Johanson & Johanson

Case [2021] FamCA 609

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

  1. 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.

  2. Although the husband has remarried, for the purpose of these Reasons I refer to these parties as husband and wife.

  3. 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…

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Details
AGLC
Johanson & Johanson [2021] FamCA 609
Case
[2021] FamCA 609
Decision Date

CaseChat Overview and Summary

In the matter of *Johanson & Johanson*, Ms Johanson (the applicant wife) sought to enforce a financial agreement entered into with Mr Johanson (the respondent husband). The husband opposed the enforcement, contending that the financial agreement was not binding due to alleged non-compliance with specific provisions of the *Family Law Act 1975* (Cth), namely sections 90G(1)(b) and (c). The proceedings were heard by Baumann J in the Family Court of Australia.

The central legal issue before the court was whether the financial agreement dated 22 January 2014 was binding on the parties, given the husband's assertions regarding the satisfaction of the statutory requirements for such agreements. Specifically, the court was required to determine if the husband had established that the conditions precedent to the agreement's enforceability under section 90G of the Act had not been met.

Baumann J found that the financial agreement was binding. The court's reasoning, based on the evidence presented, led to the conclusion that the requirements of section 90G of the *Family Law Act 1975* (Cth) had been satisfied. While the husband was a practising health professional earning a substantial income, and the parties' net assets were modest, the court accepted that the husband intended to provide for his former partner. The agreement, which involved the use of life and trauma insurance policies to secure periodic spousal maintenance, was seen as a creative mechanism to achieve this. Crucially, the court found that the wife had received independent legal advice and acted in reliance upon it, a key element for the validity of such agreements.

Consequently, the court dismissed the husband's application challenging the validity of the financial agreement. The court declared the financial agreement dated 22 January 2014 to be binding upon both parties. The proceedings were adjourned for a case management hearing to determine the progression of the wife's substantive application for enforcement.

Orders

Orders of the court

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).

Background

Background to the litigation

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Evidence

Evidence Before The Court

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.

Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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