FEDERAL CIRCUIT COURT OF AUSTRALIA
Ismael & Ismael [2021] FCCA 1581
File number(s): PAC 2242 of 2019 Judgment of: JUDGE BECKHOUSE Date of judgment: 21 July 2021 Catchwords: FAMILY LAW – PROPERTY – binding financial agreement –where the Wife seeks to declare not binding or set aside a financial agreement between the parties – whether the Wife was provided with legal advice pursuant to s 90G(1)(b) of the Family Law Act – whether the financial agreement should be set aside on the basis of unconscionable conduct pursuant to s 90K(1)(b) and 90K(1)(e) of the Act and in accordance with Thorne v Kennedy [2017] HCA 49 –where the Wife was provided with necessary legal advice – binding financial agreement valid – where no unconscionable conduct by the Husband- financial agreement not voidable. Legislation: Family Law Act 1975 (Cth) ss 90B, 90G, 90K, 90KA, 117 Cases cited: Abrum & Abrum [2013] FamCA 897
Australian Securities and Investment Commission v Kobelt [2019] HCA 18
Beroni & Corelli [2021] FamCAFC 9
Commercial Bank of Australia Ltd v Amadio [1983] HCA 14
Daily & Daily [2020] FamCA 486
Hoult v Hoult [2013] FamCAFC 109
Kakavas v Crown Melbourne Limited [2013] HCA 25
Kaimal & Kaimal [2020] FamCA 971
Parker & Parker [2012] FamCAFC 33
Pascot & Pascot [2011] FamCA 945
Scott & Scott (No 3) [2019] FamCA 936
Number of paragraphs: 185 Date of last submission/s: 4 May 2021 Date of hearing: 4 March 2021 Place: Parramatta Solicitor for the Applicant: Mr Killalea of Kazi & Associates Solicitors & Public Notary Counsel for the Respondent: Ms Conte-Mills Solicitor for the Respondent: Harb Lawyers ORDERS
PAC 2242 of 2019 BETWEEN: MS ISMAEL
Applicant
AND: MR ISMAEL
Respondent
ORDER MADE BY:
JUDGE BECKHOUSE
DATE OF ORDER:
21 JULY 2021
THE COURT DECLARES THAT:
1.The financial agreement entered into by the parties, dated 2011, is a binding financial agreement within the meaning of the Family Law Act 1975 (Cth).
THE COURT ORDERS THAT:
2.Pursuant to s 90G of the Family Law Act 1975 (Cth), the Wife’s application to set aside the financial agreement dated 2011 be dismissed.
3.All other applications be dismissed.
4.Leave is granted to the Husband to seek a relisting of the matter within 21 days should he wish to pursue an order for costs.
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment under the pseudonym Ismael & Ismael is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
INTRODUCTION
This is an application brought by the Applicant Wife, Ms Ismael (“the Wife”) seeking a declaration that the financial agreement entered into by the parties dated 2011 be set aside (“the financial agreement”). The Respondent Husband, Mr Ismael (“the Husband”) seeks an order that the Wife’s application be dismissed and that she…
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CaseChat Overview and Summary
In *Ismael & Ismael*, Beckhouse J of the Federal Circuit and Family Court of Australia considered an application by the Wife seeking to set aside a financial agreement made in 2011. The Husband sought dismissal of the Wife's application and costs. The Wife alleged that she was the victim of domestic and sexual violence from the Husband from her arrival in Australia in 2014 until their separation in 2019, though these allegations were not tested at the hearing.
The primary legal issue before the court was whether the financial agreement dated 2011 was a binding financial agreement within the meaning of the *Family Law Act 1975* (Cth), specifically whether the requirements of section 90G(1) of the Act had been met. The Wife contended that she had not been provided with independent legal advice as required by section 90G(1)(b).
Beckhouse J found that the Husband had discharged the burden of proving the binding nature of the financial agreement. The court was satisfied that the mandatory requirements of section 90G(1) had been met, including the provision of independent legal advice to the Wife, as evidenced by the signed statement by her legal practitioner annexed to the agreement. While acknowledging certain circumstances, such as the Husband paying the Wife's legal costs and the presence of the Husband's friends during meetings, the court determined that these factors did not demonstrate a lack of independence in the advice received by the Wife. Consequently, the court declared the financial agreement to be binding and dismissed the Wife's application to set it aside.
The primary legal issue before the court was whether the financial agreement dated 2011 was a binding financial agreement within the meaning of the *Family Law Act 1975* (Cth), specifically whether the requirements of section 90G(1) of the Act had been met. The Wife contended that she had not been provided with independent legal advice as required by section 90G(1)(b).
Beckhouse J found that the Husband had discharged the burden of proving the binding nature of the financial agreement. The court was satisfied that the mandatory requirements of section 90G(1) had been met, including the provision of independent legal advice to the Wife, as evidenced by the signed statement by her legal practitioner annexed to the agreement. While acknowledging certain circumstances, such as the Husband paying the Wife's legal costs and the presence of the Husband's friends during meetings, the court determined that these factors did not demonstrate a lack of independence in the advice received by the Wife. Consequently, the court declared the financial agreement to be binding and dismissed the Wife's application to set it aside.
Orders
Orders of the court
PAC 2242 of 2019
BETWEEN:
MS ISMAEL
Applicant
AND:
MR ISMAEL
Respondent
ORDER MADE BY:
JUDGE BECKHOUSE
DATE OF ORDER:
21 JULY 2021
THE COURT DECLARES THAT:
1. The financial agreement entered into by the parties, dated 2011, is a binding financial agreement within the meaning of the Family Law Act 1975 (Cth).
THE COURT ORDERS THAT:
2. Pursuant to s 90G of the Family Law Act 1975 (Cth), the Wife’s application to set aside the financial agreement dated 2011 be dismissed.
3. All other applications be dismissed.
4. Leave is granted to the Husband to seek a relisting of the matter within 21 days should he wish to pursue an order for costs.
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
Background
Background to the litigation
This is an application brought by the Applicant Wife, Ms Ismael (“the Wife”) seeking a declaration that the financial agreement entered into by the parties dated 2011 be set aside (“the financial agreement”). The Respondent Husband, Mr Ismael (“the Husband”) seeks an order that the Wife’s application be dismissed and that she pay his costs. BACKGROUND The Wife was born in 1976 in Country B. The Husband was born in 1958. The Husband and Wife had both previously been married. The Husband has two children from his first marriage: Ms C born in 1995 and Ms D born in 1996. The Wife has three children from her first marriage: twin girls born in 1997 and a boy, Mr E born in 2002. The parties met in Country B in around 2010. In 2011 the Husband arranged for the Wife to visit him in Australia. While she was in Australia they became engaged. The Wife attended on a solicitor, Mr F, to receive legal advice about the financial agreement in 2011. Following further negotiations, the parties signed the financial agreement in 2011. The Wife returned to Country B alone in 2011. The parties were married in Country B in 2011. The Wife remained in Country B after the marriage before immigrating to Australia in 2014 with her son, Mr E. The Wife alleges that from her arrival in Australia in 2014 until the separation five years later, she was the victim of domestic and sexual violence at the hands of the Husband. She annexes to her affidavit a range of material that tends to corroborate her allegations including notes from her medical consultations, notes from a treating psychologist, and a letter from domestic violence counselling services. These allegations were not tested at the hearing. The parties separated on 26 April 2019.PROCEDURAL HISTORY The Wife commenced proceedings on 16 May 2019 seeking Orders under section 79A of the Family Law Act 1975 (Cth) (“the Act”) for an adjustment of interests in property and spousal maintenance. The matter was listed before Judge Harman on 22 May 2019 and directions were made for the filing of material. The following notation was made:6. Note: That the Respondent asserts that the parties have entered into a Binding Financial agreement in the nature of a prenuptial agreement which would, unless that agreement is successfully impeached, preclude the Court’s exercise of jurisdiction at least with respect to property adjustment. The matter was adjourned for further mention and directions on 17 October 2019 following a conference with a Registrar. On that occasion the Court noted that a copy of the binding financial agreement had been produced. Some additional notations and orders were made:3. Note: It is now clear that the wife seeks to proceed on the basis of an Application pursuant to section 90UM of the Family Law Act 1975 (Cth) to set aside the agreement on the basis of fraud or other irregularity as to the agreement noting the wife’s allegation that she is not and was not fluent in the English language and the agreement was not explained to her or not explained to her in a language she was capable of understanding.4. Note: The wife’s legal representatives have obtained from the solicitor who purported to provide a certificate to the wife under s 90G of the Family Law Act 1975 (Cth) the entirety of that solicitor’s file, which, in light of the grounds upon which the wife’s proceeds with her application and, the inherent waiver of legal professional privilege represented thereby, is discoverable.5. The solicitors for the wife shall, within 7 days, cause notice of these proceedings to be provided to each of Mr F solicitor (being the solicitor who signed a s 90G certificate) and Law Cover so that each of those persons or entities might, if they so desire, seek to intervene in proceedings or seek other orders or relief as may be considered appropriate. 6. Pursuant to s 121 of the Family Law Act 1975 (Cth) each of the parties shall be entitled to provide to Law Cover copies of all or any documents filed in these proceedings to enable an assessment to be made as to whether intervention is to occur or any other relief sought.
Evidence
Evidence Before The Court
The circumstances leading to the execution of the financial agreement are central. The parties gave different versions of what took place.The Husband’s Evidence The Husband says he began contemplating marriage following his mother’s death. After meeting the Wife in Country B in 2010 they remained in contact. He says he admired the Wife because “she was independent, capable and business-minded like myself. I thought she would get along well with my daughters in Australia and would be able to communicate as they could not speak Country B language fluently.”[8] [8] Affidavit of Mr Ismael affirmed 25 August 2020, paragraph 10 (“Husband’s Affidavit”). The parties discussed marriage during their telephone courtship and the Husband consulted with friends about the suitability of Ms Ismael as a wife. He says that he asked her to come to Australia prior to marriage because he “told her that she would have to first travel to Australia and meet my children, family and friends to see if they would all get along and she agreed”.[9] [9] Ibid paragraph 12. The Husband said that his solicitor friend suggested that he enter into a financial agreement before marriage,[10] and stated the purpose of the financial agreement was to “[protect] my hard work and then my children, my family”.[11][10] Ibid paragraph 20.[11] Transcript (n 6) p.52 line 11. He gave evidence that he required the Wife to enter into a financial agreement with him prior to marriage and says he was very clear with her about this. He said they discussed it in Australia and “had many discussion[s] in my business.”[12] He also said in cross-examination “I took her everywhere. I told her everything and then after this she was appointed a solicitor to represent her.”[13] While the Husband’s position about entering into the financial agreement was clear, he says he did not “pressure” her to sign the financial agreement.[14][12] Transcript (n 6) p.49 lines 37-38.[13] Transcript (n 6) p.50 lines 34-35.[14] Transcript (n 6) p.54 lines 9-17. While the Wife was in Australia she stayed with the Husband’s nephew.[15] The Husband often drove her around each day. These outings consisted of meetings with his friends and family. She spent time with a close friend of the Husband, Mr H and his Wife. Mr H’s wife did not speak Country B Language but he says the wife communicated with her in English.[16] [15] Transcript (n 6) p.51 lines 19-20.[16] Husband’s Affidavit (n 8) paragraph 14. The Husband asked his lawyer Claude Harb to draft the financial agreement. On hearing that the Wife required independent advice, he asked Mr Harb to find an independent solicitor to advise her. Ultimately Mr F, solicitor was retained for this purpose. The Husband accepts that he paid the Wife’s legal costs indirectly. He says that she had no money at all and that he had to pay for “everything” including her visa to Australia, flights and pocket money.[17][17] Transcript (n 6) p.49 lines 9-11.
Decision
Reasons for decision
The Husband argues that there is a complete lack of evidence before the Court to support the Wife’s assertion that Mr F failed to provide independent legal advice to the Wife and that he failed to comply with s 90G(1)(b) of the Act.Conclusions on Ground 1 The Husband seeks to uphold the financial agreement, and therefore assumes the primary burden of proving the binding nature of the financial agreement.[53] [53]See Scott & Scott (No 3) [2019] FamCA 936 at [36]. There is no dispute that:(a)the financial agreement was signed by both parties;(b)there is a signed statement under s 90G(1)(c) of the Act provided by both Mr F (for the Wife) and Claude Harb (for the Husband) stating advice was provided;(c)a copy of the signed financial agreement was given to the Wife and her legal representative retained a copy; (d)the financial agreement has not been terminated or set aside. The Wife submits that the mandatory requirements stipulated by s 90G(1) of the Act had not been met in that she was not provided with independent legal advice. At Clause 7 of the financial agreement, each party acknowledged that they had received separate independent legal advice from a legal practitioner as to the effect of the financial agreement on the rights of that party, and the advantages and disadvantages of that party in making the agreement. Having regard to the financial agreement, and the signed statement by the legal practitioners annexed to the agreement, I am satisfied that the requirements of s.90G(1)(b) were met. On that basis I am satisfied that the Husband has discharged the burden of proving compliance with the Act. Based on this finding and per Scott & Scott (No 3) [2019] FamCA 936 (“Scott”) at [39], the evidentiary burden shifts to the Wife to demonstrate some deficiency in the nature of the advice that she received. It seems likely that Mr Harb referred the Wife to Mr F, perhaps because it was convenient and they worked in proximity to each other. The Wife had two meetings with Mr F. Both the file and invoice were in the Wife’s name. The firm gathered her full details including obtaining a copy of her passport and a mobile telephone number to contact her on. I accept that the Wife was not given any choice as to her legal adviser or the presence of support people. I also note that the Husband agreed that he paid the Wife’s legal costs (at least indirectly). However these matters on their own do not demonstrate that the advice the Wife received lacked independence. It is the Wife’s case that the support people who attended with her were not independent because they were close friends of the Husband. The Husband says they were there to support the Wife. Although during cross-examination the Wife contradicted this: [54][COUNSEL FOR THE HUSBAND]: There was a provision – do you remember – in the draft about your jewellery and you were not happy with that provision. You asked Mr F [sic] to remove it?[THE WIFE]: I think that time – he – Mr Ismael’s friends work on behalf of me because I did not talk directly with him much; only the – the signed things.[54]Transcript (n 6) p.31 lines 25-28.
Ratio Decidendi
Legal Principle Established
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