Johanson & Johanson
[2021] FamCA 609
•19 August 2021
FAMILY COURT OF AUSTRALIA
Johanson & Johanson [2021] FamCA 609
File number(s): BRC 6694 of 2017 Judgment of: BAUMANN J Date of judgment: 19 August 2021 Catchwords: FAMILY LAW – FINANCIAL AGREEMENT – Where the wife seeks to enforce a financial agreement entered into between the parties – Where the husband opposes enforcement and asserts the financial agreement is not binding as, in particular, the requirements of s 90G(1)(b) and (c) of the Act were not satisfied – Husband’s application dismissed – Financial agreement found to be binding upon the parties Legislation: Family Law Act 1975 (Cth), s 90G Cases cited: Johanson & Johanson [2018] FamCA 355
Hoult & Hoult (2013) FLC 93-546
Logan & Logan (2013) FLC 93-555
Number of paragraphs: 34 Date of last submission/s: 1 May 2020 Date of hearing: 22 November 2019 and 4 February 2020 Place: Brisbane Counsel for the Applicant: Mr J Linklater-Steele Solicitor for the Applicant: Naughton McCarthy Family Lawyers Counsel for the Respondent: Ms M McLennan (4 February 2020 only) Solicitor for the Respondent: Morgan Mac Lawyers ORDERS
BRC 6694 of 2017 BETWEEN: MS JOHANSON
Applicant
AND: MR JOHANSON
Respondent
ORDER MADE BY:
BAUMANN J
DATE OF ORDER:
19 AUGUST 2021
THE COURT ORDERS:
1.That the husband’s application that the financial agreement entered into between the parties dated 22 January 2014 is not binding, be dismissed.
2.That the financial agreement entered into between the parties dated 22 January 2014 be declared binding upon the parties.
3.That these proceedings be adjourned for Case Management Hearing at 9.30am on 6 September 2021 in the Family Court of Australia at Brisbane, to make directions as to how the wife’s substantive application for enforcement should now be progressed.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to 17.02 Family Law Rules 2004 (Cth).
IT IS NOTED that publication of this judgment by this Court under the pseudonym Johanson & Johanson has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
BAUMANN J:
INTRODUCTION
The Applicant, Ms Johanson (hereafter called “the wife), seeks to enforce a financial agreement dated 22 January 2014, entered into with Mr Johanson (hereafter called “the husband”) after the parties had separated.
Although the husband has remarried, for the purpose of these Reasons I refer to these parties as husband and wife.
The husband opposed enforcement, and asserts the agreement is not binding as, in particular, the requirements of s 90G(1)(b) and (c) of the Family Law Act 1975 (Cth) (“the Act”) were not satisfied. An earlier Application by the husband seeking a declaration that the parties, by their conduct, had abandoned the financial agreement, was dismissed by Cleary J on 23 May 2018 for Reasons then published (see Johanson & Johanson [2018] FamCA 355).
The issue of the manner in which the sum the wife claims is owed to her (estimated at 4 February 2020 to be $361,765.93 plus interest of $38,688.62) could be enforced has not yet been the subject of further submissions, noting some brief written submissions have been filed. Rather, evidence was received on 22 November 2019 and 4 February 2020 in respect of the husband’s claim the financial agreement is not binding. That evidence was followed by written submissions by Ms McLennan (Counsel for the husband) on 18 February 2020 and by Mr Linklater-Steele (Counsel for the wife) on 17 April 2020. Submissions in reply were filed on 1 May 2020, when the judgment was then reserved. The Court expresses its regret for the delay in providing these Reasons for Judgment.
BRIEF CONTEXTUAL HISTORY
The parties were married in 1989 and agree final separation occurred in 2013 – after a period of nearly 24 years. The parties (both born in 1962) were blessed with three children – Mr X, Mr Y and Mr Z who are all now adults.
As set out in more detail next, negotiations between the parties and subsequently their lawyers about the terms of the agreement began shortly after separation and both parties had engaged lawyers by May 2013 to assist them. The parties made their choice of lawyer individually.
The negotiations took place over nine months, culminating in the signing of the financial agreement dated 22 January 2014.
On 8 June 2014, the parties’ Divorce Order became absolute and the husband has since remarried to Ms B.
Under the terms of the financial agreement the husband was to maintain a life insurance policy, of which the wife was the beneficiary, however in November 2016 he ceased making premium payments, claiming in an email sent by Ms B on the husband’s behalf to his solicitor Mr N, that the policy was “unaffordable and unnecessary”. By April 2017 the husband had also ceased making the specified monthly spouse maintenance payment of $10,883, which ultimately resulted in the wife’s Initiating Application being filed on 3 July 2017. I have already referred to the earlier hearing on one discrete issue which (had the Court found in husband’s favour) may have brought these proceedings to finalisation.
THE AGREEMENT
It is appropriate to record some of the principal provisions in the agreement dated 22 January 2014 – noting again that its terms were complied with in all respects until at least November 2016. The provisions I note are:
(a)Recital C(a) provided the agreement was made pursuant to s 90C of the Act and was in relation to “division of the property of the parties following the breakdown of the marriage; AND the maintenance of Mr Johanson and Ms Johanson during the marriage and after divorce”;
(b)Recital C(e) provides an acknowledgement by both parties that “this Agreement will have the practical effect to operate in complete bar and discharge to any further application by either of them against the other in relation to Part VIII of the Family Law Act”;
(c)Recital D(c) says that the property, liabilities and financial resources of the parties “currently available for alteration of property interests between them are detailed in Schedule 2 of this Agreement”, with Schedule 2 setting out the following:
Assets
House at C Street, Suburb D
$1,350,000
Furniture and contents
To be divided
Motor vehicle 1
$25,000
Husband’s business
Nil
Liabilities
E Bank – home loan
$1,100,000
E Bank Visa card in Husband’s name A/C No. …76
$9,570
Commonwealth Bank of Australia Mastercard in Husband’s name A/C No. …91
$5,500
F Bank credit card in Husband’s name A/C No.
£5,729
Superannuation
Johanson Family Superannuation Fund
$738,849
G Super Fund
$160,689
(d)Recital E(b) is an acknowledgment by each party that before the agreement was signed by them, they were provided with “independent legal advice from their respective legal practitioners as to” the effect of the agreement on their rights and the advantages and disadvantages of making the agreement;
(e)The maintenance component at clause 4.2(a) of the agreement relevantly provides for the husband to pay the wife the sum of $130,000 per annum “in monthly instalments of $10,833 until he reaches the age of 64”. The husband will turn 64 in May 2026. This required repayment could be adjusted if the husband’s income, net of tax, was less than $260,000 for any financial year;
(f)Alteration of property interests is set out at clause 5 of the agreement, with the home at Suburb D to be sold and after payment of various specified disbursements, the balance of the nett proceeds were to be received by the wife. The parties were to retain other property as specified;
(g)By clause 5.2(l) of the agreement, the husband was to continue to pay premiums on a specified Income Protection Insurance component with J Insurance until his sixty-fourth birthday;
(h)By clause 5.2(o), the husband was to continue to pay the premiums on the specified J Insurance Life Insurance Policy in the wife’s name until his sixty-fourth birthday, with the cover not to drop below $1,000,000;
(i)By clause 5.2(p), the husband was to continue to pay on the specified J Insurance Trauma Insurance Policy in the wife’s name until his sixty-fourth birthday, with the cover not to drop below $500,000;
(j)By clause 5.2(s), the husband’s interest in the Johanson Family Superannuation Fund and G Super Fund was to be subject to a “superannuation split”, whereby 50% of the husband’s balance was to be received by the wife. Consequent upon that “split”; the wife was to resign as a member and officer of the SMSF; and
(k)Clause 8.7 of the agreement provides for the parties’ acknowledgment as to their understanding of the terms of the agreement, and at clause 8.7(h) the parties again mutually covenanted and acknowledged that “before this Agreement was signed by each, as stated in the Statement annexed to this Agreement, each was provided with independent legal advice by their respective solicitors”. The statement as to the giving of independent legal advice to the husband was signed by Mr N and confirmed by the husband on 22 January 2014. The statement as to the giving of independent legal advice to the wife was signed by Mr K and confirmed by the wife on 16 January 2014.
PRINCIPLES TO BE APPLIED
It is well settled that the onus of proof lies on the party who seeks to establish that a financial agreement is binding (Hoult & Hoult (2013) FLC 93-546). In this case the wife must establish the existence of the prescribed matters set out in s 90G of the Act and, of particular relevance in this case, s 90G(1)(b) and (c) which provides that:
(b)before signing the agreement, each spouse party was provided with independent legal advice from a legal practitioner about the effect of the agreement on the rights of that party and about the advantages and disadvantages, at the time that the advice was provided, to that party of making the agreement; and
(c)either before or after signing the agreement, each spouse party was provided with a signed statement by the legal practitioner stating that the advice referred to in paragraph (b) was provided to that party (whether or not the statement is annexed to the agreement);
It is important to note that, although often such advice is given at the time in writing, the Act does not prescribe advice to be given in writing.
However, as referred to at [44] and [45] by the Full Court (May, Thackray and Strickland JJ) in Logan & Logan (2013) FLC 93-555:
44.The Full Court in Hoult determined that the onus of proof lies on the party who is seeking to establish that a financial agreement is binding (see paragraph 60 of the reasons for judgment of Thackray J and paragraph 254 of the reasons for judgment of Strickland and Ainslie-Wallace JJ). Thus, that party must establish the existence of the prescribed matters including the provision of the requisite legal advice to both parties. In this case then it is the husband who bears this onus of proof.
45.Importantly though, Thackray J in Hoult (with the concurrence of Strickland and Ainslie-Wallace JJ) indicated (paragraph 62) that, “once the party seeking to rely upon the agreement produces in evidence the certificate signed by the other party’s solicitor, there is a forensic obligation on the other party to adduce evidence which would disprove, or at least throw into doubt, the inference or conclusion to be drawn from the certificate (especially when read with the recital in the agreement to the same effect)”. His Honour continued in paragraph 63:
This forensic obligation is properly conceptualised as the burden of introducing evidence and should not be confused with the burden of proof as a matter of law and pleading. For a discussion of the difference see Purkess v Crittenden (1965) 114 CLR 164 especially at 167-168 per Barwick CJ, Kitto and Taylor JJ and 170-171 per Windeyer J.
In this case the initial onus is on the wife, and it was open to her, to rely upon the certificate signed by Mr N (the husband’s solicitor) and for the Court to treat it “at least as prima facie evidence of compliance with the requirement to provide legal advice” and this can be “bolstered” by recitals in the agreement which might have the effect of confirming (and the parties acknowledging) that the requisite legal advice was given (Hoult and Logan).
In Hoult, at paragraph 101, it was explained that if the wife in this case satisfied the initial onus, the evidentiary burden then would pass to the husband to establish on the evidence that the presumption of fact that the requisite advice was given, has been displaced. Furthermore, at [279] of Hoult it was said:
279.It also must not be forgotten that, as Justice Thackray has correctly pointed out in paragraph 100 above, it was only necessary for the trial judge to be satisfied that the advice referred to in s 90G(1)(b) had been given, and the certificate can be a sufficient evidentiary foundation for that finding; it was unnecessary for the trial judge to ascertain the “content of the legal advice”…
Arising from the evidence set out above, the findings which follow applying these principles, are compelled in my view.
THE EVIDENCE GENERALLY
At the commencement of the hearing before me on 22 November 2019, the wife was represented by Mr Linklater-Steele of Counsel. The husband, a practising health professional, represented himself. For reasons delivered orally, I allowed certain objections to the husband’s material.
Mr Linklater-Steele informed the Court at the commencement of the trial that through an “abundance of caution”, the husband’s solicitor at the time of the agreement had been served with a subpoena but the husband had not indicated a need to cross-examination the solicitor. Mr N’s file was produced by the husband however, and was marked as Exhibit 2.
It transpired that Mr N was required for cross-examination and as a result, it was necessary for the hearing to be adjourned to 4 February 2020 for that evidence to be taken. As might be anticipated during cross-examination, Mr N was referred to his file. To assist the husband (and the Court), the husband did brief Ms McLennan of Counsel who conducted the cross-examination on behalf of the husband and thereafter provided written submissions.
It is not necessary to record every part of the parties’ evidence, however in seeking to explain how the Court has come to its conclusions, I now set out evidence which has shaped the result.
Statements of fact hereafter should be construed as findings of fact.
I found both the wife and the husband believable witnesses generally and the limited cross-examination by the then unrepresented husband of the wife demonstrated how little of her evidence was really controversial. Of course, she could only rely on exchanges of documents and Mr N’s file as to what instructions or discussions took place between the husband and his solicitor Mr N, as she was not present for those discussions. It is clearly apparent however that at the time of separation the husband was earning in the vicinity of $600,000 per annum gross as a health professional, but that the parties’ nett assets were modest – particularly if the husband’s superannuation entitlement was not included. The husband, I accept, wanted to “look after” his former partner of many years and the creative way in which the financial agreement sought to achieve this (where few available cash assets existed), is abundantly clear.
On all the evidence as between the husband and wife, they had negotiated the broad parameters of the sharing of assets as available and then, after agreeing on the level of periodic spouse maintenance until the husband turned 64 years, used Life Insurance and Trauma Insurance policies, to be owned by the wife, to, in essence, provide some security to the wife so that if the husband was unable to continue to earn an income, she would be protected. If his income dropped, provision for a deduction in the periodic monthly sum was made in the agreement. No one suggests the wife did not get the independent legal advice and acted in reliance upon it.
Accordingly, it is the evidence of the husband and his solicitor Mr N that becomes most relevant to the findings I am required to make.
THE HUSBAND’S EVIDENCE
The husband was at times in his evidence a little uncertain, even vague, which I attribute mostly to the time that had elapsed since the creation of the agreement. He of course had available to him the file of his former solicitor which enabled him to tender the file (marked Exhibit 2) on 22 November 2019. The husband’s trial affidavit was more in the form of a submission (referring as it did to a number of legal authorities he regarded as relevant), but some of the evidence, coupled with this testimony under cross-examination, reveal some concessions and honest reflection. In this regard, I note:
(a)that the husband empathetically acknowledged that he did not assert the wife or her solicitors “took advantage” of him. This is also in the context of the husband agreeing that whilst the lawyers were exchanging emails, the husband and wife continued to also negotiate the broad terms of the agreement and variations;
(b)that the husband could not recall the conversation with his solicitor about liabilities, but when directed to the solicitor’s diary note of the initial consultation on 8 May 2013 (Exhibit 8) he conceded that the figure for loans of $250,000 could only have come from him. He certainly recalled expressing his view that his business had no value, but no financial statements for the business were provided and no valuation undertaken;
(c)although the letter from the wife’s solicitors to the husband’s solicitor on 22 May 2013 did not estimate the business loans (which the husband accepted were his full responsibility), reference at least to the L Finance Company liability was made in that letter;
(d)the email exchange between the husband and wife of 14 August 2013 related to the wife’s concern about her position if the husband’s income drops. In response to the wife’s email sent at 8.34 the husband, at 8.51 said, inter alia:
You will either have to accept current conditions as they are which are generous and fair to both of us or not and if not we go to next stage. Your Call [Ms Johanson]. There is an element of risk but I do not have a crystal ball to foresee what lies ahead. The binding financial agreement is a legally binding agreement and we are both bound by the provisos in it.
This confirms, at this stage, the husband was aware (I find after oral advice from Mr N) that any agreement entered into would be “binding”.
(e)the husband confirmed that there were extensive discussions about getting security through a Life Insurance Policy and that he had engaged the Insurance Consultant Mr M. That the husband’s solicitor Mr N relied upon the husband’s selected financial advisor Mr M is apparent from Mr M’s email to Mr N (and copied to the husband) of 29 October 2013 which inter alia stated:
[Mr N] I have a number of clients who have the same arrangement i.e. pay for life insurance to age 65, the problem is in a few years when all should be calm amount (sic) parties the growing premium at a time when often the payer is slowing up with income causes angst.
Mr M appeared to be suggesting the husband “is better off in taking level rates and the costs (sic) is not unknown going forward”. I infer from the husband’s evidence that because the initial fixed premiums were more than he thought, he did not take up Mr M’s suggestion of a life policy with “level premiums”. The policies were taken out on the rates of premium taken by the husband and were likely to increase. Specific policy numbers were incorporated in the agreement (as sought by Mr N in his email of 11 November 2013 to Mr M).
(f)when the husband became concerned with the increase in the premiums payable under the policies, he attempted to negotiate a new arrangement or variation with the wife, including it seems, that she pay the premiums. The wife was not prepared to do so. At around this time (nearly three years after the agreement was signed), the husband had sought advice from Mr M on 6 December 2016 as to the consequences of not maintaining the Life Policy. The husband then authorised Ms B to communicate with Mr N.
(g)by 13 December 2016, the husband indicated to Mr N that he was minded “to revisit the BFO (sic) seeking variation downwards with full financial disclosure…”. The husband thereafter received advice that the financial agreement could not be varied, other than by agreement with the wife which he described was not “the greatest feeling” and further that the wife could seek to enforce the agreement, which she has by her current Application to this Court. The husband says it was only in December 2016 when he was informed about the inability to seek a variation of the agreement that he “started to understand I had not received the requisite advice.” He then obtained his file from Mr N and engaged other lawyers from around 17 February 2017;
(h)in respect of the advice the husband now claims he got, or did not get from Mr N during the course of his retainer to 22 January 2014 when the agreement was signed, the husband says:
(i)Mr N gave “general” oral advice about spouse maintenance, and that what he had negotiated with the wife was generous;
(ii)he did not understand Mr N’s advice was “lacking and inappropriate” and thought that by signing the statement “I was confirming I had a lawyer acting for me who had given me advice, which I do not deny (see Exhibit 7);
(iii)he was not given advice about what the wife could receive in this property dispute – and denied, even when shown the diary note of the first consultation, the reference to “60-70%” reflected advice given to him by Mr N of possible entitlements;
(iv)Mr N did not raise with him the difference between a binding financial agreement and consent orders, but says Mr N told him he should enter into a binding financial agreement;
(v)somewhat inconsistent with other evidence, the husband, who accepted he was involved in many drafts of the agreement, conceded in cross-examination that he “did” get advice about the “effect of the agreement” which he accepted at the time;
(vi)he obtained advice from another firm of solicitors in 2017 after which, as he consistently affirmed in his evidence, that although he got advice from Mr N, he believes now he did not obtain the “requisite standard of advice.” Not surprisingly, the husband, a doctor, was somewhat vague about what he meant to be “requisite”; and
(vii)the process when the husband signed the final agreement (noting the wife had signed with her solicitors some six days earlier on 16 January 2014) did not suggest any failure by Mr N – although in his submissions, it is asserted that if a consultation took only 15 minutes (and the husband is unable to recall), then that enables an inference to be formed that Mr N did not have sufficient time to advise the husband on that day about the advantages and disadvantages of the binding financial agreement and the rights of the husband under s 79 of the Act. Furthermore, it is not in dispute that it was not until 15 February 2014 that a comprehensive written letter of advice was given to the husband by Mr N. The timing of this letter was the subject of cross-examination of the solicitor, Mr N, by Counsel for the husband and also of submissions.
(viii)It follows as I soon demonstrate that the evidence of the husband in some aspects is confirmed by emails and diary notes but at times was not consistent with the direct evidence which Mr N, who presented for cross-examination in answer to a subpoena, gave on 4 February 2020. This conflict of evidence lies at the epicentre of the case argued by the husband. I deal with that evidence now.
THE EVIDENCE OF MR N
Mr N was not required, of course, to provide an affidavit. I directed that as he had been subpoenaed by the wife, cross-examination by the husband’s Counsel would occur first and without any evidence in chief having been given. He had his file (Exhibit 2) available. After cross-examination had finished, Counsel for the wife was permitted to also question the witness – however, the examination was more fulsome than what might be otherwise allowed within the constraints of re-examination
Mr N, considering the events in question around the negotiation and signing of the financial agreement occurred over six years earlier, heavily relied upon his file to assist with his recollection. I did not regard this as surprising, however as Mr N properly conceded, he regretted his dairy notes were “not more fulsome”. I record the following evidence given by Mr N of particular relevance:
(a)When the husband first consulted him on 8 May 2013, he had already reached an “agreement” with the wife and the only source for the notes set out in the diary note, were at that time the husband;
(b)He was aware of the husband’s instructions that there were business debts in the range of $250,000 and accepts that Schedule 2 did not refer to those debts, even though the wife’s solicitors referred to the L Finance Company obligation in their correspondence. He had no recollection about “following up” this debt issue;
(c)Although he could not say exactly when he gave advice about whether a binding financial agreement or consent order was preferable, he says he gave such advice recommending the binding financial agreement process and the first draft agreement (prepared by Mr N) was sent to the husband on 1 July 2013;
(d)Mr N, in his email to the husband of 2 July 2013 when indicating his intention to send the first draft to Mr K (the wife’s solicitor), said:
I need to prepare written advice to you Re the pros and cons of the BFA. This is a legislative requirement. I am of the view your offer is a generous one. I propose to set out in detail why in my written advice.
He never did so, until the letter sent after execution of the agreement. Mr N was unable to explain why the “written” advice was not given earlier, but did say he gave advice to the husband that a consent order that included provisions for spouse maintenance to be payable for “20 years” may not be approved by the Court.
(e)When asked about the entries in Exhibit 15 (the firm’s “Client Ledger”), Mr N said he did not always “put a note in the ledger” for every event – although as this seems to be the way his client was “billed” not to do so, or not accurately setting down the time expended, would affect the ultimate charges to the client;
(f)He regarded the husband as “a sophisticated” client who had negotiated the terms of the agreement directly with the wife; had personally sourced this “solution” relating to use of Life Insurance/Trauma Insurance as a comfort to the wife; and that the husband was involved in the “tinkering” of the agreement after the first draft was prepared; and
(g)Even though the diary note of 22 January 2014 reveals “15 +” mins and the ledger records “60 of a hour time” “spent for see you, letters, you, letter other side charge time spent”, Mr N maintained he gave advice on 22 January 2014 as required by the certificate he signed. His evidence is that from the initial consultation on 8 May 2013; to the first draft of the financial agreement sent 1 July 2013; and the numerous exchanges and emails amending the draft including the consultation of 22 January 2014, he gave oral continual advice to the husband and the husband accepted that advice.
SUBMISSIONS
Counsel for the parties relied upon extensive written submissions which I have considered. The fact that in these Reasons for Judgment I do not deal with every submission, is not to suggest otherwise.
On all the evidence, I have reached the conclusion that the husband did receive the independent advice required by s 90G(1)(b) and (c) from Mr N between 8 May 2013 and importantly including 22 January 2014, and that the husband’s signing of his statement to that effect – a statement included in the first draft agreement, finally executed by the husband on 22 January 2014 – creates an inference that has not been displaced.
My broad reasons for so finding are:
(a)although Mr N’s recollections were at times vague, the stream of emails and the numerous exchanges between him and the client, are evident of the husband needing to get an arrangement finalised even though, particularly in terms of the maintenance component, the terms were generous;
(b)whilst the husband now complains that the agreement is not just and equitable, that is not the test. Certainly if consent orders were offered to the Court, the provisions for long term spouse maintenance would have required some clear submissions before Court was likely to approve them. I make no finding that a Court would or would not have approved any such orders, although the desire identified by s 81 for finality would have arisen. Furthermore, if a long term spouse maintenance order was made, it would have been amenable to variation pursuant to s 83. The wife’s response to this uncertainty are clear. She wanted the maintenance component fixed into the future. The husband clearly was prepared to agree to this to enable him to “look after” the wife and proceed with his application for divorce which he filed on 28 February 2014, after both parties had executed financial agreement;
(c)the fact that Schedule 2 does not include the business debts, even when the husband and wife both knew some business debt existed, is not a material issue. The husband and wife agreed that the business had no value – which is entirely consistent with a business with some assets (including professional fees/debtors outstanding goodwill, equipment etc.) being offset by labilities;
(d)I accept Mr N gave the advice orally to the husband he was required by law to give, and although submissions as to the lack of fulsome diary notes are open, this retainer between Mr N and the husband was more extensive than, for example, a solicitor seeing a client on one or limited occasion before an agreement was signed. Certainly as a matter of professional practice and file management, having clear diary notes offers some level of protection to a solicitor against claims by a client that they did not get certain advice. However the failure to do so does not mean, in my view, that every client’s version of consultations should be preferred over the legal practitioner. It is always a matter of context, and the competing versions must be assessed with an understanding of the retainer and the number of likely opportunities for advice to be given, existing.
(e)Mr Johanson was an intelligent and careful client. This is demonstrated by the level of engagement and desire for particularity which he had, in both the negotiation and variations to the draft agreement, engaged in. The maintenance arrangements, unusual as they may be seen, to offer as security for the wife’s future maintenance a suite of life insurance policies, was sourced by him. I am satisfied he could have taken a “level premium” option but infer that was likely to be more expensive initially. He took the less expensive option contrary to the suggestion of his financial advisor Mr M;
(f)I reject any suggestion that the evidence establishes the husband was under duress or undue influence when he signed the agreement. Certainly the husband wanted to move on and remarry Ms B. The wife was sticking to the “generous” maintenance terms she was to receive as negotiated. It was always an option for the husband to take his chances by commencing property proceedings. He did not wish to do so; and
(g)In these circumstances, the husband and wife both knew that by proceeding with the financial agreement they were substituting any rights under the Act for the terms of the carefully drafted agreement. The law allows them to do so, and authorities make it clear that there are very clear requirements to be fulfilled in such circumstances. Having done so, contracting parties should not lightly be entitled to walk away from the terms of their agreement.
In my view, all the circumstances and requirements necessary to be fulfilled to ensure parties’ rights lost by signing a financial agreement are not lost unfairly, have been fulfilled and satisfied in this case.
The regret the husband now has about the terms of the agreement, which he complied with fully for a time, and has sought to escape through his initial Application heard by Cleary J and now in this Application because he says he cannot afford to maintain his obligations, do not alter the fact that as a matter of law, the financial agreement is binding on the husband and wife and capable of enforcement as if it were an order of the Court.
The husband’s Application should be dismissed and the Court will order that the financial agreement dated 22 January 2014 is binding upon the parties.
I propose to list the matter for further Case Management Hearing before me at 9.30am on 6 September 2021, to make directions as to how the wife’s substantive application for enforcement should be progressed.
I certify that the preceding thirty-four (34) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Baumann. Associate:
Dated: 19 August 2021
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