Imbardelli and Imbardelli (No. 2)

FAMILY COURT OF AUSTRALIA

IMBARDELLI & IMBARDELLI (NO. 2)

[2018] FamCA 865

FAMILY LAW – PROPERTY – Section 79A application – whether the orders made in 2010 should be set aside on the basis there has been a miscarriage of justice – whether the orders should be set aside on the basis that the parties had reconciled and it can be inferred that the parties impliedly consented to the orders being set aside – where the wife has long standing mental health issues and was financially dependent upon the husband- where the wife was estranged from her family and had no other support – where in the year leading up to the consent orders being made the wife had given birth to premature twins, suffered physical complications after their birth, had to care for the parties’ 14 month old daughter, had been physically assaulted by the husband, had initiated family law proceedings and had spent approximately two months in hospital receiving psychiatric treatment – found it was unconscionable for the husband to procure the wife’s consent to the orders in the circumstances – alternative finding made that the parties had reconciled and that the circumstances of that relationship give rise to an inference that they no longer intended to be bound by those order- consent implied.

Blackwell v Scott (2017) 56 Fam LR 474
Blomley v Ryan (1956) 99 CLR 362
In the Marriage of McCabe (1995) 19 Fam LR 579
O’Hurley & O’Hurley [2008] FamCAFC 57
Pavey and Pavey (1976) FLC 90-051
Sommerville & Sommerville (1999) 27 Fam LR 233
Thorne v Kennedy (2017) 350 ALR 1

Waterman & Waterman [2017] FamCAFC 23

Evidence Act 1995 (Cth)
Family Law Act 1975 (Cth)

APPLICANT:

Ms Imbardelli

RESPONDENT:

Mr Imbardelli

FILE NUMBER:

MLC

8876

2009

DATE DELIVERED:

24 October 2018

PLACE DELIVERED:

Melbourne

PLACE HEARD:

Melbourne

JUDGMENT OF:

Macmillan J

HEARING DATE:

19, 20, 23, 27 April 2018, 2, 3 May 2018, 19 July 2018, 15 August 2018

REPRESENTATION

COUNSEL FOR THE APPLICANT:

Ms Dellidis

SOLICITOR FOR THE APPLICANT:

AMT Legal

COUNSEL FOR THE RESPONDENT:

Mr Q

SOLICITOR FOR THE RESPONDENT:

Pearsons Lawyers

Orders

The final property orders made by consent on 30 June 2010 be set aside pursuant to s 79A of the Family Law Act 1975 (Cth).
The wife’s Amended Initiating Application filed 1 September 2017 be listed for further directions in the Registrar’s Duty List at 9.30 am on 16 November 2018.
I recuse myself from these proceedings.

Note: The form of the order is subject to the entry of the order in the Court’s records.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Imbardelli & Imbardelli (No. 2) has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).

FAMILY COURT OF AUSTRALIA AT MELBOURNE

FILE NUMBER: MLC 8876 of 2009

Ms Imbardelli

Applicant

And

Mr Imbardelli

Respondent

REASONS FOR JUDGMENT

The substantive application in this case is the wife’s Amended Initiating Application filed 1 September 2017. The wife seeks to set aside final property orders (“the final orders”) made by consent on 30 June 2010 by Federal Magistrate Hughes (as she then was) pursuant to s 79A of the Family Law Act 1975 (Cth) (“the Act”). The wife also sought an order for interim spousal maintenance and on 22 May 2018 I made an order that until further order, the husband pay the wife spousal maintenance in the sum of $1,000 per week.
The wife’s case is that there are two grounds for setting aside the final orders. They are as follows:
·Pursuant to s 79(1)(a) of the Act there has been a miscarriage of justice by reason of fraud, duress, suppression of evidence (including failure to disclose relevant information), the giving of false evidence or any other circumstance; and
·Pursuant to s 79A(1A) of the Act which provides that the Court may on the application of a person affected by an order made by a Court under s 79 of the Act in property proceedings, and with the consent of all the parties to the proceedings in which the order was made, vary the order or set aside the order if it considers appropriate. It is the wife’s case that the parties’ consent to the orders being so set aside can be implied by their conduct subsequent to those orders being made.
The issues the Court must determine are therefore in summary as follows:
·What were the circumstances leading up to and at the time of the orders being made in June 2010 and was there duress, undue influence or unconscionable conduct; and
·If there was duress, undue influence or unconscionable conduct, or some other circumstance whether there has been a miscarriage of justice; and
·Whether, in the event that the Court is satisfied that there has been a miscarriage of justice, the Court should exercise its discretion to set aside the orders.
With respect to the question of whether the Court should find that the parties impliedly consented to setting aside the orders, the issues the Court needs to consider are:
·Whether there was a reconciliation following the wife’s discharge from hospital in March 2010 or at some later date;
·The nature of the parties relationship after they resumed co-habitation in March 2010;
·Whether the circumstances of a resumed relationship and the parties’ conduct give rise to an inference that amounts to implied consent to set aside the orders made in 2010 or an intention to no longer be bound by the 2010 orders.

Background

The husband is 48 years of age and is in good health. He and his brother Mr I Imbardelli work together in a business which is operated under the umbrella of the Imbardelli Family Trust (“the Trust”). The trustee of the Trust is K Pty Ltd. The husband, his brother and his brother in law Mr M are the directors of K Pty Ltd. Although Mr M was only appointed as a director on 16 October 2017 he is the appointor of the Trust and has been the sole appointor since 1996 when the Trust was established. The shareholders of K Pty Ltd are the husband and his brother and they each hold one ordinary share.
The wife is 45 years of age. The wife has had long standing mental health issues and is in receipt of a disability pension. Pursuant to the orders I made on 22 May 2018, the wife is to receive interim spousal maintenance of $1,000 per week. I will discuss the wife’s mental health history in more detail later in these reasons.
There are three children of the marriage, D born in 2008 (aged 10), and twins E and F born in 2009 (aged nine). Pursuant to the orders made by consent on 11 December 2017 the children live with the father and spend time with the mother every Sunday, in week one from 10.00 am until 2.00 pm and in the other week from 10.00 am until 4.00 pm, telephone contact each Tuesday and Thursday and as otherwise agreed between the parties in writing.
The parties were married in December 2002. They separated for the first time in September 2009 after the wife alleges the husband punched her in the face and head. The wife deposes that she called the police and that they obtained an Intervention Order on her behalf as a result of which the husband was required to vacate the property in which they lived at B Street, Suburb C (“the former matrimonial home”). The wife remained living in the property with D, the eldest child of the marriage. The younger children were born prematurely and remained in hospital for approximately 100 days after their birth. After being released from hospital on or about 23 September 2009 the twins lived with the wife and the eldest child in the former matrimonial home.
On 2 October 2009 the wife filed an Initiating Application in the Federal Magistrates’ Court (as it then was) seeking, inter alia, parenting orders and property settlement. On 21 October 2009 following an interim defended hearing, orders were made for the children to live with the husband and spend time with the wife from 9.30 am to 4.00 pm each Monday, Thursday and Sunday. The orders required the husband to be in substantial attendance while the children were in his care and the wife to have an adult in attendance when the children were in her care.
The wife deposes that following those orders being made she became increasingly distressed and anxious. She was at this time being treated by her psychiatrist Dr N and on 5 January 2010 she was admitted to P Hospital under the care of Dr N.
On 12 February 2010, final parenting orders were made by consent. Although the wife was in P Hospital at the time receiving psychiatric treatment, she came out of hospital that day and was brought to court by the husband to attend the hearing. The parties agree that they signed heads of agreement in relation to the property proceedings on the same day.
The wife was discharged from hospital on 9 March 2010, collected from the hospital by the husband and returned to live in the former matrimonial home. She agreed to the discharge of the Intervention Order she had obtained on 15 September 2009 in order for this to occur.
On 30 June 2010, final property orders were made by consent. The wife was not represented on that day but she did attend her solicitor’s office the day before to sign the minute of orders in anticipation of the hearing. It is these orders that the wife now seeks to set aside.

Material Relied Upon

The wife relies upon:
·her Amended Initiating Application filed 1 September 2017;
·her Affidavit filed 16 February 2018; and
·her Financial statement filed 15 January 2018.
As the wife had not replied to the husband’s trial affidavit, she was also given leave to give some oral evidence in chief by way of reply.
The husband relies upon:
·his Response filed 31 August 2017;
·his Affidavit filed 7 September 2017;
·his Affidavit filed 16 January 2018;
·his Affidavit filed 15 March 2018;
·his Financial Statement filed 16 January 2018;
·Affidavit of Ms G Imbardelli filed 15 March 2018;
·Affidavit of Ms H filed 15 March 2018; and
·Affidavit of Mr I Imbardelli filed 15 March 2018.

Financial Circumstances As At The Date Of The Final Property Order

In the course of final addresses counsel for the husband made a number of submissions with respect to there being no evidence as to the parties’ financial positions at the time of the final property orders or as to the basis upon which those orders were made. Neither counsel appeared to be aware of the parties having both filed financial statements in late 2009 when the proceedings were commenced. When the existence of these financial statements was brought to their attention both counsel agreed that those documents should form part of the evidence. Counsel for the husband also submitted that a transcript of the proceedings before Federal Magistrate Hughes (as she then was) on the date she made the final orders should also be in evidence. That transcript was ordered and made available to the parties. The parties were given an opportunity to seek a further mention for the purposes of making further submissions within seven days of such transcript being made available however neither party sought to do so.

Standard of Proof And Evidence

The standard of proof in this case is the balance of probabilities. Section 140 of the Evidence Act 1995 (Cth), whilst not limiting the matters the Court might consider, requires the Court to take into account the following matters:
·The nature of the cause of action or defence; and
·The nature of the subject-matter of the proceeding; and
·The gravity of the matters alleged.
The parties in this case gave very different versions of the history of their relationship, the circumstances of their separation in September 2009, the circumstances at the time the final property orders were made and the nature of their relationship since they separated in September 2009. Much will turn in this case on which version of the evidence in relation to these matters the Court accepts.
The wife did at times appear confused about some of the history following separation and leading up to the making of the final property orders and there is no dispute that during this period the wife had significant mental health issues and her treating psychiatrist at the time described her thinking leading up to her admission to P Hospital as gradually becoming “more disorganised”. Notwithstanding this, I generally have a great deal more confidence in her evidence. I am satisfied, as submitted by counsel for the wife, that the wife was doing her best to tell the truth and that she generally made concessions when it was appropriate to do so.
On the other hand I found the husband, as referred to in my reasons delivered on 22 May 2018, both evasive and disingenuous. As submitted by counsel for the wife, the husband frequently said he could not recall matters that were put to him in cross-examination and it was my observation of his evidence and I am satisfied, that he frequently did so in order to avoid giving evidence which he perceived might be adverse to his case. This was a significant point of difference between his evidence and the wife’s evidence. In contrast and notwithstanding some uncertainty on the wife’s part, which I am satisfied was likely to be attributable to her mental health issues at the time, her evidence was often quite detailed which lent weight to that evidence and gave me more confidence in it.
The husband, unlike the wife, was reluctant to make concessions even when faced with evidence which clearly contradicted his version of that evidence. One example was his evidence that because of the wife’s mental health issues, he did not leave the children alone in her care and that either he or his mother were in attendance at all times. The evidence clearly suggested otherwise and I am satisfied that as the wife asserts, albeit it may not have been immediately upon her discharge from P Hospital and return to the former matrimonial home, she resumed her parenting role, taking the children to their pre-schools and schools, their other activities and medical appointments, mostly unaccompanied by the husband, his mother or any other person. The husband struggled to make any concessions even when confronted with this evidence.
The husband’s brother was also not a good witness. His main focus, it seemed, was to make sure that he did not say anything or make any concessions that he perceived might damage his brother’s case. In my reasons delivered on 22 May 2018, I was critical of the way in which the husband and his brother attempted to distance the husband from the Trust in circumstances where it was clear and I am satisfied on the balance of probabilities that they exercise control over the Trust for their own benefit. The husband even admitted in cross-examination that his brother in law had been appointed as a director of K Pty Ltd so as to distance the husband from the Trust’s demands that the wife should vacate the former matrimonial home.
The husband’s mother was also not a good witness and similarly appeared to find it extremely difficult to make concessions that she perceived might disadvantage her son’s case.
Although it does not necessarily follow that just because I accept one party’s version of the evidence in relation to a particular matter that I should accept that party’s evidence on all issues in all of the circumstances of this case where there is a dispute between the wife’s evidence and the husband’s evidence, that of his brother and/or his mother I prefer the wife’s evidence.

The circumstances leading up to the making of the final property orders

It is necessary in this case to set out in some detail the background to the parties’ relationship and the context in which the final parenting and property orders were made in 2010.

The wife’s deteriorating mental health

As previously referred to on 5 January 2010 the wife was admitted to P Hospital under the care of her psychiatrist Dr N as a result of her deteriorating mental health. Some months prior thereto the wife had given premature birth to the twins who had remained in hospital for 100 days following their birth. During the time the twins remained in hospital the wife had a womb infection, severe gastroenteritis and mastitis and had to have a tonsillectomy. She was also caring for the parties’ eldest child during this period, who was at the time just over two years old. The wife was expressing breast milk and driving to the T Hospital each day to visit the twins and give them the expressed breast milk. Although it is the husband’s case that he was also involved in the children’s care, he does not generally take issue with the evidence in relation to the wife’s physical or mental health. To the contrary, he frequently referred in his evidence to the wife’s mental health issues.
There is no dispute that the wife’s admission to P Hospital was not her first admission to hospital for mental health issues. Dr N in a report dated 23 August 2017, which he prepared at the request of the wife’s solicitor, described the wife as having had “...an established diagnosis of schizophrenia with previous inpatient admissions for this condition”. He further reported as follows:
In the time I have known [the wife] she has had one florid episode of psychosis which required hospitalisation under my care at [P Hospital] 5/1-9/3/2010. Since that time she has had times where her mood has been low, where she has increases in anxiety and some periods of vagueness of thinking, which has been an early warning sign for her illness.
He further reported as follows:
I first became aware in 9/2009 of family conflict, with concerns that there was not enough support available for her children. During the consultation 15/9/2009 she reported to me that she had been assaulted by her husband the previous evening and had taken out an interim Intervention Order. At that time she was allowed to live in her home with her daughter while her twins were still in hospital at [T Hospital].
During this period of multiple court hearings her thinking gradually became more disorganised, she became more distressed when following one court hearing in October 2009 the custody of the children were with her husband, with [the wife] only being allowed supervised access. At that time she also spoke with a community organisation (WAYSS) about finding a domestic violence counsellor. She was struggling with decisions about pressing charges of assault against her husband.

Abuse in the parties’ relationship

It is the wife’s case that her relationship with the husband prior to separation was characterised by physical, financial and emotional abuse and control and that she was also subjected to financial and emotional abuse and control after she returned to the former matrimonial home in March 2010, prior to the final property orders being made.
The wife deposed to a number of incidents of physical abuse and she was cross-examined in particular, as was the husband, in relation to the incident on 14 September 2009, which she asserted lead to their first separation. It was the wife’s evidence that the husband punched her on the left hand side of her head and ear. The husband denied having hit the wife and said that she appeared to have been drinking and had what he referred to as an episode, where she left the home and was half way up the street, she was on the phone and refused to return to the home with him. He said he had to rush back to the home because the eldest child was there at the time. He did not say either in his affidavit or in cross-examination what lead to the wife leaving the home.

The husband’s version of this incident was put to the wife by her counsel in evidence in chief. She denied being under the influence of alcohol that day and to the contrary said that she has not drunk any alcohol in 11 years. She also gave detailed evidence about the incident including that she called her cousin, her psychiatrist and the husband’s brother for assistance, that the husband had locked the house and that when his brother attended he had asked her how to gain access to the house. She also said that she went to the hospital and that the police applied for an Intervention Order on her behalf. Although there was some dispute as to whether the husband was removed by the police after they were called by the wife or whether the husband drove himself to the police station, there was no dispute that the wife called the husband’s brother, (who I note gave no evidence about this incident notwithstanding that he was a witness in the case), reported the assault to her psychiatrist the following day and that as the husband conceded in cross-examination, the police obtained an interim Intervention Order against him.
The wife’s evidence about this incident was detailed and quite compelling. She appeared to be quite shaken by having to recall this incident and although the wife conceded that she might have been mistaken about whether the husband went to the police station, generally her evidence remained consistent. The husband on the other hand was somewhat offhand seeking to attribute the wife’s version of events to her mental health. Weighing up all the evidence and in particular having had the benefit of hearing both the husband and wife cross-examined in relation to this incident, I am satisfied that the husband did, as asserted by the wife, physically assault her on this occasion. As previously referred to when there is a dispute between the evidence of the husband and the wife I prefer her evidence and on that basis I also accept the wife’s evidence as to the history of family violence generally.

Financial arrangements and dependence

The husband’s evidence was that although the wife had had mental health issues at the time of the marriage, she was in employment and continued in that employment until the birth of their first child. The wife did not return to the workforce after that child’s birth. It was the wife’s evidence that prior to their separation she had access to a joint bank account and the use of a supplementary credit card which she used for groceries and other expenses but that the husband would check her expenditure on an almost daily basis and question her about purchases she made outside the household’s requirements. The wife’s evidence was consistent with the husband’s Financial Statement filed in 2009 in which he disclosed having two joint accounts describing one as being utilised by the wife.
The husband deposed that after the wife was discharged from P Hospital he
…took a compassionate view of [the wife’s] situation, in particular her mental health issues. I decided to permit the Wife to continue to live at the [B Street] property. I understood and appreciated that it would be difficult for her, because of her mental health issues, to find alternate accommodation.
He said that although he and the wife did not intermingle their finances he gave the wife the use of a supplementary credit card which he said was for the purposes of giving effect to paragraph 7 of the final property orders. Paragraph 7 of those orders provided as follows:
That the husband will pay to the wife the following ongoing expenses, until such time as the wife either re-partners, is living in a domestic relationship or is married, or is well enough to obtain employment to support herself or by 1^st January 2017 whichever occurs first:
(a)     Reasonable gas and electricity expenses;
(b)    Private health insurance;
(c)    Reasonable mobile phone expenses for a mobile phone and plan chosen by the husband;
(d)    Reasonable petrol expenses;
(e)    Maintenance expenses for [motor vehicle 1];
(f)     Rental accommodation up to $350 per week;
(g)    Other expenses as agreed between the parties.
The wife said that whilst she was a patient at P Hospital she applied for a disability pension and that when she was discharged and returned to the former matrimonial home she discussed with the husband whether she should advise Centrelink that they had reconciled. It was her evidence that the husband said that she should not do so as he pays a lot of taxes and that they should get something back from the government. It is clear from the transcript of the proceedings before Federal Magistrate Hughes (as she then was) that although she was told that the wife was in receipt of Centrelink benefits that was said to be in “respect to the children” not because of her disability. Somewhat surprisingly it does not appear that Federal Magistrate Hughes (as she then was) was told that the wife had returned to live in the former matrimonial home and to the contrary it is reasonable to infer based upon what Her Honour said that day that it was her understanding that the children lived with the husband and that the parties lived separately. Her Honour referred to the “..spouse maintenance orders which are extensive and ongoing” and “..,indefinite, really, until she’s well enough to really support herself”. And it was on that basis that Her Honour appears to have concluded that the orders were “a just and equitable distribution of the property.”
It was the wife’s evidence that each fortnight she would withdraw the entirety of her pension and give the husband half in cash. Counsel for the husband put to the wife that she had not said, prior to giving her oral evidence, that each time she received her disability pension she went to the bank to cash it and gave half to the husband and that was because she had not done so. However it is clear from the notes of the wife’s clinical psychologist Dr Q which were in evidence before me that even if the wife did not specifically refer to going to the bank to cash her cheque before giving half to the husband she had told her psychologist that the husband expected her to give him half her pension to put towards household expenses. Although the wife did concede in cross-examination that it may have been 8 out of 10 times rather than on every occasion I am satisfied having heard her evidence her evidence in relation to this issue and generally and having regard to the other evidence that wife generally gave half of her pension payments to the husband using most of the balance she retained for medical expenses.
It was the wife’s case that, although she had the use of the supplementary cards, both prior to their separation in September 2009 and after her return to the former matrimonial home, the husband monitored and controlled her expenditure. Although he did not concede that he was financially controlling, the husband did admit checking the wife’s use of the credit card and that he thought she spent too much. When it was put to him that he had been angry about her expenditure, he said that he had been disappointed rather than angry. He also acknowledged that in so far as his mother was critical of the wife’s excessive spending, that could only have been because of what he had told her. Significantly in my view he also said that he had expected the wife to repay him for personal items, which he described as “silly little things” and “trinkets.” This of course was in circumstances where her only income was the disability pension and I have found that she generally gave him half of her entitlements and used the balance for her medical expenses.
Although Dr Q in her notes also referred to the husband and the wife managing their monies separately in my view this is meaningless in circumstances where the wife’s only income was the disability pension and where even the husband conceded that she was otherwise entirely financially dependent upon him. I am satisfied that upon the wife’s return to the former matrimonial home in early 2010 the parties’ financial relationship was in essence, albeit possibly somewhat more controlled, as it had been prior to their separation. The husband being the breadwinner and financially supporting the family and the wife the homemaker.
It is also clear from the evidence of the husband, the wife and the husband’s mother and I am satisfied, that the wife was using the supplementary card for household expenditure, as she had done prior to separation and after she returned to the former matrimonial home for the family generally and not as suggested by the husband in his affidavit in accordance with the terms of the final property orders.
I have referred in my Reasons delivered 22 May 2018 to the lengths the husband and his brother went to distance the husband from the Trust and from having any interest in the former matrimonial home. Notwithstanding that he and the wife lived in that property throughout the marriage, the husband resisted any reference to it as the former matrimonial home and even suggested that there was no guarantee that he would be permitted to continue living in the property. His brother, for his part, referred to the husband not having a principal place of residence. Importantly in terms of the stance they took against the wife, they also appointed their brother in law as a director of K Pty Ltd following separation in order to distance themselves from the application to have the wife removed from the home with both the husband and his brother deposing to the fact that the Trust had only given permission for the husband to live in the property and not the wife.
I am satisfied that the husband had through his solicitors requested the return of motor vehicle 2 in the wife’s possession for the purposes of what he said were necessary repairs but that the wife had refused those requests. As a consequence of the wife’s refusal to return the vehicle the husband took matters into his own hands attending at the former matrimonial home where the wife was living in the early hours of the morning and removing the vehicle. However I am also satisfied that even it if was as the husband says necessary to remove that vehicle in order to affect repairs, there is no evidence to suggest that the husband and/or his brother offered to return it to the wife upon completion of those repairs.
It was the husband’s case, referred to on a number of occasions during his evidence, that he allowed the wife to return to the former matrimonial home and provided support for her out of the goodness of his heart, not because they had reconciled. I will refer to this issue of whether or not the parties reconciled in more detail later in these reasons. However I am satisfied, whether or not they had, that both prior to and following the first separation, the husband had financial control over the wife, that her access to funds to meet her expenditure was controlled by the husband and that, as the wife said, he used the wife’s financial dependence upon him as a means of control. This is also consistent with the husband’s conduct following final separation in relation to his responsibility for the wife’s financial support, the way in which he went about having her removed from the former matrimonial home and the removal of the car she was driving at the time of separation.

Did the Parties Reconcile?

The question of whether or not the parties reconciled is relevant not only for the purposes of determining whether or not based upon that reconciliation the parties can be said to have consented to the orders being set aside, but also in relation to the circumstances leading up to the final property orders being made on 30 June 2010. It is the wife’s case that she consented to those orders on the basis of the parties having made the decision to reconcile.
In Pavey and Pavey (1976) FLC 90-051 (“Pavey”) the Full Court agreed with the statement made by Watson J in Todd and Todd (No 2) (1976) FLC 90-008 where he said at 75,079 as follows:
…
What comprises the marital relationship for each couple will vary. Marriage involves many elements some or all of which may be present in a particular marriage ̶ elements such as dwelling under the same roof, sexual intercourse, mutual society and protection, recognition of the marriage by both spouses in public and private relationships…
The Full Court in Pavey added at 75,209 to that “the nurture and support of the children of the marriage”.
Counsel for the husband relied upon various pieces of evidence which he submitted supported his client’s case that he and the wife had lived separately and apart under the one roof and that there had been no reconciliation. They included the following:
·The wife’s email to her then solicitor dated 21 June 2010 in which she said, inter alia, that she could not afford independent accommodation, was residing downstairs at B Street, that their separation had become a lot more amicable because of this arrangement and that it enabled her to spend more time with the children;
·A referral letter from her psychiatrist Dr N to Dr Q her clinical psychologist dated 14 May 2013 in which he wrote as follows:
She is actually a very lovely lady who had quite a traumatic admission about 3 to 4 years ago to [P Hospital] where she had a psychotic episode and brought an intervention order against her husband and caused an enormous amount of problems. They have three young children and now [the wife] and her husband kind of live separate lives in the interests of looking after the children.
·A letter from Dr Q to Dr N dated 19 December 2013 in which she wrote as follows:
As you know I have continued to see [the wife] on a regular basis and she has engaged well in therapy. She reports an overall improvement in her mood and ability to cope with things (although the Christmas period has been somewhat challenging for her).
Some of the areas that we have covered in therapy have included doing some problem solving around practical issues, improving her interpersonal effectiveness skills (i.e. discussing how she can express her needs more effectively in her relationships and setting limits/boundaries) as well as continuing to improve her self-care. [the wife] uses the sessions very appropriately and finds it a useful space to talk through various experiences. In particular [the wife] finds the relationship between her and her husband, whom she says she is separated from, difficult at times and she often finds it hard to recognise her own strength and abilities due to his inaccurate perceptions of her and her illness. I believe [the wife] will benefit from continuing to work on herself and to improve her self-confidence so that she begins to feel more empowered within this relationship.
·A letter from Dr N to Dr Q dated 14 February 2014 in which he wrote as follows:
…I think she has been struggling on and off with her mental health state over the past couple of months. It seems to be clearly exacerbated now in the context of an influenza type illness for the last couple of weeks. Obviously I am concerned that some of her disorganisation, flatness in mood and decreased energy may be due to schizophrenia illness recurring, but I have just organised a panel of blood tests and you will receive copies of the results.
…
She obviously has a fairly controlling husband and as you know they are separated but still living in the same house. He is extremely resistive to the idea of her getting a cleaner occasionally which I think would be really helpful in taking some of the pressure off her….
Dr N increased the wife’s medication at this time.
·Dr Q’ note of her session with the wife on 2 March 2017 in which she recorded as follows:
-[the wife] stated that she had contacted [the husband]’s mum since their last argument in which he was verbally abusive and she had spoken to him; apparently he feels that she is not managing the home well- he only wants to bring in the income
-since his mother spoke with him he has said nothing to her
-Saw [Dr N] who described his anger as a ‘displacement’ of his own frustrations
-[Dr N] agreed that [the husband] was being nasty
-Has been managing by minimising her contact with him
-[the husband] has minimal contact with the kids –he gets frustrated when she expects him to get involved with the kids and their routine when he returns from work
-They manage their monies separately and it has been this way for a long time but expects her to give half of her DSP to him to put towards the household; she uses her DSP mainly for her medical expenses
-Discussed possibility of her finding work – does not feel like she can; she worked for 10 years in tourism but feels that cognitively she can’t manage this now but also because of the demands of the kids as well
-Discussed the idea of separation but she feels like she will be ‘failing the kids’ if she divorces or separates from [the husband]. Explored this thought further and challenged this thinking somewhat.
-Does not have a romantic relationship with [the husband]
-Sleeps in separate rooms
-he provides her with no emotional support
-she is financially dependent on him for housing
-discussed that should they separate she would be entitled to something
-Her fears of being a single mum are to do with feeling alone- suggested that she is already quite alone in the relationship; lack of companionship- suggested that he currently does not provide any-their main focus for communication is about the girls
-she is aware she can get legal advice
-will wait and see for now as they are going away shortly; but will consider getting legal advice should the abuse continues [sic]
…
Counsel for the husband submitted that each of these documents is consistent with his client’s case that there was no reconciliation, that he and the wife lived separately and apart under the one roof and maintained separate finances. And not consistent with the wife’s case that that they resumed their relationship and in particular her evidence that they had a sexual relationship. He also submitted that although to the world at large he and the wife presented as a couple, that this was no-one else’s business and in those circumstances it was not surprising that they presented as an intact family.
Counsel for the wife also tendered various letters and clinical notes upon which she relied which presented a somewhat different picture. These included the following:
·A letter from Dr Q to Dr N dated 29 May 2017 in which she wrote as follows:
I have continued to see [the wife] on a regular basis and I am writing to provide feedback on her progress as she has completed six sessions since your last referral. She has presented with relatively stable mental state over the past few months despite some challenges at home. As you will be aware she had a difficult time with [the husband] a few months ago when he became abusive towards her, criticising her for not being on top of the household chores and making comments about her leaving the family home and him having custody of their children. Understandably this was a [sic] difficult for her but she managed it appropriately by seeking support with you, myself and her mother-in-law who is one of her major supports.
In recent weeks, things appear to have settled again, with no further conflict between [the wife] and [the husband]. She reported that the family holiday to [the U.S.A.] went well and it was an enjoyable time for them all. This ‘up and down’ pattern where things escalate and then settle back again appears to be the ongoing pattern for [the wife], but she is coping with this a lot better these days as she does not take on [the husband]’s criticism personally as much and can recognise and separate his issues with her own. One of the main things we have been working on is helping her see her on [sic] value and strength so that she is not as impacted by his verbal abusive [sic]. [The wife] is slowly beginning to see how well she has been managing her role as a mother in particular, despite her mental health and very little emotional support from [the husband] or even her own family.
…
·A letter from Dr N to Dr S dated 20 July 2017 in which he wrote:
more arguments and conflict with Hb
she is thinking of separation now, it really looks like things are reaching a tipping point, she feels overly controlled with [the husband] threatening to cut off her access to finances.
·A letter from Dr N to Mr O dated 20 July 2017 in which he writes:
Hi Mr O
[The wife] is a long term patient of mine with stable schizophrenia and anxiety.
She is in a conflictual marriage with her husband and they have three young girls.
She is considering separation and I would be grateful if you could talk to her about her options for accommodation and finances etc to give her some ideas of what is available if she does separate from him.
….

In my view these documents relied upon by the parties also tend to support other aspects of the wife’s evidence. For example the medical notes and records also refer to and tend to corroborate the wife’s evidence as to the husband’s verbal and financial abuse, that the husband would make the wife give him half her disability benefits and that he was not involved in the care of the children all of which is denied by the husband. The notes also record that the wife sought assistance from the husband’s mother and that she intervened on the wife’s behalf. The husband’s mother appeared to be very uncomfortable when cross-examined about this issue. Although she conceded that the wife had confided in her as previously referred to she was reluctant to make any concessions with respect to anything the wife had said to her that might be perceived as negative to the husband’s case. They also contradict the husband’s evidence that the wife needed to be monitored and that it was he and his mother who were largely responsible for the children’s care.
In my view these documents lend significant weight to the wife’s evidence in relation to the nature of her relationship with the husband and particularly so, in relation to her evidence about being the children’s primary caregiver.
Perhaps even more importantly, these documents are only part of the evidence and I must weigh up all of the evidence. That evidence includes but is not limited to the following matters:
·The husband visited the wife in hospital both with the children and alone and attended appointments with the wife’s treating medical practitioners during her hospitalisation;
·The husband collected the wife from the hospital upon her discharge and they returned to the former matrimonial home;
·Before the final property orders were made the husband paid for the wife to take a holiday in the USA;
·The parties lived in the same house for some seven and a half years after her discharge from hospital in March 2010 making plans for their future lives together including the purchase of the property at U Street and according to the wife making visits to check on progress at the property, collect mail and bring in the rubbish bins. Although when this was put to the husband he said words to the effect that although they may have visited the property it was in “passing” and not as a family visit. The husband’s evidence was not convincing and I prefer the wife’s evidence;
·I am satisfied that the wife was the primary homemaker and cared for the children during this time as she had done prior to the parties’ separation in September 2009;
·The parties resumed the financial arrangements similar to those they had had prior to their separation in September 2009, the husband being the breadwinner and the wife being reliant upon him for her support but as I have found giving half of her disability benefits to the husband to meet family expenditure;
·The parties did not give effect to the final property orders notwithstanding that it would have been a simple matter to transfer the motor vehicle to the wife as provided by the orders;
·Neither the husband or wife applied for a divorce and notwithstanding that there were orders in place that the husband submits would have enabled the wife to leave had she chosen to do so, she did not leave nor is there any evidence of the husband having asked her to leave;
·The parties took regular family holidays including expensive overseas holidays, and the husband conceded that he had not taken any interstate or overseas holidays without the wife. The husband also agreed that during a recent overseas holiday they had had two rooms the inference being that he and the wife were in one room and the children were in the other;
·The parties entertained family and friends and mixed with other parents at the children’s pre-schools and schools presenting as an intact family;
·Only the husband’s mother and brother said that they knew the parties were living separately and apart under the one roof;
·No mention was made of the final parenting orders to staff at the children’s schools until after the final separation in August 2017;
·Neither party had a relationship with anyone else and the husband had a vasectomy in 2010 notwithstanding his evidence that he was not in a sexual relationship with either the wife or anyone else; and
·The wife gave evidence which was not challenged about discussions she had with the husband in mid-2016 about the purchase of the property at U Street and of visits to check on the property, collect mail and bring in the bins, a property she was intended as a family home. Although when this was put to the husband he said words to the effect that it was not as a family he ultimately conceded that they might have done so if they were passing. The husband’s evidence was not convincing and I prefer the wife’s evidence.
The wife annexed a number of photographs to her affidavit. Although those photographs alone are not determinative they do present a snapshot of family life and what in my view appears to be a normal happy couple and family. The photograph of the husband and the wife on holiday in Fiji in July 2016 is in my view, telling. The husband’s attempt to suggest that this was not him and the wife dining alone on holiday and that the children were also present, albeit out of the frame, was not convincing.
The husband’s case tends to ignore the possibility that even a poor relationship may still be a relationship for the purposes of the matters the Court must decide. Accepting that in March 2017 the wife may have described herself as not having a romantic relationship with the husband, that they slept in separate rooms and that he did not provide her with emotional support that does not mean that it was not a continuation of their relationship, albeit perhaps nearing the end of that relationship as referred to in the doctors’ notes.
The wife’s evidence was that while she was still in P Hospital she and the husband discussed reconciling and that she consented to the final parenting orders so as to have the legal proceedings over with so that she could return home and they could move on with their lives as a family. The orders are themselves consistent with the parties adopting this course. The final parenting orders made 12 February 2010, discharged the previous interim orders which specified times for the children to spend with the wife and whilst providing for the children to live with the husband, otherwise provided that the children spend time and communicate with the wife as agreed. In my view, this order suggests that the parties had already envisaged that they would be living together and is consistent with them on the one hand wanting to reconcile but on the other hand, the husband wanting the security of knowing that if the wife’s mental health were to again deteriorate, the children would remain in his care.
In my view the heads of agreement signed by the parties on the same day the final parenting orders were made are also consistent with there being a reconciliation with the husband wanting to finalise the financial arrangements to secure his position in the event of any further breakdown in the relationship. The heads of agreement provide for a small motor vehicle registered in the name of the family trust to be transferred to the wife or for her to be provided with a maintained car, although it is not clear how that expense would be met. They also provide that the wife retain her mobile phone and laptop at the expense of V Pty Ltd which is the business operated by the husband and his brother, that there be a superannuation split in the wife’s favour of half of the husband’s superannuation entitlements and that the applications for property settlement and spousal maintenance be otherwise dismissed. According to the husband’s Financial Statement he had superannuation entitlements of approximately $100,000. The wife was still an inpatient at the time she signed the heads of agreement, had not been engaged in employment since prior to the birth of the parties’ first child, had no income or other means of support and the heads of agreement apart from providing her with a car, a mobile phone and a laptop otherwise made no provision for her support. The obvious inference being that it did not need to because the parties’ intention was that the wife would be returning to the former matrimonial home.
By the time the final property orders were made the wife had returned to the former matrimonial home and there is no evidence to suggest that there was likely to be any change in that arrangement. The wife’s entitlement to property settlement pursuant to those orders was the transfer to her of motor vehicle 1 registered in the name of W Pty Ltd. According to those orders the wife was otherwise to receive by way of ongoing spousal maintenance entitlements reasonable electricity and gas expenses, private health insurance, reasonable mobile phone expenses, reasonable petrol expenses, maintenance of motor vehicle 1, rental of up to $350 and other expenses as agreed. In circumstances where it is common ground that the wife was living in the former matrimonial home and financially dependent upon the husband, I am satisfied that it was not intended that the parties would give effect to the orders in so far as they related to the wife’s maintenance nor did they do so. I have already found that I do not accept that the financial support provided by the husband was in compliance with these orders. Motor vehicle 1 was not transferred to the wife and the wife did not require and was not paid the $350 for rental accommodation nor her reasonable gas and electricity expenses.
Significantly in my view there was no mention to Federal Magistrate Hughes (as she then was) when she made the final property orders that the parties were living in the same premises. To the contrary her Honour was told that the wife was still in receipt of $819 per week from the “company trust” and “Centrelink benefits with respect to the children” and that it was likely based on the transcript of the proceedings that her Honour believed that the wife had the benefit of “extensive and ongoing’ spousal maintenance orders”. Based upon the evidence before me I am satisfied that this was not the case.
Whilst the wife did concede in cross examination that she had some difficulty recalling events following her discharge from P Hospital and that she may have slept in the bedroom downstairs for a period after her discharge she did not resile from her evidence that she and the husband had ultimately resumed a sexual relationship and shared a bedroom. Although there was also evidence of the wife having told her psychiatrist and psychologist at various times that she and the husband were living separately and apart under the one roof and in separate bedrooms as previously referred to there are also references in the notes and in correspondence in the latter years of the relationship to the effect that the wife was considering separation. I also accept the wife’s evidence that she had been embarrassed to tell her treating medical and psychological practitioners that she had resumed her relationship with the husband after he had assaulted her.
Although it is not a requirement in order for the court to be satisfied as to the existences of a marital relationship that the parties either share a bedroom or have a sexual relationship as previously referred to, the wife was a convincing witness and I accept her evidence that she and the husband did resume a sexual relationship and at least part of the time shared a bedroom, which is also consistent with them sharing a room on holidays and the other evidence to which I have referred which leads me to the conclusion that they had reconciled. I do not accept the husband’s evidence that he only allowed the wife to return to live in the former matrimonial home out of the goodness of his heart because she had nowhere else to go and so that she could maintain a relationship with the children.
With respect to the husband’s reliance upon the wife having said in her application for bankruptcy in 2011 that she did not have a spouse or partner it was the wife’s evidence that she did so at the insistence of the husband as he said he did not want “anything to do with the bankruptcy”. She also said that he had previously told her he would take care of her legal bills. It was as a consequence of her being sued by solicitors she had instructed to act on her behalf when she and the husband first separated that she applied for bankruptcy. It was clearly the case that the wife had no capacity to pay those costs given the orders that were made. I found the husband’s evidence that it was a matter for the wife how she paid her legal fees disingenuous in circumstances where he acknowledged her financial dependence upon him and was aware that she had not capacity to pay those legal fees. In all of the circumstances I accept the wife’s evidence.
As previously referred to, when there is a dispute between the evidence of the husband and the wife I prefer the evidence of the wife and weighing up all of the evidence I am satisfied on the balance of probabilities that even if the parties did not immediately resume all aspects of their marriage upon the wife’s discharge from P Hospital that the wife returned to the former matrimonial home for the purposes of resuming the marriage, consenting to final parenting and financial orders with that in mind and that they did reconcile, the separating finally in August 2017.

Legal Principles

The wife is seeking to set aside the orders made in 2010. Section 79A of the Act sets out the matters about which the Court must be satisfied and based upon which it may exercise its discretion to set aside orders made pursuant to s 79 of the Act. The wife in this case relies upon s 79A(1)(a) and s 79A(1A) of the Act which requires the Court to be satisfied that:
(1)(a) there has been a miscarriage of justice by reason of fraud, duress, suppression of evidence (including failure to disclose relevant information), the giving of false evidence or any other circumstance; or
…

(1A) A court may, on application by a person affected by an order made by a court under section 79 in property settlement proceedings, and with the consent of all the parties to the proceedings in which the order was made, vary the order or set the order aside and, if it considers appropriate, make another order under section 79 in substitution for the order so set aside.

The High Court recently considered the concepts of duress, undue influence and unconscionable conduct in Thorne v Kennedy (2017) 350 ALR 1 (“Thorne v Kennedy”). Although Thorne v Kennedy was concerned with the enforcement of financial agreements entered into by the parties both prior to and following a marriage it is well settled as confirmed by Kent J in the recent Full Court decision of Blackwell v Scott (2017) 56 Fam LR 474 “...that s79A (and by necessary inference s90SN) is a remedial section which should be construed liberally to effect its intended purpose of achieving justice and equity”.. Section 79A(1)(a) not limited to duress the principles considered by the High Court in Thorne v Kennedy are relevant to the matters I must determine. It was in these circumstances that counsel also addressed me in relation to the equitable concepts of both undue influence and unconscionable conduct.

Duress

In Thorne v Kennedy the High Court did not challenge the position in the New South Wales Court of Appeal judgment in Australia & New Zealand Banking Group v Karam (2005) 64 NSWLR 149, whereby it was indicated that a person’s conduct could only amount to duress if there was threatened or actual unlawful conduct. I am not satisfied that the husband’s conduct was unlawful so as to be characterised as duress.
Although counsel for the wife initially focused her submissions upon the wife having been under duress when she consented to the orders, in my view the circumstances of this case do not readily meet the test of duress.

Undue Influence

The defining characteristic of undue influence is a lack of free will. As Kiefel CJ, Bell, Gageler, Keane and Edelman JJ observed in Thorne v Kennedy at paragraph 30 the concept of undue influence has been difficult to define and that:
One reason for the difficulty of defining undue influence is that the label “undue influence” has been used to mean different things. It has been used to include abuse of confidence, misrepresentation, and the pressure which amounts to common law duress. Each of those concepts is better seen as distinct. Nevertheless, the boundaries, particularly between undue influence and duress, are blurred. One reason why there is no clear distinction is that undue influence can arise from widely different sources, one of which is excessive pressure. Importantly, however, since pressure is only one of the many sources for the influence that one person can have over another, it is not necessary that the pressure which contributes to a conclusion of undue influence be characterised as illegitimate or improper
Their Honours said at paragraph 32 as follows:
…consideration of the extent to which the person was constrained in assessing alternatives and deciding between them. Pressure can deprive a person of free choice in this sense where it causes the person substantially to subordinate his or her will to that of the other party
And at paragraph 34 their Honours considered the ways in which a court can assess whether there has been undue influence. One option being to look at the direct evidence of the parties and the circumstances of the transaction, in this case the consent orders. There may also be a presumption of undue influence, where it can be said that a party was not exercising free will if :
…(i) the person is proved to be in a particular relationship, and (ii) the transaction is one, commonly involving a “substantial benefit” to another, which cannot be explained by “ordinary motives”, or “is not readily explicable by the relationship of the parties”.
Their Honours then referred to the particular classes of relationships that might give rise to that presumption. Although the relationship in this case is not one of those identified at paragraph 34, their Honours also referred to other circumstances that might give rise to a presumption of undue influence as follows:
…proof that the history of the particular relationship involved one party occupying a similar position of ascendency or influence, and the other a corresponding position of dependency or trust. In either case, the presumption is rebuttable by the other party proving that the particular transaction or transfer, in its particular circumstances, was nevertheless the result of the weaker party’s free will.
Although I am satisfied on the balance of probabilities that in this case given the circumstances of their marriage generally and the particular circumstances at the time the orders were made the husband occupied a position of ascendancy over the wife I am not satisfied that she was as a consequence so constrained in assessing her choices and alternatives and deciding between them that it could be said that her will was overborne.
As Gordon J said in Thorne v Kennedy at paragraph 107:
…the fact that Ms Thorne’s options were narrow, even eliminated, is not to the point. The paucity of options is relevant to whether, for the purposes of the doctrine of unconscionable conduct, Ms Thorne was suffering from a special disability or disadvantage of which Mr Kennedy unconscientiously took advantage. But it says nothing about her will. It cannot be said that her entry into each agreement was the outcome of “such an actual influence over the mind” of Ms Thorne that it cannot be considered her free act. The only sense in which it can be said that Ms Thorne was not “free” was that circumstances (including Mr Kennedy’s conduct) had conspired to limit the outcomes that she could realistically obtain by exercising her decision-making capacity. As to that, equity does not aspire to resolve philosophical questions about whether it is meaningful to speak of “free will” when one’s zone of autonomy has been bounded.

Similarly in this case, whilst I am satisfied that the wife was emotionally and psychologically vulnerable, financially dependent upon the husband, with limited options available to her and notwithstanding the husband’s position of ascendancy over her this is not the same thing as having her will subordinated to that of the husband such that she was not “free” to consent to the orders. In all of the circumstances I am not satisfied on the balance of probabilities that the orders should be set aside on the grounds of the husband’s undue influence upon the wife.

Unconscionable Conduct

The final vitiating factor that the High Court considered in Thorne v Kennedy was unconscionable conduct. At paragraph 38, the plurality said as follows:
A conclusion of unconscionable conduct requires the innocent party to be subject to a special disadvantage “which seriously affects the ability of the innocent party to make a judgment as to [the innocent party’s] own best interests”. The other party must also unconscientiously take advantage of that special disadvantage. This has been variously described as requiring “victimisation”, “unconscientious conduct”, or “exploitation”. Before there can be a finding of unconscientious taking of advantage, it is also generally necessary that the other party knew or ought to have known of the existence and effect of the special disadvantage
Their Honours referred to the comments made by Mason J in Commercial Bank of Australia Ltd v Amadio (1983) 46 ALR 402, who helpfully distinguished unconscionable conduct from undue influence. Mason J at 412 stated:
In the latter the will of the innocent party is not independent and voluntary because it is overborne. In the former the will of the innocent party, even if independent and voluntary, is the result of the disadvantageous position in which he is placed and of the other party unconscientiously taking advantage of that position.
I am satisfied that the wife in this case was subject to a special disadvantage when she consented to the final property orders. In my view the circumstances she found herself in overwhelmingly support this conclusion. Even on the husband’s case she had had long standing psychiatric issues which had seen her hospitalised on three occasions, including a two month period a matter of months before she consented to the final property orders in 2010. Both the wife and the twins had health issues following their premature birth, the twins spending 100 days in the neonatal intensive care unit and the wife having a womb infection, severe gastroenteritis and mastitis, requiring a tonsillectomy and being a psychiatric inpatient at P Hospital for two months. Both the husband and wife agree that when the wife was discharged from P Hospital she had nowhere to live, had no income and was financially dependent upon the husband who I have found was financially controlling. The wife was also estranged from her family. I have also found that the husband assaulted the wife in September 2009 immediately prior to the twins’ discharge from hospital and she had obtained an interim Intervention Order against him which required him to vacate the family home.
It was during that period and whilst still an inpatient that the wife consented to final parenting orders which provided for the children to live with the husband and spend time with her as agreed. What this meant was that even though as I have found to be the case the wife resumed the care of the children when she returned to the former matrimonial home in the event that she and the husband separated he had the benefit of and could, as in fact he did in 2017, seek to rely upon those final parenting orders. It is also consistent with the wife’s evidence when she was cross-examined about not having told her solicitor that the husband was putting pressure on her to consent to final property orders that the husband would threaten to take the children away from her if she left or talked about his abuse. The wife also said that she “just wanted the legalities over with and I wanted to move on as a family”. For the reasons previously discussed I accept the wife’s evidence.
On the same day as the wife consented to the final parenting orders she also signed heads of agreement with respect to the financial aspects of the case. Although the final property orders which were ultimately made were not the same as that heads of agreement, if anything the terms of the orders were arguably even less favourable to the wife leaving her with less property albeit making provision for her maintenance in circumstances where there is no dispute that the wife was living in the former matrimonial home and financially dependent upon the husband and there was no evidence to suggest that the wife was likely in these circumstances to require spousal maintenance in the foreseeable future.
As previously referred to the husband filed a Financial Statement on 16 October 2009 shortly after the proceedings were commenced. According to the husband’s financial statement which he filed on 16 October 2009 when the proceedings commenced he was in receipt of dividend income of $819 per week. This is consistent with what his solicitor told Federal Magistrate Hughes (as she then was) at the hearing in June 2010. However although the husband’s solicitor told Her Honour that the wife was also receiving $819 per week according it is clear from her Financial Statement filed on 2 October 2009 and the husband’s Financial Statement that this was not the case.
In Part B of his Financial Statement the husband deposed to having personal expenditure of $814 per week, in Annexure B he disclosed expenditure of $873 per week which included rent for the family home, from which the husband was excluded following separation at the time he filed his Financial Statement, of $250 which he said was paid into the X Bank mortgage account, outgoings including rates, insurance, utilities and upkeep also according to the husband’s Financial Statement paid into the X Bank mortgage account, car payments of $257 per week, health insurance of $57 per week, swimming lessons for the eldest child at a cost of $12 per week, Foxtel $20 per week and landline, mobile phone and internet of approximately $20 to $30 per week paid for by W Pty Ltd. At Part H of the Financial Statement he said that he had made the payments in Annexure B for the wife’s benefit. Annexure B clearly stated that he paid these amounts out of his dividends of $819 per week. Although the wife set out in some detail the weekly expenditure it is common ground that although she had access to a credit card the husband controlled the family finances. Clearly based upon the husband’s Financial Statement whilst the wife may have received the benefit of the payment of these expenses she was not as the husband’s solicitor told her Honour in 2010 receiving distributions of $819 per week. It is also reasonable to infer based upon this evidence that the parties must have had sources of income or other resources from which they met the balance of the family’s expenditure.
The husband also deposed in Part B of his Financial Statement to owning property with a total value of $11,824 although it is impossible to understand how he arrived at that figure based upon the balance of that Financial Statement. In Part I of that Statement he deposed to owning real estate with a value of $424,534.34 details of which were set out in Annexure A to his Financial Statement. He also deposed to having $1,000 in a Commonwealth Bank account in his name and $34 in a Westpac joint account utilised by the wife. There was a further Westpac joint account which he said had a balance of $790. He attributed a value of $10,000 to household contents. The husband also disclosed superannuation entitlements in the Imbardelli Superannuation Fund of approximately $100,000.
I am satisfied that the husband was well aware of the special disadvantage the wife was under. His evidence was replete with references to her mental health issues. In fact it was part of his case that the Court could not rely upon the wife’s recollection of events following her discharge from P Hospital because of her mental health issues. The husband also conceded that the wife was financially dependent upon him and that it would be difficult for her because of her mental health issues to obtain her own accommodation.
Although counsel for the husband placed significant emphasis in his submissions on the notes made by Dr N of his consultation with the wife on 29 June 2010 in which he described the wife as “mood pretty good & stable” and described the wife as “doing well”, in my view this goes to the wife’s mental competence rather than addressing the question of what the wife submits was the husband’s unconscionable conduct. The test is whether or not the wife was subject to a special disadvantage not whether she had capacity to consent to the orders. The fact that she may have had the capacity to make a decision would not alter the fact that as I have found she was subject to a special disadvantage.
Counsel for the husband also relied upon an email sent by the wife to her then solicitor on 21 June 2010 requesting amendments to the heads of agreement and submitted that the wife had not established and the Court could not find that she had not been given proper legal advice. I do not accept as submitted by counsel for the husband that it is for the wife to prove that she was not given proper legal advice. That is not the issue in this case. In Thorne v Kennedy it was not in dispute that the wife had not only received legal advice but that that advice was from an accredited family law specialist, who had advised her that she should not sign the binding financial agreement. The wife in that case signed both agreements notwithstanding that advice. The issue in this case is whether the wife was at a special disadvantage when she consented to the final property orders, whether the husband was aware of that special disadvantage and whether it was as Gordon J said at paragraph 82 unconscientious for the husband “...to procure or accept her assent” notwithstanding that she may have had legal advice.
Pursuant to the final property orders the wife relinquished any interest in W Pty Ltd, V Pty Ltd, K Pty Ltd as well as the Imbardelli Family Trust and the Imbardelli Superannuation Fund. The wife also relinquished any interest in the 11 properties owned by the various entities including the former matrimonial home in which she and the husband and the children of the marriage were living. Paragraph 3 of the final orders required the company W Pty Ltd to transfer motor vehicle 1 to her and paragraph 7 was, as noted by Federal Magistrate Hughes (as she then was), an order for spousal maintenance, in circumstances where unbeknown to her Honour the parties were living in the former matrimonial home and the wife was financially dependent upon the husband.
Whilst there is reference in the submissions made to Federal Magistrate Hughes (as she then was) to the property being primarily comprised of assets brought into the marriage by the husband. Reference was also made to the wife’s “considerable” needs. In circumstances where the wife’s only entitlement to property pursuant to the final property orders was the transfer into her name of motor vehicle 1, it is in my view a reasonable inference to draw., albeit that it is not necessary to establish that the orders were wrong, that the husband did take unconscientious advantage of the wife’s special disadvantage and that it was not in her best interests to consent to the orders. .
As referred to by Kitto J in Blomley v Ryan (1956) 99 CLR 362, if it is established that one party was under a special disadvantage and that the other party unconscientiously took advantage of that special disadvantage “… the burden of proving that the transaction was nevertheless fair would lie upon the plaintiff” in that case the party seeking to enforce the contract as against the party with a special disadvantage. The husband in this case has not done so.
I am satisfied that there was in this case a special disadvantage. The husband was aware of that disadvantage and it was unconscientious of him to procure or accept the consent of the wife to the orders in those circumstances. I am satisfied that there has been a miscarriage of justice and on this basis it would be inequitable for him to now retain the benefit of the orders made in those circumstances.
I am also satisfied that the orders were unjustly obtained in circumstances where Federal Magistrate Hughes (as she then was) was unaware that the parties were at the very least living in the same premises, that the wife was receiving $819 per week from the family trust and had the benefit of extensive and ongoing spousal maintenance orders “..indefinite really, until she’s well enough to really support herself.” This was clearly not the case. It is difficult to see how in these circumstances her Honour could have determined whether it was just and equitable to make orders or whether the orders themselves were just and equitable.
These parties having reconciled lived together for over seven years which is about the same length of time they lived together prior to their first separation in September 2009. The total length of their relationship is approximately 15 years less a period of approximately four to five months following the incident and their separation in September 2009. Even if the final orders were just and equitable at the time they were made which I am not satisfied is the case, not setting aside those orders would leave the wife with no legal recourse having regard to her contributions as a homemaker and parent for the last seven years of that relationship. In my view having regard to all of the circumstances of this case justice requires that I exercise my discretion to set aside the final orders made 30 June 2010.

Implied Consent

Counsel for the wife also submitted that in circumstances where the husband and wife had reconciled, the Court could infer that there was implied consent to the final property orders being set aside. Although I have already found that the orders should be set aside on the basis of unconscionable conduct, for completeness I propose to consider this second limb of the wife’s case. Counsel for the wife referred to the decision of the Full Court in In the Marriage of McCabe (1995) 19 Fam LR 579 at 582 where Fogarty, Finn and Kay JJ stated:
In cases of this nature conclusions about intention which should be attributed to the parties will depend upon the particular circumstances of each case. That material would not necessarily be confined to the initial decision to reconcile or, as in this case, to write to the court. Their intention may crystallise into a more precise form as time progresses and as the parties’ reconciliation continues and they conduct their lives together, including their financial affairs, so that it becomes inconsistent with any other conclusion.
In O’Hurley & O’Hurley [2008] FamCAFC 57, Coleman J at paragraph 67 similarly emphasised the significance of circumstantial evidence in determining whether or not there was implied consent:
The case thus fell to be determined on the basis of whether the circumstantial evidence established as a matter of inference or conclusion that, despite the absence of any express agreement or even consideration of the consequences of the resumption of cohabitation so far as the 2002 orders were concerned, the parties nevertheless intended to no longer be bound by the terms of those orders.
In Waterman & Waterman [2017] FamCAFC 23 (“Waterman”), at paragraph 66, Murphy J stated that reconciliation alone is not sufficient to find that the parties had impliedly consented to set aside the orders, but that:
… any such finding is made by reference to the miscellany of circumstances pertaining to the parties’ relationship by which the relevant intention is to be inferred.
In other cases, the Court has referred to notions of injustice as a result of the parties’ actions after orders were made. In Sommerville & Sommerville (1999) 27 Fam LR 233 Nicholson CJ stated at 252-253:
…the consequences of any other finding leave the wife as the victim of a considerable injustice for the reasons pointed out by Fogarty J in Drew's case. The injustice of course is associated with her having applied the proceeds of the property settlement for joint purposes when the reconciliation occurred and being left without a remedy despite her contributions to the marriage following reconciliation. This is not an injustice associated with a making of the original order, but an injustice associated with what occurred thereafter.
In the recent Full Court decision of Waterman, Bryant CJ similarly referred to notions of justice and made the point at paragraph 102 that “s 79A(1A) does not include as part of its requirement that there be a miscarriage of justice.” This can be contrasted to the requirement in s 79A(1)(a) of the Act. However, Bryant CJ did make remarks as to the inability of a party to access a remedy as a factor the Court should have regard to at paragraphs 103 to 104:
[103] However, the inability of the wife, after a long period of time and making of contributions, to have access to a remedy does not need to present itself as a miscarriage of justice. It is rather one of the circumstances to which the Court should have regard, in my view, when considering whether consent can be implied. In my view, the Court is required to consider all of the circumstances of the behaviour of the parties which might reasonably lead it to imply consent…
[104] It would be, in my view, unreasonable or unconscionable for the Court not to take account of the fact that without any remaining remedy, the contributions which both parties made, and particularly the wife, with the agreement of each of them during their cohabitation, would be unrecognised. It is not, in my view, a matter of miscarriage of justice. It is a relevant factor going to the issue of implied consent…

Discussion

Counsel for the husband submitted that the evidence in the case does not support a finding that the parties reconciled prior to the final property orders being made, or at all. I have found to the contrary. Significantly for the purposes of the matters I must determine it is not necessary for any reconciliation to have taken place prior to the orders having been made. Counsel for the husband further submitted that even if the Court were to be satisfied that the parties had reconciled the evidence would not support a finding that they no longer intended to be bound by the orders. I reject that submission.
Although in support of his submissions with respect to this issue counsel for the husband relied upon the fact that the parties had kept their finances separate, I have already found that this is meaningless in circumstances where both prior to the first separation and following the wife’s discharge from P Hospital and return to the former matrimonial home the husband was the breadwinner and controlled their finances and the wife was the homemaker and financially dependent upon the husband. It would do an injustice to the wife in my view if the husband could rely upon the wife’s inferior position in the marriage to support his case that there was no implied consent. I also reject the husband’s submission that the financial support he provided to the wife was for the purposes of giving effect to the orders.
I am satisfied that the parties resumed a life together after that first separation and importantly the wife resumed her role as primary caregiver and homemaker with the husband continuing his role as the breadwinner, each contributing to the marriage in their respective roles. Although I have already found that the orders should be set aside on the basis that there has been a miscarriage of justice, I am also satisfied that it would be both unreasonable and unconscionable if the wife’s contributions for the next seven and a half years after that first separation went unrecognised. It is in my view reasonable to infer that she made those contributions based upon either the husband’s express intention not to rely upon the orders or based upon his conduct, his implied intention.

I would also set the orders aside on this basis.
Having determined the interim spousal maintenance and the wife’s application pursuant to 79A of the Act I am satisfied that it would not be appropriate for me to determine the wife’s application for property settlement and I propose to recuse myself from these proceedings.
In circumstances where I have determined that the orders should be set aside I propose to order that the matter be listed in the Registrar’s Duty List for further directions with a view to the matter being listed for a final hearing as soon as practicable.

I certify that the preceding one hundred and two (102) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Macmillan delivered on 24 October 2018.

Associate:

Date: 24 October 2018

[2018] FamCA 865

24 October 2018

Key Legal Topics

Areas of Law

Family Law

Civil Procedure

Equity & Trusts

Legal Concepts

Res Judicata

Remedies

Consent

Procedural Fairness