to exaggeration and infected by what she would prefer to be the truth rather than marked by what is the truth.
In respect of this issue, I specifically accept the evidence of Ms K that she received the agreement and the schedules separately; that she herself stapled them together and that the schedules formed part of the agreement which she read to the wife. In contrast to the evidence given by Ms K in respect of what advice was or was not given (either as to rights or advantages and disadvantages), the evidence on this issue was given confidently and was attended by a recall of the sort of detail I would expect of a person in her position. For example, she asserted, and I accept, that she had a clear recall of receiving the agreement and the schedules separately, and of subsequently stapling them together herself prior to reading the agreement to the wife.
I do not accept the wife’s evidence that the schedules did not form part of the agreement at the time she executed it.
I am, then, not satisfied that there is evidence to support the allegations of fraud contained in paragraphs A and B of the “particulars”.

Inadvertent Non-Disclosure and Materiality?

The husband admits that the schedules which, as I find, were provided to the wife’s solicitor, did not contain mention of a boat. He says that the schedules of assets and liabilities were compiled by his accountants (so much is clear from the evidence) and that the focus was on the entities and assets totalling about $30 million and that the omission of the boat was inadvertent.
Mr Page SC cites authority which might be seen to suggest that inadvertent non-disclosure, if material, is sufficient to attract s 90K(1)(a). In Blackmore & Webber [2009] FMCAfam 154, Bender FM concluded that “I am satisfied that where there is a lack of disclosure of a material matter, whether by way of a deliberate intent to mislead or by inadvertent omission, can be a ground for the setting aside of a Financial Agreement” ([42]). That decision referred, in turn, to a decision of Altobelli FM in Stoddard & Stoddard [2007] FMCAfam 735. In the latter case Altobelli FM held that “[i]t is possible though that in the context of s 90K(1)(a), fraud has a broader meaning in that it may be constituted by non-disclosure of a material matter. Thus, whereas fraud at common law may require a representation, under s 90K(1)(a) fraud may be constituted by omission – ie non-disclosure of a material matter”.
As has earlier been pointed out, no argument is advanced on behalf of the wife that the agreement here is not an agreement at law. Common law and equitable principles attend allegations of fraud in the formation of agreements. They might be seen to apply to “financial agreements” (s 90KA). However, s 90K(1)(a) makes it clear that, whatever might be the position at common law (or in equity), material non-disclosure is relevant to the application of that section.
But, as it seems to me, the section does not make material non-disclosure fraudulent per se. Fraud for the purposes of s 90K(1)(a) can, plainly, include material non-disclosure, but not every material non-disclosure is fraudulent. The inclusion of the phrase in parenthesis in s 90K(1)(a) is explained in my view by the desirability of making clear what might otherwise not clearly emerge from the position at common law or in equity. As a general proposition, at common law a finding of fraud in and about an agreement requires (among other things) a misrepresentation. A misrepresentation is, generally speaking, not constituted by silence or non-disclosure (material or otherwise). (See e.g. Magill, above; United Dominions Corp Ltd v Brian Pty Ltd (1985) 157 CLR 1 at 5-6, per Gibbs CJ).
An exception exists to that general principle with respect to some classes of agreement where there can be said to be a duty to disclose. Contracts of insurance are the most familiar example. It might be argued analogously that agreements that satisfy a definition within the Act ought to embrace a fundamental principle enshrined in this Court’s Rules made pursuant to the same Act, namely the duty of full and frank disclosure. But, rather than leave that issue for argument, the Act has made the position clear by the specifying that fraud for the purposes of s 90K(1)(a) can be constituted by material non-disclosure.
Within that context, to the extent that the statement of Bender FM suggests that “inadvertent disclosure” is to be distinguished from the subjective elements of fraud in law or in equity, I respectfully disagree. “[W]hen fraud is alleged, the inquiry must always be as to the subjective state of the representor’s mind …” (Butterworth LexisNexis, Halsbury’s Laws of Australia at [110-5145] citing Krakowski at 577). In Krakowski, above, Brennan, Dean, Gaudron and McHugh JJ held (at 579-580) that a “representation may be made fraudulently without prior planning. Equally, a representation may be made fraudulently without evil motive”. That is because “if fraud is proved the motive of the person guilty of it is immaterial” (Krakowski, citing e.g. Derry v Peek (1899) 14 App Cas 337; Smith v Chadwick (1884) 9 App Cas 187 at 201; R v McNeill (1922) 31 CLR 76 at 104). Negligence or inadvertence, and even gross negligence, has been distinguished from fraud (e.g. Smith v Chadwick, above; Australasian Brokerage Limited v Australian & New Zealand Banking Corporation Ltd (1934) 52 CLR 430 at 438).
To the extent that Mr Page’s submissions, and his specific reliance upon the decision in Blackmore & Webber, constitute an argument that “innocent” or “negligent” material non-disclosure is, of itself, sufficient to invoke s 90K(1)(a), I reject the argument as incorrect. Of course, the extent of the alleged innocence or negligence (and the extent of the non-disclosure) might well form a basis for ultimate findings that the non-disclosure was anything but innocent or negligent and, ultimately, contribute to a finding of fraud.
Not only has the case as pleaded at pars A and B not been pursued, but nor are there submissions directed to the husband’s admission that a boat was not included in the list of assets and liabilities prepared by his accountants that became schedules to the agreements. To the extent that, in those circumstances, it is necessary to make a finding in respect of this omission; there is no evidence (save, perhaps, for the omission itself) that could sustain a finding of fraud. The husband asserts inadvertence; I accept his evidence. It seems to me odd that a boat which, although valuable, would be intentionally omitted with an intention to deceive in circumstances where there is disclosure of assets exceeding $30million.

The Allegation of Non-Disclosure as Ultimately Argued

The wife deposes in her own material that:
171.I asked what the agreement was about. [The husband] told me that the assets owned by [T] Pty Ltd were assets of his family that he had before I came into his life.
172.[The husband] told me that I would have to sign an agreement that protected those assets before he was prepared to marry me.
173.I acknowledged that the assets of [T] Pty Ltd were assets of his. I said to [the husband] however that I needed to speak to a lawyer who could advise me about the agreement so I understood what it meant.
The wife also stated, in her affidavit filed 5 September 2011:
8.I deny the various assertions by [the husband] contained within the affidavit of [the husband] filed 2 September 2011, that he fully informed me of the interests of the children of his first relationship in his business holdings and investments. I admit [the husband] informed me of his intention to appoint the children of his first marriage as directors of [T] Pty Ltd, as they became old enough.
9.In particular in reply to paragraphs 13 and 14 of the affidavit of [the husband] filed 2 September 2011 I say that the first occasion I saw the order of this Honourable Court made 5 March 2003 was on reading the affidavit of [the husband] filed 2 September 2011.
In the light of that sworn evidence of the wife, it is by no means clear to me, whether by reference to the pleading, the evidence, or the submissions: (a) what, precisely, is said not to have been disclosed; and (b) by reference to what evidence is any such non-disclosure said to be “material”.
Further, and crucially, I have been taken to no evidence which points to, or from which it can be inferred, that any such failure to disclose as does exist in that respect was done so with any intention to deceive. As I have said, in my view, s 90G(1)(a) requires that to be proved before a finding of fraud pursuant to that section is made. Even if material non-disclosure is proved (which, in my view, it is not) that is of itself, insufficient.

Finding as to Fraud

In my judgment, the wife does not establish fraud within the meaning of s 90G(1)(a).

Unconscionable Conduct? – s 90G(1)(e)

The wife’s “Statement of Applicant’s Claim” asserts that:
7.Relying upon the representations that the marriage would take place on … December 2004, the [wife] made arrangements to leave Australia for [an overseas destination] on 9 December 2004.
8.In or about the month of December 2004 the [husband] instructed a solicitor, Peter J Sheehy, to draw an agreement intended to be a financial agreement pursuant to the provisions of section 90B of the Family Law Act.
9.On or about 7 December 2004, the [husband] informed the [wife] that he required her to execute a financial agreement as a condition precedent to the marriage between the [wife] and [husband] and that if the [wife] did not do so there would be no marriage.
10.On or about 6 December 2004, the [husband] requested a solicitor, [Mr W], to peruse and consider the Agreement drawn on his instructions by Peter J Sheehy and advise the [wife] in relation thereto.
11. On or about 7 December 2004, the [husband] informed the [wife] that she was required to attend upon [Mr W], the solicitor arranged and paid for by him to execute the financial agreement drawn by his solicitors.
12. On or about 8 December 2004, the [wife] attended upon a solicitor, [Ms K], who was referred to the [wife] by [Mr W].
The following then later appears under the heading “Particulars of unconscionable conduct”:
… [Paras A, B and C precede the heading]
D.The [husband] informed the [wife] on a date known to be proximate to the departure of the [wife] from Australia for the wedding that in the event that she did not sign the Agreement the marriage would not take place.
E.The [husband] gave instructions to the solicitor engaged by him to provide independent advice to the [wife] that if she did not sign the agreement drawn on his instruction that the wedding would not take place.
F.The [husband] knew of the date of the [wife’s] departure from Australia at the time he caused solicitors to be instructed to act for the [wife].
G. The [husband] at all times knew that the [wife] was not conversant with the assets owned by the [husband].
H.The [husband] arranged the engagement of a solicitor to provide independent advice to the [wife] at a time when he knew or ought to have known that the [wife] would not have time to herself consider the terms of the agreement, or retain a solicitor of her choice to advise in relation to the agreement.
I.At no time prior to requesting the [wife] to sign the agreement, did the [husband] discuss or attempt to discuss the terms of the proposed agreement with the [wife].
J.The [husband] knew or ought to have known that the terms of the proposed agreement were not just and equitable.

To the extent that a “cause of action” might be discerned from the pleading, the general assertion as to “unconscionable conduct” as “particularised” might possibly be seen as an assertion of a claim in undue influence. In that respect, interesting questions might arise as to whether principles similar to those enunciated by Dixon CJ in Yerkey v Jones (1939) 63 CLR 649 could or should apply to a relationship of the type which preceded the parties’ marriage here. (See, e.g. Garcia v National Australia Bank Ltd (1998) 194 CLR 395, in particular at 404 per Gaudron, McHugh, Gummow and Hayne JJ).
No claim in undue influence has been properly pleaded or otherwise articulated, nor did any submissions made on behalf of the wife seek to address or maintain any such claim. These reasons, then, are confined to a consideration of whether the agreement should be set aside by reason of the husband having “engaged in conduct that was, in all of the circumstances, unconscionable” (s 90K(1)(e)). (I note, in that respect, that, whatever calls might have been made for the principles applicable to undue influence and unconscionable conduct to fall under one unified concept of unconscionable conduct, “in Australia the conceptual division … has … been maintained” and, importantly, each such claim should be separately alleged and particularised. (Turner v Windever [2003] NSWSC 1147 at [128], per Austin J)).
A “financial agreement” is, first, an agreement (s 4 of the Act; Senior, above). An agreement can be set aside in circumstances where there exists the unconscientious taking advantage of one party by another when the latter is at a special disadvantage. (Blomley v Ryan (1956) 99 CLR 362 at 405 per Fullagar J; at 415 per Kitto J.) A “financial agreement” can be set aside similarly (s 90K(1)(b); (1)(e)). (See generally as to s 90K(1)(b) and (e) and the applicability of the principles of equity: Explanatory Memorandum, Family Law Act Amendment Bill (Cth) [160].)
“Unconscionable dealing looks to the conduct of the stronger party in attempting to enforce, or retain the benefit of, a dealing with a person under a special disability in circumstances where it is not consistent with equity or good conscience that he should do so” (Deane J, Commercial Bank of Australia Ltd v Amadio (1983) 151 CLR 447). It has been said that the applicability of the doctrine is comprised of a number of elements:
(a)the weaker party must, at the time of entering into the transaction, suffer from a special disadvantage vis-à-vis the stronger party;
(b)the special disadvantage must seriously affect the weaker party’s capacity to judge or protect his or her own interests;
(c)the stronger party must know of the special disadvantage (or know of facts which would raise the possibility in the mind of any reasonable person);
(d)that party must take advantage of the opportunity presented by the disadvantage; and
(e) the taking of advantage must have been unconscientious.
(Turner v Windever [2003] NSWSC 1147 at [105], relying upon earlier decisions of the High Court in Amadio, above; Louth v Diprose (1992) 175 CLR 621; and Bridgewater v Leahy (1998) 194 CLR 457).
It is contended in written submissions on behalf of the husband (at [11]) that:
The wife cannot be accepted as a witness of truth. In particular her evidence concerning the earlier drafts of the agreement will, with respect, lead this honourable Court to conclude that comfortably prior to the parties [sic] marriage and the execution of the final financial agreement, the husband and wife had discussed in some detail provisions of the agreement and that the wife had some input into the shaping of the terms.
The evidence regarding earlier “drafts” needs to be set out at some length; in my view it is highly relevant to the question of whether or not the husband’s conduct, in seeking to uphold the agreement, is unconscionable.
On the husband’s evidence, the first draft agreement was handwritten by him in October 2004 (i.e. two months before the parties’ marriage). In support of this claim, he exhibits to his affidavit a copy of a handwritten document entitled “Prenuptial Agreement”. That “draft” states, inter alia, that the wife “acknowledges she has no interest” in T Pty Ltd, the Hoult Family Trust, S Pty Ltd and the P Family Trust.
The husband deposes that this document was torn up by him and thrown in the bin once a more legible version was prepared. The copy annexed to the husband’s affidavit appears to have been ripped but stuck together again. The husband states that he found this document (that is the stuck together document) in August 2011 among other documents belonging to the wife. The wife’s oral evidence was that she had seen the document previously and accepts that it had been handwritten by the husband, but she “could not recall” whether she had seen it in “November… or December 2004 or [during the parties’ reconciliation] in 2008”. The wife, despite accepting that she “hoarded things”, says that she did not “remember keeping the pieces of the document”. I do not accept her evidence in this respect.
The husband states that subsequent to his handwritten version of the “Prenuptial Agreement”, he had his secretary type up a further draft. That draft was located by the husband on the morning of the second day of trial. The husband says he found the document whilst looking for his daughter’s lunch-box in the former matrimonial home in Brisbane. The wife admitted in the witness box that she stores some of her documents in the cupboard in which her daughter’s lunch-box is kept. The document, subsequently tendered as Exhibit H5, is, according to the husband, a “typed copy of the draft of the prenuptial agreement subsequent to my first couple of written editions and prior to me giving one to [his solicitor] to put into legal terms. The time I am uncertain about …”. This draft sets out the “benefits” to be received by the wife, including the payment by S Pty Ltd of “all…educational fees” of any “degree/diploma/taft [sic] course chosen” by the wife. It also states that “in accepting” the specified benefits, the wife:
…acknowledges and agrees that she has no rights or interests in
1…[T] Pty Ltd and loan accounts
2…[N] Pty Ltd
3…[B] Pty Ltd
4…[…] & […] [Hoult] A/T/F The [… Hoult] Superannuation Fund
5…[S] Pty Ltd
Or any of there [sic] associated companies and trusts and loan accounts
…
The husband said he had discussed this draft with the wife “along with at least three other drafts”. The wife denies having seen the document before. She denied placing it in the cupboard. I reject each such denial by her. Consistent with my earlier findings, I consider that the wife’s evidence was shaped with a view to the desired outcome in these proceedings.
The husband also annexes to his affidavit filed 2 September 2011 a copy of what he describes as “the first draft” of the financial agreement ultimately signed by both parties. The husband says that both he and the wife together discussed this draft on or about 23 November 2004. The draft contains handwritten notations and corrections and, significantly, contains what the wife accepts is her signature on the first page.
Whilst admitting during oral evidence that the signature was hers, the wife said she did not in fact sign the document and had never seen the document. She went on to say that her signature may have been “copied and scanned” or “forged” but provides no evidence in respect of either such assertion, including how either might have occurred. The corollary of that allegation is, at it seems to me, that the husband, or someone acting for or through him perpetrated this ruse or forgery. That is a very serious allegation. The wife offers no evidence in support of it and was, to say the least, unconvincing in her assertion of it.
The wife both vehemently denies signing the document and also specifically denies crossing out the word “ten” at paragraph 6.8 of the draft and hand-writing “fife” in lieu. When asked about ticks which the husband says he placed on the agreement, the wife said that the husband had marked the document with ticks “in 2008”. When asked by counsel for the husband how she could know this when she had denied ever seeing the document, the wife said “I do not know”.
I reject the evidence of the wife. I specifically reject her evidence that she had “never seen the document” and I specifically reject her evidence that she did not sign the document. I find that she did sign the document. I specifically reject her evidence that her signature on the document was “copied and scanned” or “forged”. I find that the wife did in fact cross out the word “ten” at paragraph 6.8 of the draft and she herself wrote the word “fife” (presumed to mean five) in lieu.
I accept the husband’s evidence that he and the wife went thoroughly through a number of drafts of the agreement, all of which bore a substantial resemblance to the final, purportedly binding, version in the months leading up to the signing of the final agreement. In particular, I accept the husband’s evidence that he went through the penultimate version of the agreement “paragraph by paragraph” with the wife, two weeks before she signed the final version (which was substantially the same as the preceding draft, minus the schedules).
Having made those findings, I do not, however, completely reject the entirety of the wife’s evidence in relation to the agreement.
I accept that the wife felt herself under considerable pressure when the terms of what was to be the final and binding agreement issued. I accept that this document issued at a time when wedding arrangements had been made in an overseas country that involved a number of guests travelling considerable distances, including from Australia. I accept that the wife felt significant pressure to not call off the wedding should she feel the need to consider at some length the proposed final and binding agreement she was to sign.
The wife specifically alleges that the husband said to her words to the effect of, “that if she did not sign the agreement there would be no wedding”. The husband says he did not say this. I am not entirely convinced by his denial in the sense that I find it highly likely that words were used by the husband (however benignly they may have been intended by him) which made it plain to the wife that her signature on the agreement was a precondition to their marriage. Moreover, and by no means insignificantly in my view, I accept that whatever words the husband used, and however benign their intent, the wife genuinely believed that to be his position when the agreement in its final form was presented to her for her to receive advice about and execute.
Section 90K(1)(e) recognises, in terms, that the circumstances pertaining to the particular financial agreement are relevant to a decision as to whether relevant conduct renders it unconscientious for a party (here, the husband) to rely upon the agreement. The circumstances here to which I have regard in applying the relevant principles are:
·At the time the parties met, the husband had been married before, had grown-up children and was in effective control of a very substantial business empire in which he was engaged. The wife was working in a bar … and, on the husband’s evidence, in very poor financial circumstances.
·A relationship developed between the two involving, over time, a degree of economic dependence by the wife upon the husband. In particular, the husband deposed in the witness box that the education of the wife’s child was important to him (and to the wife) and he undertook to pay costs associated with that education which, as is plainly implicit from the husband’s evidence, the wife would not otherwise have been able to afford.
·As the relationship between the parties progressed, the wife commenced to enjoy a level of economic advantage that her pre-relationship circumstances would not have produced. In particular, for example, she travelled with the applicant overseas, including to Australia, and participated in the sort of lifestyle with him that might have been expected from his wealth.
·The husband is a man with a significant business and commercial background; the wife has no such background.
·The wife’s first language is not English. I have found her fluent in English in the sense earlier described, but also consider that she has deficiencies in that language in the manner earlier described. In that regard, it is in my view important to note that, as I have found, earlier drafts were discussed with the wife and, about two weeks prior to signing the agreement, the husband had gone through the penultimate version of the agreement, “paragraph by paragraph” with the wife. That version, which the husband annexes to his affidavit filed 2 September 2011, whilst absent the Schedules, was almost identical in terms of its substantive provisions, to that of the final agreement signed by both parties.
·A period of some years of effective economic dependence by the wife upon the husband preceded the execution of the financial agreement. The financial agreement in its final and purportedly binding form was produced to the wife at the offices of Ms K nine days before the parties’ wedding in circumstances where the wife was in Brisbane but the wedding was to be overseas and arrangements had been made for that wedding to take place, including guests confirming that they were flying to the overseas destination from other places including Australia.
·The wife had, then, effectively no time to consider the agreement in its purportedly binding form or an opportunity to herself ruminate upon the terms of it prior to signature.
·But for the intercession of the husband facilitating the provision of independent advice to the wife, she herself had few contacts in Australia from which she could seek either legal advice and/or with whom to discuss in lay terms the agreement.
·By no means insignificantly, the nature of the agreement which the husband requested the wife to sign eliminated rights that the wife would otherwise have at law (that is, her rights pursuant to Part VIII of the Act) and precluded her having access to this Court in respect of those matters of property and maintenance to which the agreement applied.
The matters to be taken into account surrounding the question at hand should, in the context of a financial agreement, also include, as it seems to me, the fact that the essence of Part VIIIA of the Act is to permit parties to reach agreements irrespective of whether the terms of those agreements might be seen to be “just and equitable” (in the s 79 sense) or “proper” (in the s 74 sense) as the case may be. In other words, the essence of Part VIIIA of the Act is that parties are perfectly free to make a “bad bargain” and to preclude this Court from intervening in it by reason of that fact alone.
Plainly enough, unconscionable bad bargains can, relevantly, be set aside, but the general intention behind Part VIIIA of the Act is, in my view, relevant to a consideration of whether an agreement is unconscionable and, in particular, whether it might be said that particular terms of a particular agreement contribute to any picture of unconscionable conduct in and about it.
This factor is also important because it is not sufficient, in attempting to prove that a bargain is unconscionable, that the parties had unequal bargaining power and nor is relief available where the circumstances can be described as indicative of mere imprudence. That said, if it can be said that a bargain is plainly and manifestly unjust and inequitable (in a s 79 sense) that may be relevant to a consideration of whether it is unconscientious for a party to rely upon the agreement. I make no such finding here.
The phrases italicised in the matters enumerated at paragraph [155] above are emphasised so as to draw a distinction between the circumstances surrounding drafts, offers, counter-offers or other documents that may have passed between the husband and the wife, and those surrounding the agreement as formed (and, thus, in its purportedly binding form).
The relevant time for assessing whether the bargain is unconscionable is the time at which it was entered. The crucial circumstances are those which surround that time, although, of course, preceding circumstances may well comprise part of the latter picture.
Here, there is no evidence from the husband (whose evidence, in those respects I have otherwise accepted) that the earlier drafts were accompanied by any discussion of the mooted agreement being in substitution of rights nor is there any suggestion that, at that time, the wife was offered, or sought, independent advice as to what her rights might be if the mooted draft was formalised. The evidence is that the agreement, in its purportedly binding form, and the opportunity for advice in respect of that document, did not occur until nine days prior to the wedding overseas, with all that attended it, and occurred the day before the wife was to depart Australia.
It will be appreciated that the case law surrounding unconscionable transactions does not pertain to financial agreements. While s 90B financial agreements are, first, agreements just as those referred to in the authorities emanating from commercial environments, they are, nevertheless negotiated between prospective marriage partners – potentially a wholly different negotiating environment with factors pertaining markedly different to commercial negotiations. That is particular so where, as here, the negotiating parties have lived together for some years and, of course, even more so where the relationship and the “negotiating environment” is each attended by the sorts of factors attending this relationship to which I have referred above. Principles of freedom of contract, emphasised as important in the authorities to which I have earlier referred, can, in my view, be seen to apply with much less force to a negotiation between prospective marriage partners. (See Garcia, above and, in McCulloch v Fern [2001] NSWSC 406 per Palmer J at [73], the finding that a husband had a “vulnerability to persuasion” by his (admittedly dying) wife. By way of distinction, see in respect of a commercial transaction, e.g., Attorney-General (NSW) v World Best Holdings Pty Ltd (2005) 65 NSWLR 557 per Spigelman CJ, in particular at 583).

Summary and Conclusions as to Unconscionable Bargain

Does the application of the findings earlier made to the principles just discussed result in a conclusion that it would be unconscientious for the husband to seek to rely upon the financial agreement as made? I am satisfied that:
(a)The wife can be considered a “weaker party” and the husband a “stronger party” in the sense described in the authorities earlier referred to.
(b)The wife can be so described by reason of the combination of factors and circumstances earlier found, namely: the intimate relationship of the parties as partners and soon to be marriage partners; the economic dependence of the wife upon the husband for her and her daughters’ futures; the wife’s lack of business acumen and commercial knowledge generally and the husband’s financial affairs specifically; the disparity in the parties’ knowledge as to commercial and business matters; the fact that English is not the wife’s first language; the husband had accountants well familiar with his business and asset position acting for him and the wife had no such persons; the wife had a very short time in which to consider an agreement which purported to remove significant rights; by that time, a wedding was arranged in an overseas country and was to take place within nine days of the wife receiving the agreement in its final (and purportedly binding) form and she was to leave Australia the day after; the wife felt under very considerable pressure to sign the agreement as a result of that; and there was a limited time for the wife to herself ruminate upon the terms of the agreement in its final and purportedly binding form.
(c)I consider that those matters rendered the wife in a position of “special disadvantage” to the husband as that expression is referred to in the authorities earlier referred to.
(d)The husband knew, or plainly ought to have known, of that special disadvantage constituted in the manner just described.

But, I am not persuaded that the production of the document in its final form, preceded, as I have found, by earlier discussions and the participation of the wife in those discussions including making alterations to a draft that found their way into the final document, constitutes the husband taking advantage of the wife’s “special disadvantage”, notwithstanding the imminence of the wedding and the wife’s departure from Australia for it.
Nor, ultimately, do I consider that the husband’s behaviour in doing so was unconscientious. An agreement that, as I have found, had been some time in the negotiation and, as I have found, had undergone earlier drafts and discussions was sought to be finalised prior to marriage as it had to be if it was to be effective in accordance with its terms as a s. 90B financial agreement. The understandable desire to formalise the agreement, whilst, ultimately, occurring in circumstances of haste and where the wife, as I find, felt under pressure, cannot in my view be described as unconscientious behaviour on the part of the husband.
In my view, the wife’s claim to set aside the agreement as unconscionable must fail.

Consequences of the Agreement Not Being Binding?

The orders to be made as a result of the findings outlined in these reasons will include a declaration that the financial agreement between the parties is not binding. As earlier pointed out, s 90G(1A) will accordingly have operation.
That consequence might have been anticipated by the parties as a possible result in these proceedings. But, as earlier pointed out, it was said during the course of the hearing that further submissions, and, possibly, further material, might need to be filed as a consequence of the finding just made. It seems to me that justice requires that I permit that course to be adopted.
I might however add that, prior to either party incurring further expense in that regard, consideration might be given to the findings earlier made and, in particular, the findings relating to what advice was, or was not, given to the wife. The orders will provide for a mechanism for the making of orders by consent in the event that the parties are agreed as to the future course of this matter.
I order accordingly.

I certify that the preceding one hundred and seventy (170) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Murphy delivered on 22 December 2011.

Associate:

Date: 22 December 2011.