Kovacs & Kovacs - [2022] FedCFamC2F 188

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Kovacs & Kovacs [2022] FedCFamC2F 188

File number: MLC 3807 of 2021

Judgment of: JUDGE O'SHANNESSY

Date of judgment: 3 February 2022

Catchwords: FAMILY LAW – application to set aside financial agreement – section 90K(1)(d) hardship – section 90K(1)(e) unconscionability – interim spousal maintenance application – applicant unable to support herself – agreement did not provide for birth of a child – improvident agreement – agreement set aside.

Legislation:
Evidence Act 1995 (Cth) s 140

Family Law Act 1975 (Cth) ss 4AA, 90K(1)(d), 90K(1)(e)

Cases cited:
Beroni & Corelli (2021) FLC ¶94-004

Chaffin & Chaffin [2019] FamCA 260

Corelli & Beroni [2019] FamCA 911

Daily & Daily (2020) FLC ¶93-999

Fewster & Drake (2016) FLC ¶93-745

Fox & Percy (2003) 214 CLR 118

Frederick & Frederick (2019) FLC ¶93-900

Kakavas v Crown Melbourne Ltd (2013) 250 CLR 392

Kapsalis & Kapsalis [2017] FamCA 89

Kennon & Kennon (1997) FLC ¶92-757

Maroney & Maroney [2009] FamCAFC 45

Pascot & Pascot [2011] FamCA 945

Thorne & Kennedy (2017) 263 CLR 85

Division: Division 2 Family Law

Number of paragraphs: 85

Date of hearing: 2 February 2022

Place: Melbourne

Counsel for the Applicant: Mr P Testart

Solicitor for the Applicant: JosephDavid Lawyers

Counsel for the Respondent: Mr P Indovino

Solicitor for the Respondent: MDM Lawyers
ORDERS

MLC 3807 of 2021

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)

BETWEEN:
MS KOVACS

Applicant

AND:
MR KOVACS

Respondent

ORDER MADE BY:

JUDGE O'SHANNESSY

DATE OF ORDER:

3 FEBRUARY 2022

THE COURT ORDERS THAT:
1.The financial agreement dated 12 October 2010 between the Applicant Wife, Ms Kovacs and the Respondent Husband, Mr Kovacs ('the financial agreement') be and is set aside.
2.The application for a declaration that the financial agreement is enforceable is dismissed.
3.The Applicant Wife's application for interim spousal maintenance be and is dismissed.
4.The parties are directed to provide draft directions for final hearing as soon as practical.

AND THE COURT NOTES THAT:
A.The court intends to make directions for final hearing in chambers.
B.If in any proceedings there are allegations of family violence and the provisions of section 102NA of the Family Law Act 1975 apply (see attached Family Violence Information Sheet), any unrepresented party will not be permitted to personally cross-examine the other party/parties.
C.Affected unrepresented parties may apply to the Commonwealth Family Violence and Cross-Examination of Parties Scheme ("the Scheme") for representation but any such application must be made at least 12 weeks prior to the final hearing.
D.Further information about the legislation and the Scheme can be found at Part 4 of the attached Family Violence Information Sheet.
E.If s102NA applies and a party becomes unrepresented after trial directions have been made, that party is required to promptly advise the Court.

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 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
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 by this Court under a pseudonym Kovacs & Kovacs has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
EX TEMPORE
REASONS FOR JUDGMENT
JUDGE O’SHANNESSY

These are the settled reasons of a judgment delivered ex tempore. The settled reasons have corrected the transcript of my reasons for clarity and grammar and inserted provisions of legislation and paragraphs of authorities that were referred to by paragraph numbers ex tempore.
The applicant wife is Ms Kovacs (‘the Wife’) and the respondent husband is Mr Kovacs (‘the Husband’). The matter comes before me or came before me for the purpose of what was described as threshold defended hearing. Proceedings had been issued by the Wife on 7 April 2021. The proceedings were fixed for hearing in regard to whether a financial agreement should be aside and interim spousal maintenance before me on 2 February 2022.
On 2 February 2022, the parties appeared by counsel and counsel experienced in the family law jurisdiction. Notwithstanding the breadth of the issues that were alive in the proceedings, because of the efficiency of counsel in the conduct of the respective cases, the matter was able to be commenced and concluded on 2 February 2022.
The circumstances as put by the Wife demonstrated urgency in the event that her contentions were correct. I sought the agreement of the parties via their counsel as to whether I should reserve judgment or provide an ex tempore judgment this morning, that is, the morning following the hearing. I suggested that it may be more advantageous to the parties if I delivered an ex tempore judgment on the morrow. The parties' counsel agreed with that procedure. What follows are reasons that will necessarily be shorter than had I reserved and later delivered a reserved judgment. Notwithstanding that, I acknowledge the necessity to provide adequate reasons for the decision such that the parties and any court reviewing this decision would be able to determine the manner in which it was determined. I told the parties I would get to them at 10.30am this morning, but, due to the number of matters that were otherwise listed before me today, I have only been able to start this now, and I note that at least one counsel has another commitment at 12 o'clock that I have said I will accommodate.
BACKGROUND
The background to the matter is that the Wife is aged 34 years and the Husband 57. The Wife is engaged full time in home duties, raising the parties' child X (‘the child’), who will turn two shortly, in 2022.
The Wife came to Australia on a student visa in 2008 from China, and she came late in 2008, in 2008. She met the Husband in 2009 and soon thereafter they commenced a relationship. In December of 2009, the parties commenced residing together in a relationship that can be properly characterised as a de facto relationship as described in the Family Law Act 1975 (Cth) (‘the Act’) at section 4AA. The Wife became a permanent resident of the Commonwealth of Australia in 2013 and an Australian citizen in 2015.
The Wife deposes that the Husband was unemployed until September 2010 and there was no issue taken with that, and that it was in September 2010 that the Husband obtained what was described as secure employment. I am not satisfied that the Wife’s recollection of that date is entirely accurate because the binding financial agreement, or what purports to be a binding financial agreement, that was executed by the Husband on 1 October 2010 and by the Wife on 6 October 2010 but is dated 12 October 2010, (and where a copy of the document was sent by the Husband’s solicitor directly to the Wife on 14 October 2010), recites the Husband as being unemployed. Hence I am not convinced of that date. Nothing turns on it.
What is significant is that, when the parties commenced cohabitation, the Husband was employed full time in caring for his mother and in receipt of a carer's pension. The Wife obtained some employment in retail during that time. Not long after the parties commenced cohabitation, the Husband’s mother, due to deterioration of her health, was required to be hospitalised. It is common ground that, notwithstanding that, both parties cared deeply for the Husband's mother, including the Wife who did all she could to assist the Husband in that care, including care of such matters as toileting. The Husband makes the point that that was for a relatively short period, but there is no dispute that the Wife in this case did all she could to assist the Husband in the care of his mother.
I have referred to the dates of the controversial financial agreement. Hence, by 14 October 2010, the parties had a financial agreement and the Wife had been provided with a copy of the signed document. In 2010, as contemplated by the agreement, the parties married. It is common ground that the financial agreement did not specifically refer to or contemplate that a child or children would be born. Further, it is common ground in this case that the parties did not, at the time of entering the financial agreement or marrying, contemplate having children: In fact, it is common ground that the Husband's position of not having children was made clear and known to the Wife. At that time, she accepted it.
The parties continued to reside in the home of the Husband’s mother after she was removed from that home to nursing care. Ultimately, the Husband’s mother died in 2015 and he inherited the home in which the parties had been residing. It is his case that his parents had come to Australia as migrants and worked long and hard over many years to be able to own unencumbered that home, and that was inherited by him. I accept that evidence.
The parties then conceived a child and the parties' only child was born in 2020. There is a dispute between the parties as to the Husband’s attitude to that child, however it is not disputed that, following separation, between then and now, the Husband has undertaken attempts to ensure that he has a relationship with that child and looks forward to regular overnight time with the child. I do not make any finding in these proceedings as to the Husband’s attitude to the child. He deposes, and it was not challenged in cross-examination, that, once the child came along, he was comfortable with the idea and, once the child was born, was delighted. In the Husband’s affidavit filed 21 January 2022 he refers to that as follows:
5.Interim Orders of this Honourable Court dated 8 October 2021 provide for me to spend time with X each Sunday from 11am to 5pm and each Wednesday from 8am to 9.30am. This time has been implemented successfully and I am enjoying spending time with our son and we have established a close and loving bond. I am hopeful that my time with X will increase to overnight time when he reaches the age of three and as recommended in the Child Dispute Conference Memorandum to Court dated 4 October 2021.
6.I deny all the allegations and assertions made by the wife that I showed very little or any interest or had very little input into our son X's life while we resided together. I did all that I could to support the wife who suffered from post-natal depression. Indeed, she was hospitalised for approximately one and half months with our son X beside her so that she could attend to his needs as he was only months old. I visited the wife and our son daily while she was in hospital and attended to all her needs that she required. It came to me as a total surprise that upon her release from hospital that she applied for an Intervention Order.
The parties then separated in late August 2020. It is common ground that, following the child’s birth, the Wife did not cope with the new circumstances of caring for the baby and suffered postnatal depression. It is the Wife’s case that she continues to suffer depression and is being treated for that depression and receives medication and counselling in regard to that. Notwithstanding that the Wife has not put forward what was described by the Husband’s counsel as independent evidence of that health circumstance, in the circumstances where the Wife continues to take medication for depression as prescribed by her doctor, I accept that she continues to suffer from depression at this point and further, that is consistent with my observation of her in the witness box, so to speak, through the video link of Microsoft Teams.
Some short time after the child’s birth, the Wife’s circumstance was such that she was admitted to the Mother and Baby Unit of the Suburb B Hospital. The Wife obtained upon the application of the Victoria Police, an intervention order on 31 August 2020, and the parties never resided together again. The Wife makes significant allegations of family violence, particularly, and indeed only, following the death of the Husband's mother in 2015. At the commencement of the proceedings I asked the Wife’s counsel whether a Kennan type claim was pressed and it was not (see: Kennon & Kennon (1997) FLC ¶92-757).
The allegations of family violence post-2015 are in dispute. Sensibly, counsel did not expend time cross-examining or attempting to prove those matters one way or the other, as, in terms of the issues that I must determine today, those matters would not have assisted me greatly. But the point is that the allegations of family violence were not pressed in the hearing before me, nor were issues relating to the time that the child should spend with his father.
MATERIAL RELIED UPON:
The Wife relied upon her:
(1)Affidavit filed 27 January 2022;
(2)Summary of Argument filed 21 January 2022;
(3)Amended Initiating Application filed 7 June 2021;
(4)Financial Statement filed 7 April 2021; and
(5)Affidavit filed 7 April 2021.
The Husband relied upon his:
(1)Affidavit filed 21 January 2022;
(2)Financial Statement filed 21 January 2022;
(3)Defence to Applicant’s Point of Claim filed 19 January 2022;
(4)Affidavit filed 26 May 2021; and
(5)Response Application filed 26 May 2021.
The parties, helpfully, provided outlines of case and, in addition, what was referred to as “points of claim” by the Wife and a “defence” to those points by the Husband.
THE ISSUES FOR DETERMINATION:
Ultimately, what became necessary for me to hear and determine was the competing positions in regard to the financial agreement executed between 1 October 2010 and 6 October 2010 and dated 12 October 2010. The Wife’s position is that that document should be set aside pursuant to section 90K(1)(d) of the Act or what is commonly referred to as the “change of circumstances hardship ground”, and section 90K(1)(e) of the Act, unconscionability. Section 90K of the Act provides as follows:
Circumstances in which court may set aside a financial agreement or termination agreement
(1)A court may make an order setting aside a financial agreement or a termination agreement if, and only if, the court is satisfied that:
(a)the agreement was obtained by fraud (including non-disclosure of a material matter); or
(aa) a party to the agreement entered into the agreement:
(i)for the purpose, or for purposes that included the purpose, of defrauding or defeating a creditor or creditors of the party; or
(ii)with reckless disregard of the interests of a creditor or creditors of the party; or
(ab)a party (the agreement party ) to the agreement entered into the agreement:
(i)for the purpose, or for purposes that included the purpose, of defrauding another person who is a party to a de facto relationship with a spouse party; or
(ii)for the purpose, or for purposes that included the purpose, of defeating the interests of that other person in relation to any possible or pending application for an order under section 90SM, or a declaration under section 90SL, in relation to the de facto relationship; or
(iii)with reckless disregard of those interests of that other person; or
(b) the agreement is void, voidable or unenforceable; or
(c)in the circumstances that have arisen since the agreement was made it is impracticable for the agreement or a part of the agreement to be carried out; or
(d)since the making of the agreement, a material change in circumstances has occurred (being circumstances relating to the care, welfare and development of a child of the marriage) and, as a result of the change, the child or, if the applicant has caring responsibility for the child (as defined in subsection (2)), a party to the agreement will suffer hardship if the court does not set the agreement aside; or
(e)in respect of the making of a financial agreement--a party to the agreement engaged in conduct that was, in all the circumstances, unconscionable; or
(f)a payment flag is operating under Part VIIIB on a superannuation interest covered by the agreement and there is no reasonable likelihood that the operation of the flag will be terminated by a flag lifting agreement under that Part; or
(g)the agreement covers at least one superannuation interest that is an unsplittable interest for the purposes of Part VIIIB.
…
In addition to setting the agreement aside on those two grounds, the Wife seeks an order for interim spousal maintenance, and it is common ground that the financial agreement does not prevent her from doing so in the circumstances where the financial agreement did not purport to deal with maintenance. Even had it done so, I note the provisions of section 90F(1A) in regard to the consequences of someone who is unable to support themselves without a means-tested pension when the agreement came into effect.
In this matter, I have regarded the evidentiary burden of proof as being on the party who asserts a particular fact. Section 140 of the Evidence Act 1995 (Cth) applies and is as follows:
Civil proceedings: standard of proof
(1)In a civil proceeding, the court must find the case of a party proved if it is satisfied that the case has been proved on the balance of probabilities.
(2)Without limiting the matters that the court may take into account in deciding whether it is so satisfied, it is to take into account:
(a)       the nature of the cause of action or defence; and
(b)       the nature of the subject-matter of the proceeding; and
(c)       the gravity of the matters alleged.
THE WIFE’S APPLICATION
In opening, I was told that much would turn on the credibility of the parties. Ultimately, I find that the credibility of the parties and the assessment of that is not the significant issue. I found the Wife to be a creditable and genuine witness. I found the Husband to be a credible and genuine witness. Each gave evidence from his or her perspective. I have attempted to deal with matters based upon what is not disputed or controversial or able to be challenged in addition to any contemporaneous documents, and have attempted to follow the exhortation of the High Court in Fox & Percy (2003) 214 CLR 118 at [30-31]. The plurality there observed:
[30]… However, it is equally true that, for almost as long, other judges have cautioned against the dangers of too readily drawing conclusions about truthfulness and reliability solely or mainly from the appearance of witnesses. Thus, in 1924 Atkin LJ observed in Société d'Avances Commerciales (Société Anonyme Egyptienne) v Merchants' Marine Insurance Co (The ‘Palitana’'):
“I think that an ounce of intrinsic merit or demerit in the evidence, that is to say, the value of the comparison of evidence with known facts, is worth pounds of demeanour.''
[31]Further, in recent years, judges have become more aware of scientific research that has cast doubt on the ability of judges (or anyone else) to tell truth from falsehood accurately on the basis of such appearances (52). Considerations such as these have encouraged judges, both at trial and on appeal, to limit their reliance on the appearances of witnesses and to reason to their conclusions, as far as possible, on the basis of contemporary materials, objectively established facts and the apparent logic of events. This does not eliminate the established principles about witness credibility; but it tends to reduce the occasions where those principles are seen as critical.

In regard to the claim that the agreement should be set aside pursuant to section 90K(1)(d) of the Act, that is, what I will describe for shorthand as the “hardship ground” the Husband asserts that there has not been a material change of circumstance and that hardship has not been caused. The Wife's case in regard to that section relies upon the birth of the child and the consequences for the Wife of that and difficult financial circumstances currently or, as it was pithily put by her counsel, she is “skint”.
In terms of the next challenge, pursuant to section 90K(1)(e) of the Act, of unconscionability, there was no dispute between counsel as to the applicable law and each party referred to and relied upon the seminal authority of Thorne & Kennedy (2017) 263 CLR 85 (‘Thorne & Kennedy’) and proceeded on the basis that that authority was well known to the court, which it is.
It is necessary to recite the points of claim. The Wife’s points of claim:
1)        The Applicant Wife (Wife) is:
a)        An Australian citizen, resident in Australia;
b)Married to the Respondent Husband (Husband), having married in 2010;
c)The mother of the child of the marriage, namely X, born in 2020 (child);
d)A signatory, together with the Husband, to a purported Binding Financial Agreement dated 12 October 2010 (BFA; date).
2)        At the date:
a)The Wife was at a disadvantage by reason of being a native speaker of the Chinese language and a speaker of the English language as a second language, thereby rendering her proficiency in the English insufficient to allow her fully to comprehend the terms and conditions of, and the implications of, the BFA;
b)A temporary resident of Australia, with her visa due to expire in a short time after the date;
c)The Wife had made significant financial and non-financial contributions, including contributions to the care of the Husband’s mother, to the relationship between the Wife and the Husband, who had been cohabiting since in or about December 2009, full particulars of which contributions are set out in her affidavit filed 7 April 2021 in this proceeding;
d)        The Wife was contemplating the impending marriage;
e)The Wife was dependent upon the Husband for emotional and psychological support, and was prepared to, and did, act upon the advice of the Husband (Wife’s circumstances).
3)As at, and at all material times before the date, the Husband knew or ought to have known all of the material details of the Wife’s circumstances.
4)As at, and at all material times before the date, the Husband knew that he stood to inherit substantial assets from his mother.
5)        The Husband procured the preparation of the BFA.
6)The Husband sought and procured the Wife’s agreement to agree to the terms and conditions of the BFA, and to sign it, by:
a)Saying to the Wife that if she did not sign the BFA, the marriage would not proceed;
b)Saying to the Wife that, notwithstanding that the BFA made no provision of any kind to her in the event of the marriage breaking down, he would ensure that the Wife was financially cared for, to the best of his ability (Husband’s conduct).
7)The Wife consented to the terms and conditions of the BFA, and signed it, on the basis of the Husband’s actions alleged in paragraphs 5 & 6 hereof.
8)The Husband’s mother died in 2015, and upon her death, the Husband inherited substantial real property and other assets from her estate.
9)In the premises of paragraphs 2 - 8 inclusive hereof, the Husband’s conduct was unconscionable within the meaning of s 90K(1)(e) of the Family Law Act 1975 (Act), such that the BFA should be set aside.
10)Further, and in the alternative, since the making of the BFA, the child was born.
11)The Wife has, since the birth of the child in 2020, been the child’s primary carer, and will continue in such role for the foreseeable future.
12)The Wife’s circumstances have, in relation to the care of the child, materially changed since the signing of the BFA, such that the said change of circumstances constitutes:
a)A material change of circumstances within the meaning of s 90K(1)(d) of the Act; and
b)        The Wife will suffer hardship if the BFA is not set aside.
13)The Wife refers to and repeats as particulars of the material change and the hardship referred to in paragraph 12 hereof, the factual allegations made by her in paragraphs 25, 27, 29, 31, 32 - 35 inclusive, 36 – 38 inclusive, 40 - 42 inclusive, 45 - 48 inclusive and 65 of her affidavit filed 7 April 2021 in this proceeding.
14)In the premises of paragraphs 10 - 13 inclusive hereof, the BFA should be set aside pursuant to s 90K(1)(e) of the Act.
15)The Husband and Wife separated on a final basis in August 2020 (separation).
16)At the time of the separation, the Wife was:
a)        Not employed;
b)Unable to support herself without an income tested pension, allowance or benefit.
17)      The Wife is presently:
a)Not employed;
b)In receipt of a Centrelink pension, allowance and benefit;
c)Unable to support herself without an income tested pension, allowance or benefit.
18)The Wife refers to and repeats the factual allegations made by her in paragraphs 45- 48 inclusive, and 49 – 53 inclusive of her affidavit filed 7 April 2021 in thisproceeding.
19)In the premises of paragraphs 16 - 18 inclusive hereof, s 90F(1A) of the Act applies and the BFA does not limit the power of this court to make orders for spousal maintenance pursuant to s 90F(1) and s 74 of the Act, as sought by the Wife.
The Husband’s defence to the points of claim states as follows:
1.The Respondent (herein after referred to as “the husband”) admits the facts pleaded in paragraph 1.
2. The Husband denies the facts pleaded in paragraph 2 thereof and states:
a.The wife was not at a disadvantage by reason of not being proficient in the English language. She studied English in China and came to Australia on a student visa to advance her studies. A good and sound command of the English language must be demonstrated before obtaining a student visa. Upon arrival in Australia, the wife continued her English studies and tertiary education (refer to paragraph 4 of Husband’s Affidavit 26 May 2021). The parties communicated in English.
b.It was open for the Wife to seek an extension on her visa or to return to China and then apply for a spouse visa once the parties married.
c.The wife made non-financial contributions for a short period of time that was more than offset by the accommodation and financial support that the husband provided her.
d.It is admitted that the parties executed the Binding Financial Agreement dated 12 October 2010 (herein after referred to as “the BFA”) in contemplation of marriage.
e.It is denied that the wife was dependent on the husband for emotional and psychological support and certainly in no greater way than that in which the husband was dependent on the wife for his emotional and psychological wellbeing. The wife had total freedom of movement throughout the party’s relationship. She was in part time employment. She sought and obtained her own lawyer who was also of Chinese background. A search on the law institute website provides that the wife’s solicitor also speaks Mandarin and presumably therefore gave the wife advice in both English and in the Chinese languages.
3.The Husband denies that he knew or ought to have known of the wife’s circumstances as pleaded by her.
4.The Husband admits that he presumed that he would inherit his parents property upon their death as he was the only child of their marriage.
5.The Husband admits that he sought and obtained legal advice and that his solicitor prepared the BFA.
6.The Husband denies the facts and conclusions of law pleaded in paragraph 6 and states:
a.He indicated to the wife that he wished to protect his family home in the event of a breakdown of their relationship; and
b.He told the wife that whilst they were together, he would support her in the usual way that a husband supports his partner or wife.
7.The husband denies the facts and conclusions of law pleaded in paragraph 7 and states that the wife signed the BFA with full knowledge of all facts and circumstances and after she sought and obtained independent legal advice from a lawyer chosen by her.
8.The Husband admits that he inherited the property at C Street, Suburb D and a small farming property in Country E.
9.The Husband denies that his conduct was unconscionable on the following basis:
a.The wife was not at a special disadvantage that would seriously affect her ability to make a judgement as to her own best interests;
b.The wife sought and obtained independent legal advice from a lawyer chosen by her and who speaks her native language before she signed the BFA;
c.The wife could have refused to sign the BFA and still continued the relationship and clarified her residential status at a later time;
d.There was no legal impediment or fears or threats in the wife returning to China if she wanted to do so;
e.The wife was completely and totally aware of the contents and legal effects of the BFA and made a free choice to execute same; and
f.The wife was not financially dependent on the husband as she worked part time and had income from her parents to support her.
10.The Husband admits that they have a child, X, born in 2020.
11.The Husband admits that the wife is and has been the primary carer of their child.
12.The Husband does not admit that the birth of a child alone is sufficient to satisfy the requirements that there has been a material change in circumstances and the wife would suffer hardship unless the BFA is set aside. Further, the Court ultimately has a discretion to not set aside the BFA in the event that the wife is able to satisfy the Court that the requirements of Section 90K(1)(d) of the FLA have been met. The ordinary expectation of married life is the birth of a child. The Husband has provided as much support and assistance as he is able to in the child’s upbringing. He pays child support as assessed. It is the husband’s wish and expectation that as the chid gets older, he will spend equal time and parental responsibility for the child.
13.The husband denies the matters pleaded in paragraph 13 and takes issue with the facts and conclusions deposed to by the wife in her affidavit.
14.The husband seeks a declaration that the Binding Financial Agreement dated 12 October 2010 is valid and legally binding and states that it is not in the interest of justice nor is it just and equitable that it be set aside.
15.The husband admits that the parties separated in August 2020.
16.The husband admits the facts pleaded in paragraph 16.
17.The husband does not admit that the wife is currently unemployed and disputes that she is inadequately able to support herself. She has capacity to obtain gainful employment. The wife has not deposed to any attempts in seeking employment. She is in good health, is young and has a good command of the English language. The wife deposes to placing the child in child care facilities for extended periods of time. This would allow the wife to seek some form of casual employment if she wished to do so.
Further, the husband states that he does not have the means or ability to pay any maintenance for the wife by reason of his own ill health, extended periods of unemployment and the impact of COVID-19.
18.The husband admits the BFA does not preclude the wife from brining a spousal maintenance claim.
In regards to the unconscionability claim, it is common ground that, for that to be made out, there must be what is described as a “special disability”. It is the Husband's case that the Wife, in all of the circumstances and in particular by getting her own legal advice from a lawyer who was a native speaker of the language of the country from which the Wife came was not under any specific disability.
HARDSHIP: THE AUTHORITIES
I was referred to the well-known decision, in regard to the hardship aspect of Fewster & Drake (2016) FLC ¶93-745 (‘Fewster & Drake’) and also Frederick & Frederick (2019) FLC ¶93-900 (‘Frederick’), and I was referred to the decision of Rees J in Kapsalis & Kapsalis [2017] FamCA 89 (‘Kapsalis’).
I refer to Fewster & Drake, and in particular from paragraphs [47-54] and [60-65] and [68].
47.It is clear enough that s 90K(1)(d) follows the form of s 79A(1)(d) of the Act, which states:
(1)Where, on application by a person affected by an order made by a court under section 79 in property settlement proceedings, the court is satisfied that:
…
(d)in the circumstances that have arisen since the making of the order, being circumstances of an exceptional nature relating to the care, welfare and development of a child of the marriage, the child or, where the applicant has caring responsibility for the child (as defined in subsection (1AA)), the applicant, will suffer hardship if the court does not vary the order or set the order aside and make another order in substitution for the order…
48.There is, however, a crucial difference. Under s 79A(1)(d) the change in circumstances must be “of an exceptional nature” for the section to apply, whereas the change in circumstances under s 90K(1)(d) must be “material”. The threshold under s 90K(1)(d) would seem to be lower than that which applies to s 79A(1)(d).
49. Few cases have examined s 90K(1)(d). In Pascot, Le Poer Trench J said:
354. For the purposes of sec 90K(1), it would be useful to adopt the test in the following terms:
a)There must be circumstances that have arisen since the making of the Binding Financial Agreement, being circumstances of a material nature relating to the care, welfare and development of a child of the marriage;
b)It must be demonstrated that the child or the applicant, if she has caring responsibility for the child, will suffer hardship if the court does not set the agreement aside;
c)The court may set the agreement aside if it considers it appropriate and make such orders under sec 90K(3) as it deems appropriate.
50.Essentially, the analysis in Pascot separates the words of the subsection into three steps. However, this test omits the critical words “as a result of that change”. Those words provide a necessary link between the changing circumstances and the hardship. According to the clear terms of the subsection, the hardship must result from the material change in circumstances, and not from some other cause.
51.As we will shortly explain, in applying the test from Pascot and not the terms of the section itself, the primary judge overlooked this requirement and thereby fell into error.
52.In relation to the meaning of the word “material” in s 90K(1)(d), Le Poer Trench J considered that this indicated that an applicant would need to show that the change in circumstances was “substantial, significant and relevant”. That is not an inapt way of describing the word; however, for our part we do not see the benefit of substituting other words for those used in the Act itself, as in some cases that can mislead.
53.In Sola Optical Australia Proprietary Limited v Mills (1987) 163 CLR 628 the High Court had to consider the phrase “facts material to the plaintiff’s case” that appeared in s 48 of the Limitation of Actions Act 1936 (SA). What the Court said there is relevant to the construction of the present section. The Court said at 636–637:
A fact is material to the plaintiff’s case if it is both relevant to the issues to be proved if the plaintiff is to succeed in obtaining an award of damages sufficient to justify bringing the action and is of sufficient importance to be likely to have a bearing on the case. The Shorter Oxford English Dictionary defines the word “material”, inter alia, to mean “Of such significance as to be likely to influence the determination of a cause”. Although a definition attributed to the sixteenth century, in our opinion it provides an apt guide to the intention of the legislature in choosing to refer, without any elaboration, to “facts material to the plaintiff’s case”.
54.With those observations in mind we now turn to the grounds of appeal. We shall deal with them in a slightly different order to that which they were addressed at the hearing of the appeal.
…
Can the birth of a child, of itself, engage s 90K(1)(d)? (Ground 1.1)
60.The husband submitted that the birth of a child, of itself, cannot be a material change relating to the care, development and welfare of a child. Rather, he submits the material change in circumstance must be directed to the care, welfare and development of a child and not to his or her birth. This is said to be so because the ordinary expectation of married life is the birth of a child.
61.It may immediately be observed that if the birth of a child is within the ordinary realms of expectation of a marriage so is the care, welfare and development of a child.
62.The birth of a child leads inexorably to his or her care, development and welfare. We do not see why a birth cannot be a material change in circumstances for the purpose of s 90K(1)(d). Whether it in fact is such a change will depend on all of the circumstances.
63.The primary judge did not err in finding that the birth of the second child and the mother having the overwhelming care of the children physically and financially after separation constituted a material change in circumstances that had arisen since the agreement was entered into.
Did the primary judge err in his interpretation of “hardship” within s 90K(1)(d)? (Ground 1.2)
64.As developed in both the written and oral submissions, this ground became the vehicle for three separate challenges to the primary judge’s reasons. The first is that the section requires the Court to consider whether the hardship arose from the changed circumstance and not from the agreement itself. The second is that the answer to the first finding cannot be made by reference to the agreement alone but requires a comparison between what is provided for by the agreement and the present circumstances of the child or carer. Finally, it was submitted the Court must find hardship and not merely unfairness for s 90K(1)(d) to apply.
65.The husband correctly submits that the words “as a result of the change” indicate that the relevant hardship with which the section is concerned is the hardship which is caused by the change in circumstances. It is the changed circumstances which must give rise to the hardship, and not the agreement itself. It is to be recalled that, subject to compliance with the statutory requirements, people are free to enter such binding financial agreements as they see fit. There is no statutory provision which enables a binding financial agreement to be set aside merely because it is unfair: Hoult & Hoult (2013) FLC ¶93-546 at 87,283 and 87,296–87,298.
…
68.Finally, we accept the husband’s submission that the hardship required by the section is something more than unfairness. In In the Marriage of Whitford (1979) FLC ¶90-612 (“Whitford”) at 78,144–78,145 the Court said that hardship is:
…akin to such concepts as hardness, severity, privation, that which is hard to bear or a substantial detriment…
…
In ordinary parlance, hardship means something more burdensome than “any appreciable detriment’”. We consider that in subsec. 44(4) the word should have its usual, though not necessarily its most stringent, connotations.

I note that the decision relied upon by the Husband's counsel of Kapsalis refers to and relies upon Fewster & Drake. I do note that, in terms of the unconscionability, the Kapsalis decision was delivered prior to the High Court determining the matter of Thorne & Kennedy.
The point of Fewster & Drake was to demonstrate that there is no deeming or automatic hardship in satisfaction of section 90K(1)(d) because an applicant to set aside an agreement would have a worse result with an agreement in place than if there was no agreement. The point of Fewster & Drake was to demonstrate that, contrary to what had been the position in Pascot & Pascot [2011] FamCA 945 (‘Pascot’) that hardship cannot be inferred and that the approach of Pascot was in error.
The point of Fewster & Drake is that the hardship must be as a result of the material change in the circumstances (relating to the care, welfare and development of a child of the marriage) and it must be that the party caring for the child or the child that will suffer hardship if the court does not set aside the agreement.
Fewster & Drake also, at [68], makes it clear that the hardship is not any hardship but that it must be of the nature of hardness, severity, privation - that is, hard to bear or a substantial detriment. Hence, I do not accept that the mere loss of the opportunity to have a court case would be sufficient hardship for the purpose of section 90K(1)(d) of the Act and indeed care must be taken not to conflate the end statement of 90K(1)(d), that a party will suffer hardship if a court does not set aside the agreement, with the actual requirement of hardship being as a result of the change in circumstances (relating to the care, welfare and development of a child of the marriage).
I also note the discussion in Kapsalis, to which I was referred by counsel for the Husband, that the birth of a child, of itself, may not be a sufficient to be a material change in circumstances.
In Kapsalis, the agreement contemplated children. In Frederick the Full Court observed as follows:
24.The primary judge correctly accepted that in applying s 90K(1)(d) of the Act, the Court must determine hardship by undertaking “some comparison between the position of the child, or the person with caring responsibility, if the agreement remains in place and the position of that child or person if the agreement is set aside” (Fewster & Drake (2016) FLC 93-745 (“Fewster”) at [67]).
…
42.It must be remembered that the primary judge was not hearing a final property case but an application to set aside a binding financial agreement which involved “some comparison between the position of the child, or the person with caring responsibility, if the agreement remains in place and the position of that child or person if the agreement is set aside” (Fewster at [67]) (emphasis added). That does not require the applicant for such an order to call all the evidence that would be called on a final property hearing such as formal valuations.
…
46.The reasons given by the primary judge for not giving the husband’s evidence any weight were, in our opinion, erroneous. It follows that the evidence permitted some comparison between the value of the property available for division if the Agreement stood (up to $100,000) and if it was set aside ($4,000,000 approximately). On that basis, hardship was readily established.
47.The wife’s case, taken at its highest, was that the parties had been in a relationship for 10 years, during which two children had been born. A significant share of the care of those children, including one who has a significant disability, has fallen upon the wife. That care is likely to continue. The contributions made by the wife taken together with the relevant considerations under s 75(2) of the Act cannot be adequately satisfied out of the smaller pool as opposed to the larger pool.
I refer to and repeat in particular [60-63] of Fewster & Drake cited earlier dealing with the birth of a child as being capable of being a material change relating to the care, welfare and development of a child of the marriage.
In Kapsalis, the trial judge's finding was that, in the particular circumstances of that case and where the agreement contemplated the birth of a child, the hardship the wife complained of related not to the birth of the child but the separation of the parties.
In addition to those cases, I also will refer to the decision of Chaffin & Chaffin [2019] FamCA 260 (‘Chaffin’), a decision of Foster J, and recite paragraphs of that decision. That decision dealt with section 90K(1)(d) (hardship) as well as the issue of unconscionability.
In Chaffin, Foster J observed as to the evidentiary onus.
[30]It is trite to say that the obligation to adduce relevant evidence is on the party who carries the evidentiary onus. In this matter it is the wife that seeks to impugn the financial agreement by reason of factual circumstances that are much in dispute between the parties. The nature of the relief sought by the wife is expected to frame a consideration of the relevant evidence that supports her case. Mostly the evidence focuses on the interplay of the parties’ relationship which to a significant extent the parties are at odds.
I will also note the observation, trite though it is, at paragraph 35, that I cannot use an inference to filling gaps that do not exist in the evidence.
[35]The Court cannot use an inference to fill in gaps that may exist in the state of the evidence before the Court: West v Government Insurance Office of New South Wales [1981] HCA 38; It remains at the discretion of the Court to determine whether inferences should, in all of the circumstances be properly drawn: Denning & Denning [2011] FamCA 160 at [76]- [78].
In regard to section 90K(1)(d), Foster J having quoted the relevant parts of Fewster & Drake, observed that, at the time of the signing of the agreement, the wife was expecting the parties' first child. There were three. Helpfully, Foster J posits the questions in a way that suggests a pathway that's not compulsory, but that assists me, so I will refer to it. He observes at paragraph 180 the hardship must be suffered as a consequence of the agreement not being set aside. The hardship, if the agreement is not set aside, must arise from the change of circumstances relating to the care, welfare and development of the child. He also posits the question as has the wife suffered something more burdensome than any appreciable detriment.
[180]The hardship must be suffered as a consequence of the agreement not being set aside.
I note in Chaffin there was a footnote to the judgment of a number of paragraphs of the role of a solicitor where the solicitor determines that the agreement is not in the interests of the party. I note those and they are of interesting reading, but they are not relevant to the determination in this matter. In this case, there was no criticism of either the solicitor that drafted the agreement and provided the initial certificate or of the solicitor consulted by the Wife. In referring to Chaffin, I do note that, having checked the decision of Thorne & Kennedy against the references to Nettle J in Chaffin, that, in fact, his Honour was referring to the judgments of Gordon J, where the applicable law was being referred to.
In addition to those cases dealing with the hardship provision, I am assisted by the decision of Daily & Daily (2020) FLC ¶93-999 (‘Daily’), which is a decision handed down on 9 December 2020. In that case, relevant to the submissions put by the Husband's counsel that in the ordinary course of any marriage, a child or children is contemplated, the judge at first instance made observations cited at [27] by the Full Court:
[27]With respect to whether the birth of the children constituted a material change in circumstances, the primary judge found:
266.In the present case the parties intended that consequent upon the marriage they would start a family.
267.The agreement is silent as to the provisions of the agreement in the event of children being born save that [19] and [20] of the financial agreement acknowledge the continued application of s 90K of the Act.
268.Whether contemplated or not, the advent of children should be considered as a material change in circumstances since the making of the financial agreement.
…
305.I have found that the birth of the children represents a material change in circumstances. If I am wrong in that contention, I find that the fact of the parties’ separation, the arrangements thereafter for the care of the children by each of the parties and the significant disruption to the children’s lives by now spending time with their parents in two different houses would represent a material change.
emphasis added
The reason I refer to that decision is that the Full Court allowed the appeal but not on that ground. The appeal was allowed solely on the ground of an inadequate consideration of whether the agreement was void for uncertainty, and there was no criticism of the trial judge's approach to the birth of a child being a material change in circumstances and, indeed, in that case, the matter was remitted back to that primary judge to deal with the further matter of whether the agreement was void for uncertainty.
UNCONSCIONABILITY: THE AUTHORITIES
I note that, in this case, the equitable relief sought by the wife related to unconscionability as it is known at law, not unconscionability and undue influence or duress, as was pressed in Thorne & Kennedy. Nonetheless, the discussion of unconscionability in Thorne & Kennedy is indeed apposite.
In regard to the unconscionability aspect, I was also referred to the first-instance decision of Corelli & Beroni [2019] FamCA 911 (‘Corelli’) which I have read overnight, and I note that the approach of the trial judge in Corelli was approved by the Full Court in that decision on appeal, see Beroni & Corelli (2021) FLC ¶94-004. I was referred to the convenient description of the relevant law in Corelli from [204] on, and I note that the Full Court in dealing with that decision approved the trial judge's observations of those paragraphs at paragraphs [73-74].
[73]We consider that the primary judge did not misconceive the nature of the court’s jurisdiction to set aside the BFA, given his recitation of the relevant principles and his discussion at [204]–[218] and [228]–[232].
[74]The findings and characterisations of the primary judge at [209] and [215] were entirely appropriate, and by no means were they the entire basis for his Honour’s decision to set aside the BFA. As put by the wife, an unfair, disadvantageous or improvident transaction can be a necessary, albeit not sufficient, element of a transaction liable to be set aside due to vitiating factors.
Thorne v Kennedy was a unanimous decision to set aside the decision of the Full Court of the Family Court of Australia in regard to the unconscionability ground. The plurality delivered joint reasons. Nettle J agreed unequivocally with those reasons but added further comments in regard to whether there should be a reconsideration of Kakavas v Crown Melbourne Ltd (2013) 250 CLR 392 and the issue of unlawful acts in duress cases.
The observations of the plurality include:
[55]… Further, the description of the agreements by the primary judge as not being “fair or reasonable” was not merely open to her. It was an understatement. Ms Harrison’s unchallenged evidence was that the terms of the agreements were “entirely inappropriate” and wholly inadequate “[i]n relation to everything”. She said that the agreements did not show any consideration for Ms Thorne’s interests. Even without Ms Harrison’s evidence, it is plain that some of the provisions of the agreements could not have operated more adversely to Ms Thorne. For instance, the agreements purported to have the effect that if Ms Thorne and Mr Kennedy separated within three years then Ms Thorne was not entitled to anything at all.
(emphasis added)
The plurality observed that no outcome was available that was fair and reasonable to the plaintiff. Paragraphs [38-45] and [63] of the plurality (Kiefel CJ, Bell, Gageler, Keane and Edelman JJ) are germane to this case and are as follows:
38.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.
39.In Commercial Bank of Australia Ltd v Amadio, Deane J said that the equitable principles concerning relief against unconscionable conduct are closely related to those concerned with undue influence. The same circumstances can result in the conclusion that the person seeking relief (i) has been subject to undue influence, and (ii) is in a position of special disadvantage for the purposes of the doctrine concerned with unconscionable conduct. For instance, in Diprose v Louth [No 1], the trial judge, King CJ, observed that both doctrines were satisfied where the defendant “was in a position of emotional dominance which gave her an influence over the [plaintiff] which she exercised unconscientiously to procure the gift of the house”. Before the High Court in that case, Mr Diprose relied only upon the ground of unconscionable conduct.
40.Although undue influence and unconscionable conduct will overlap, they have distinct spheres of operation. One difference is that although one way in which the element of special disadvantage for a finding of unconscionable conduct can be established is by a finding of undue influence, there are many other circumstances that can amount to a special disadvantage which would not establish undue influence. A further difference between the doctrines is that although undue influence cases will often arise from the assertion of pressure by the other party which might amount to victimisation or exploitation, this is not always required. In Commercial Bank of Australia Ltd v Amadio, Mason J emphasised the difference between unconscionable conduct and undue influence as follows:
“In the latter (undue influence) the will of the innocent party is not independent and voluntary because it is overborne. In the former (unconscionable conduct) 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.”
The proper appellate approach to findings concerning vitiating factors
41.In any case where a transaction is sought to be impugned by the operation of vitiating factors such as duress, undue influence, or unconscionable conduct, it is necessary for a trial judge to conduct a “close consideration of the facts … in order to determine whether a claim to relief has been established”. On appeal, it is also essential for the appellate court to scrutinise the trial judge’s findings and assess any challenge to the trial judge’s conclusions in light of the advantages enjoyed by that judge.
42.In Kakavas v Crown Melbourne Ltd, quoting with approval from the judgment of Dawson, Gaudron and McHugh JJ in Louth v Diprose , this Court described how the “proof of the interplay of a dominant and subordinate position in a personal relationship depends, ‘in large part, on inferences drawn from other facts and on an assessment of the character of each of the parties’”. As Rich J said, in the context of a claim to set aside a transaction, the advantage of the trial judge “of seeing the parties and estimating their characters and capacities is immeasurable”. These matters led Toohey J, in Louth v Diprose, to say that the “formidable obstacles” involved in an attack on findings of fact by a trial judge “may be enhanced where issues of undue influence and unconscionability are involved”.
43.Related to the fact finding advantage of the trial judge is the evaluative nature of the judgment involved in determining whether the vitiating factors have been established. For example, in undue influence there will be questions of evaluative judgment involved in assessing whether the extent to which a person’s will has been subordinated to another’s is sufficient to characterise the person as lacking free will. The same evaluative exercise was described by this Court in Kakavas v Crown Melbourne Ltd in relation to unconscionable conduct, quoting from Dixon CJ, McTiernan and Kitto JJ in a passage from Jenyns v Public Curator (Qld) which emphasised how the application of these equitable principles: “calls for a precise examination of the particular facts, a scrutiny of the exact relations established between the parties and a consideration of the mental capacities, processes and idiosyncrasies of the [other party]. Such cases do not depend upon legal categories susceptible of clear definition and giving rise to definite issues of fact readily formulated which, when found, automatically determine the validity of the disposition. Indeed no better illustration could be found of Lord Stowell’s generalisation concerning the administration of equity: ‘A court of law works its way to short issues, and confines its views to them. A court of equity takes a more comprehensive view, and looks to every connected circumstance that ought to influence its determination upon the real justice of the case’”.
44.The primary judge posed the hypothetical question of why Ms Thorne would sign an agreement when she understood the advice of her solicitor to be that the agreement was the worst that the solicitor had ever seen. The primary judge also asked why, despite the advice of her solicitor, Ms Thorne failed to conceive of the notion that Mr Kennedy might end the marriage. The primary judge found that the answer to these questions did not lie in Ms Thorne’s lack of proficiency in English. Instead, the primary judge attributed Ms Thorne’s beliefs and actions to matters of duress or undue influence.
45.The primary judge described duress as “a form of unconscionable conduct”. This description was not subsuming the vitiating factor of duress within the doctrine of unconscionable transactions, which would require a finding of special disadvantage and an unconscientious taking advantage of that special disadvantage. Her Honour was using “unconscionable” in the sense described by Gaudron, McHugh, Gummow and Hayne JJ in Garcia v National Australia Bank Ltd (95) as “to characterise the result rather than to identify the reasoning that leads to the application of that description”.
…
63.This appeal should be allowed on the basis that the Full Court erred in concluding that the primary judge’s reasons were not adequate and erred in overturning the primary judge’s conclusion that, in effect, Ms Thorne was subject to undue influence. As we have explained, it is not necessary to consider the operation of the vitiating factor of duress. This is particularly so in the absence of any detailed argument about the operation of a criterion for duress that the conduct of the dominant party is improper or illegitimate, and the absence of any findings by the primary judge or the Full Court on these matters. In contrast, the issues concerning unconscionable conduct were fully argued. For the reasons which follow, the Full Court also erred in its conclusion that Ms Thorne’s entry into the agreements was not procured by unconscionable conduct.
64.The Full Court recognised that Ms Thorne was labouring under a disadvantage, although the Court did not add the adjective “special”, which, as Mason J in Commercial Bank of Australia Ltd v Amadio explained, is used to emphasise that the disadvantage is not a mere difference in the bargaining power but requires an inability for a person to make a judgment as to his or her own best interests. The findings by the primary judge that Ms Thorne was subject to undue influence – powerless, with what she saw as no choice but to enter the agreements – point inevitably to the conclusion that she was subject to a special disadvantage in her entry into the agreements.
65.Ms Thorne’s special disadvantage was known to Mr Kennedy. Her special disadvantage had been, in part, created by him. He created the urgency with which the pre-nuptial agreement was required to be signed and the haste surrounding the post-nuptial agreement and the advice upon it. While Ms Thorne knew Mr Kennedy required her acknowledgment that his death would not result in her receiving a windfall inheritance at the expense of his children, she had no reason to anticipate an intention on his part to insist upon terms of marriage that were as unreasonable as those contained in the agreements. Further, Ms Thorne and her family members had been brought to Australia for the wedding by Mr Kennedy and his ultimatum was not accompanied by any offer to assist them to return home. These matters increased the pressure which contributed to the substantial subordination of Ms Thorne’s free will in relation to the agreements. Mr Kennedy took advantage of Ms Thorne’s vulnerability to obtain agreements which, on Ms Harrison’s uncontested assessment, were entirely inappropriate and wholly inadequate. Even within that class of agreement, the agreements which Ms Thorne signed involved “gross inequality”.

Gordon J, joined with the plurality in the decision, but delivered separate reasons. In those reasons for the purposes of this case, in regard to the law of unconscionability there is no difference in the requirements of Gordon J and the plurality. At paragraphs [109-123] Gordon J observed (citations omitted):
109.Unconscionable conduct “looks to the conduct of the stronger party in attempting to enforce, or retain the benefit of, a dealing with a person under a special disability in circumstances where it is not consistent with equity or good conscience that he should do so”. The rationale of the doctrine is “to ensure that it is fair, just and reasonable for the stronger party to retain the benefit of the impugned transaction”.
110.Whether equity will intervene to prevent a party from enforcing, or retaining the benefit of, a transaction is determined by examining the circumstances under which the parties entered into the transaction. Specifically, the equitable jurisdiction is engaged if, when the transaction was entered into: (1) one party was under a special disadvantage in dealing with the other party; and (2) the other party unconscientiously took advantage of that special disadvantage. The existence of those circumstances at the time of the transaction is what “affect[s] the conscience” of the stronger party and renders the enforcement of the transaction, or the taking of the benefit, “unconscientious” or “unconscionable”.
111.That understanding of the equitable doctrine of unconscionable conduct is of long standing. In Blomley v Ryan, Kitto J described the circumstances in which equity would intervene on the basis of “unconscientiousness” in the following terms:
“The essence of the ground we have to consider is unconscientiousness on the part of the party seeking to enforce the contract; and unconscientiousness is not made out in this case unless it appears, first, that at the time of entering into the contract the defendant was in such a debilitated condition that there was not what Sir John Stuart called ‘… a reasonable degree of equality between the contracting parties’; and secondly, that the defendant’s condition was suffıciently evident to those who were acting for the plaintiff at the time to make it prima facie unfair for them to take his assent to the sale. If these two propositions of fact were established the burden of proving that the transaction was nevertheless fair would lie upon the plaintiff.” (Emphasis added.)
112.To similar effect, Mason J in Amadio identified the circumstances in which the equitable jurisdiction would be enlivened as follows (178): “As we have seen, if A having actual knowledge that B occupies a situation of special disadvantage in relation to an intended transaction, so that B cannot make a judgment as to what is in his own interests, takes unfair advantage of his (A’s) superior bargaining power or position by entering into that transaction, his conduct in so doing is unconscionable.” (Emphasis added.)
113.It is not possible to identify exhaustively what amounts to a special disadvantage. Relevant matters may include “illness, ignorance, inexperience, impaired faculties, financial need or other circumstances” that affect the weaker party’s ability to protect their own interests. Those matters are illustrative, not exhaustive. A special disadvantage may also be discerned from the relationship between parties to a transaction; for instance, where there is “a strong emotional dependence or attachment”. Whichever matters are relevant to a given case, it is not sufficient that they give rise to inequality of bargaining power: a special disadvantage is one that “seriously affects” the weaker party’s ability to safeguard their interests.
114.Retaining a benefit conferred under a transaction, or seeking to enforce a right or obligation under a transaction, cannot attract the intervention of equity without the existence of some factor that affects the conscience of the stronger party. Once it is accepted that (1) the doctrine of unconscionable conduct seeks to identify that factor in the wrongful (scil “unconscientious” or “exploitative” conduct of the stronger party, and (2) a person commits no wrong per se by retaining a benefit or seeking to enforce a right or obligation obtained through a lawful transaction, then the basis for equitable intervention must reside in some defect in how the dealing was entered into. That defect will exist if the special disadvantage was sufficiently evident to the stronger party at the time of the transaction to make it unconscientious to procure or accept the assent of the weaker party.
115.Although the doctrine of unconscionable conduct bears some resemblance to the doctrine of undue influence, there is an important difference between the two doctrines. As Mason J explained in Amadio, that difference concerns the will of the innocent party. For unconscionable conduct, “the will of the innocent party, even if independent and voluntary, is the result of the disadvantageous position in which [the innocent party] is placed and of the other party unconscientiously taking advantage of that position”. By contrast, for undue influence, “the will of the innocent party is not independent and voluntary because it is overborne”.
(emphasis added)
Unconscionable conduct in this appeal
116.The primary judge’s factual findings and reasoning did not specifically address whether Ms Thorne was under any special disadvantage or disability. But a special disadvantage may be discerned from the relationship between the parties and the findings of fact in this case require a conclusion that Ms Thorne was under a special disadvantage at the time of each agreement. In relation to the first agreement, that special disadvantage arose from the circumstances in which Mr Kennedy brought Ms Thorne to Australia, the proximity of the wedding and the circumstances in which the agreement was first provided, coupled with the finding that Ms Thorne knew that the wedding would not take place (and the relationship would be at an end) if she did not sign the agreement.
117.Moreover, Ms Thorne plainly depended on Mr Kennedy both financially and emotionally, was emotionally invested in their relationship and expected a future life with him. It is eminently plausible that she would have been unusually susceptible to entering into an “improvident transaction” with Mr Kennedy if she felt that doing so would ensure, or was necessary to ensure, that their relationship continued and that any adverse consequences of ending the relationship were avoided.
118.The force of these conclusions is not lessened by observing that Ms Thorne signed the second agreement after they married. Save that the wedding had occurred by that point, the factors identified above as constituting a special disadvantage could hardly be thought to have dissipated immediately after they married. The wedding did not, of itself, relieve her of the special disadvantage she was under when she entered into the first agreement. Indeed, when Ms Thorne was meeting with her solicitor for the purpose of receiving advice about the second agreement, Mr Kennedy not only sat in the car but telephoned her to ask how much longer she was going to be. And, as the primary judge found, Ms Thorne had no bargaining power and no capacity to effect any change.
119.Accepting that Ms Thorne was placed at a special disadvantage, the question becomes whether Mr Kennedy unconscientiously took advantage of it.
120.Plainly, Mr Kennedy, as the other party to the relationship, not only was aware of, but played a central role in creating, the various factors constituting the special disadvantage. And having regard to the circumstances in which they were entered into and their content, the financial agreements were “neither fair nor just and reasonable” and the entry into them involved an unconscientious taking of advantage by Mr Kennedy.
121.First, the agreements were “grossly improvident”. Although it is not essential or necessarily decisive that there is “an inadequacy of consideration”, it is relevant to observe that the entitlements for which they provided in the event of separation were extraordinarily and disproportionately small in comparison to what Ms Thorne would have been entitled to if she had not entered into the agreements.
122.Second, the circumstances in which the agreements were entered into support the conclusion that Mr Kennedy’s procurement or acceptance of Ms Thorne’s assent to each agreement was unconscientious. True it is that some kind of agreement or “paper” relating to Mr Kennedy’s wealth had long been in the contemplation of the parties, and that Ms Thorne was not under any relevant misapprehension as to the effect of each agreement (195). However, having brought Ms Thorne to Australia promising to look after her like “a queen”, it was not until two weeks before the wedding that Mr Kennedy arranged for Ms Thorne to receive legal advice; and it was not until ten days before the wedding that she received detailed information about his finances and became aware of the specific contents of the first agreement.
123.It is not a sufficient response to the conclusion of unconscionable conduct to point to the fact that Ms Thorne received independent legal advice about the two agreements and chose to reject her solicitor’s recommendation on each occasion. The fact that Ms Thorne was willing to sign both agreements despite being advised that they were “terrible” serves to underscore the extent of the special disadvantage under which Ms Thorne laboured, and to reinforce the conclusion that in these circumstances, which Mr Kennedy had substantially created, it was unconscientious for Mr Kennedy to procure or accept her assent.
Hence, as was common ground for the parties, it is clear that there must be, for the unconscionability ground, a special disadvantage and the other party must unconscientiously take advantage of that. I note that, in the matter of Chaffin, Foster J found that one party had, in that case, acted legally and morally in an unconscionable manner. I do not make any findings in this case as to any moral imputation against the husband. I am confining myself to the concept of legal unconscionability and not making moral judgments, largely in deference to the efficient manner in which counsel conducted the case where judgments of immorality were not advanced.
THE CIRCUMSTANCES OF THE FINANCIAL AGREEMENT
The Wife’s evidence in her affidavit filed 7 April 2021 included the following:
19.The Respondent and I were married in a civil ceremony in 2010. Shortly before we married, the Respondent pressured me to sign a Financial Agreement on in 2010. My Visa was expiring, and the Respondent gave me an ultimatum saying that we would not be married, and I would consequently have to leave Australia, unless I signed the Financial Agreement. The Respondent told me that all of his friends were divorced, and they were in a bad financial position because of their ex-wives, as their exes took almost all the money. He told me that as long as we were in a relationship, the Financial Agreement would not have any effect and that he would look after me. I trusted the Respondent and was dependent on him to ensure that I could remain in Australia, so I signed the Agreement. At the time I signed the Agreement, I was not able to read or write English well. I address the circumstances prior to my signing of the Financial Agreement in the following paragraphs of this my Affidavit.
…
27.At night, X would cry every couple of hours for milk, so that I was not able to sleep. During the day, I had to undertake all the chores, cook, clean, prepare dinner for the Respondent and ensure everything was neat and tidy so as not to aggravate the Respondent. I was exhausted and scared. Every time X cried, I became terrified of how the Respondent would respond. I was always on edge and anxious.
28.By 2 July 2020, the physical and mental exhaustion had become so severe that my GP recommended that I be admitted to the Mother-Baby Unit at Suburb B Hospital for respite. While at the hospital, I disclosed to the nurses about how the Respondent would abuse me during the relationship. They referred me to the police. I made a statement to the police and the police applied for an Intervention Order on my behalf for my safety and wellbeing.
…
55.I had been living with the Respondent since 2009, and I had already invested tens of thousands of dollars from my savings, which my parents gifted to me for the purpose of my education, towards the Respondent's bills, our relationship and living expenses. The Respondent told me that he 'loved' me and that he would 'not hurt' me if I lived with him and that he wanted me to 'stay in Australia, with him'.
56.My Visa was set to expire by 2011 and the Respondent told me that he would marry me, so that I could remain in Australia. Shortly before our wedding, the Respondent said that he would only continue with the marriage if I signed a 'prenup '. I loved the Respondent as he was the first man to show me any real affection. I trusted the Respondent and I also had no choice – if I wanted to stay in Australia, I was not able to continue to extend my student visa and had to get married to the Respondent. I did not know what a 'prenup' was, other than a casual understanding that it was a document which people signed before they got married to protect their assets. Now annexed hereto and marked with the letters "-5" is a copy of my VISA.
57.Neither the Respondent nor I had any substantial assets, so I did not give it much further thought. At first, I ignored the Respondent and we proceeded with the Notice of Intended Marriage papers and registrations required to continue with our marriage. My parents were in China and did not support my relationship with the Respondent as they wanted me to complete my studies and return to China. In fact, when my mother found out that I was contemplating marriage with a man who was 23 years older than me, my mother stopped providing financial assistance to me and told me to return to China. My mother stopped talking to me, and did not talk to me for more than half a year. I remember that I used to cry every day. The Respondent told me that everything would be ok and that he would look after me and protect me. I trusted him entirely and he made me feel safe. I did not have any support or family in Australia. My parents were not aware that I had quit my studies and had used their finances for living expenses for the Respondent and I.
58.Once again, in 2010, a few weeks before our wedding, the Respondent gave me an ultimatum and said that, ‘if you don’t sign the agreement, we won’t get married’. He handed me the agreement that his lawyer had prepared and which he had already signed. This time, the Respondent was a lot more insistent and explained that many of his friends had separated and their ex-partners had taken lots of money and that the Respondent wanted to protect himself. He reassured me and said that he still loved me and that I could trust him, but that he would not proceed with the marriage unless I signed the agreement. I believe that the Respondent was considering the protection of his inheritance, even at that stage, because we had no money and, as far as I was aware, the Respondent did not have any substantial assets or savings either. We were living in financial destitution while we were caring for the Respondent's mother.
59.At that stage in our relationship, I loved the Respondent and believed that he would look after me and do the right thing to be fair to me. I distinctly recall looking at the agreement, but not really being able to understand it. My English was very bad, so I went online to search for a lawyer to help me. My lawyer, MS F, told me that the agreement meant that if I separated from the Respondent, that I would not get anything. I told my lawyer that I would sign the agreement anyway, and I did not explain to my lawyer that I had no choice, that if I did not sign, I would be deported to China and would lose everything that I had been building in my relationship with the Respondent. I paid my lawyer $150.00 in cash, signed the agreement and gave the original copy to the Respondent. I did not attempt to negotiate the Financial Agreement, but I trusted the Respondent to be fair to me and signed the agreement.
60.I secured my Permanent Residency in Australia in 2013. I secured my Australian Citizenship in 2015.
Paragraph 5-6 of the Husband’s affidavit filed 26 May 2021 are set out below:
5.The wife was concerned that her student Visa would either expire or be suspended unless we married. I did tell her that I would prefer that we entered into a Binding Financial Agreement as I wished to protect my family 's home that had been inherited by me by my parent's hard work throughout all the years they were in Australia. I deny putting any pressure or placing any other obstacles before the wife in the preparation and execution of the Binding Financial Agreement. The wife herself deposes to attending upon a Chinese speaking solicitor who signed the Certificate of Independent Legal Advice. So even if the wife did have any concerns regarding understanding and or reading the Agreement , it would have been explained to her I'm assuming in either the Chinese or English language by her solicitor .
6.I therefore submit that the wife has no legal basis to have the Binding Financial Agreement set aside. Accordingly, I say to this Honourable Court has no jurisdiction to make any other orders save and accept the preservation of the assets of the marriage until such time as the said Agreement is set aside and declared not to be legally enforceable. . However, I maintain that the Binding Financial Agreement is valid and ought not to be set aside by this Honourable Court.
In this case consistent with the requirements of unconscionability in Thorne & Kennedy and the long history of what is required for unconscionability, the circumstances that the Wife was in, although not depriving her of her free will, left her with no real choice. I note that the evidence in this case is not on all fours with Ms Thorne in that case as to the disadvantage. However, the common ground situation was that the Wife's visa would not be extended so that she could remain in Australia unless the parties married. She would be returning to her country of origin. The consequences of not marrying would be that there would be a significant change in a very important relationship and she would not marry. I note and accept her evidence as to the difficulty that she was in.
The Wife was in an established and committed de facto relationship, and that relationship was important to her. Absent marriage and absent the signing of the agreement, the relationship would end at least for some considerable time and the marriage would not occur. The Wife's return to China would likely be returning to the environment of her parents, who so strongly disapproved of the Wife's relationship with the Husband, to which the Wife was devoted, that they had stopped speaking and ceased to provide financial assistance to her.
The substance of the agreement is as follows (see Wife’s affidavit filed 7 April 2021):
3.That in the unfortunate event of a breakdown of the relationship of Mr Kovacs and Ms Kovacs:
(a)Ms Kovacs shall make no claim to the assets and financial resources of Mr Kovacs as set out in Schedule A hereto nor shall Ms Kovacs make any claim upon the assets which may have been purchased from the proceeds of sale or investment of income of such of the assets of Mr Kovacs.
(b)Mr Kovacs shall make no claim to the assets and financial resources of Ms Kovacs as set out in Schedule B hereto nor shall Mr Kovacs make any claim upon the assets which may have been purchased from the proceeds of sale or investment of income of such of the assets of Ms Kovacs.
(c) Neither party will lay claim to:
(i)any property purchased solely by the other party during the term of this agreement from their own resources;
(ii)any inheritance, benefit, gift or financial advantage obtained by the other party at any time in the future .
(iii)any bank account, fund held in trust, private or public companies and/or contingent asset of the other party, unless such bank account, asset or financial advantage is in the joint names of the spouse parties.
4.The parties will have the full right to own, control, dispose, mortgage, transfer or otherwise deal with their separate property.
Joint Property:
5.Upon a Separation Declaration complying with Section 90DA of the Family Law Act 1975 being forwarded by one party to another, then each party agrees:
(i)not to charge, dispose of, damage or otherwise deal with any jointly owned assets without the consent of the other;
(ii)that they will dispose of their jointly owned property by agreement. If no agreement is reached within 90 days of separation, their jointly owned property shall be sold and the proceeds divided between them on a 50/50 basis unless otherwise provided in this agreement.

I acknowledge that the agreement did provide, as I pointed out to counsel, that, were the parties to jointly acquire any property, that would be divided equally between them. On the evidence, such an event was, whilst a theoretical possibility at the time of the agreement, unlikely. The effect of the agreement, save for the serendipitous circumstance of the acquisition of joint property, was that, whether the marriage endured for five or 10 or 20 or 30 years, or whether there were no children or one or two or three children, and regardless of the need and circumstances of either of the parties but in particular the wife following separation, she would not receive any or be entitled to agitate for any property settlement at all.
FINDING AS TO SECTION 90K(1)(e): UNCONSCIONABLE CONDUCT
Recited in that manner, those circumstances demonstrate the improvident and enormously disadvantageous nature of the agreement to the Wife and, in that sense, is not dissimilar to what the court found was disadvantageous provisions in Thorne & Kennedy. In Thorne & Kennedy, there was expert evidence that demonstrated that, the agreement was improvident and, indeed, an experienced solicitor deposed was the worst she had ever seen. From my experience, agreements such as the one here are not uncommon; however, the very terms of the agreement and the potential length for which it operates is one matter that indicates its significant disadvantage to the wife and the fact of it being an improvident agreement.
As it turns out, by the time of separation some 10 or so years after the signing of the agreement, the parties had not acquired any assets together. At first blush, the concept of each keeping what they brought in, certainly when the parties have only been in a relationship for a short time and they do not have children, seems reasonable. I do not make any moral judgment or other judgment about the Husband of seeking to apply such a concept or, indeed, believing in it. But that such a concept would continue no matter what, or for how long, is what makes the agreement, in the words of Gordon J, "inappropriate and inadequate", and I will refer to and repeat paragraphs 117 and 121 of Gordon J's judgment cited above.
I also find that part of the circumstances surrounding the agreement included that the parties were in an important and significant intimate relationship. That important relationship was what was once described as "living as man and wife although not married to each other" or "living as a couple on a genuine domestic basis". It cannot seriously be questioned this society regards such relationships as very important: to society and to the individuals concerned. Our law recognises, as indeed the relevant part of the Act recognises, the importance of those relationships. But it's not only the Act. References of the importance of de facto relationships are pervasive in the law of the land and includes wills and estate legislation including intestacy, including social security, including superannuation laws and superannuation deeds.
Such a circumstance was what the parties found themselves in. That relationship was very important to the Wife and, I infer, also important to the husband. In addition to that, there was the circumstance that there was the prospect of marriage, albeit the prospect of marriage was brought about, or at least accelerated by the consequence that, on or soon after the following January, the Wife would have to leave the country and I refer to that part of her evidence recited above. I find that, for this couple, the relationship they had was very important and that the marriage was very important.
I find that the circumstance for the Wife of living in the country that she wished to live in, where she was on her way to obtaining permanent residence and ultimately citizenship, was also very important. The choice of a country in which to live is very important to an individual and, in this case, was important to the Wife; and, generally speaking, is part and parcel and makes up who a person is. The circumstance that the Wife would not be imprisoned or brought to account or punished were she to return to China, as she would have been compelled to, is not to the point. What the Wife would have lost, had she not been able to remain in Australia, was her very sense of who she wanted to be. That was an Australian resident living in an important intimate relationship, married to the Husband.
The circumstances were that the agreement was presented to the Wife already signed by the Husband. When the issue of a financial agreement was first raised, the Wife's evidence was to the effect that she let it pass. However, after the marriage was planned and in place, it was raised again. I accept that evidence. Although there is no evidence of the extent of the planning, the marriage was fixed for 2010.
A few weeks prior to that, and I find that it must have been after 1 October and before 6 October, the Husband presented to the Wife the actual agreement already signed by him and already with a certificate of advice. What is crystal clear from that circumstance was that it was not just any financial agreement that the Husband wished the Wife to sign, but that financial agreement. The consequence of that is, when reference is made to the six factors of prominence that are referred to in the plurality's judgment of Thorne & Kennedy at [60], is that the agreement was proposed on the basis that it was not subject to negotiation. It was that agreement that the Wife was requested to sign, and I find requested to sign in the circumstances that, unequivocally, the Husband would not marry the Wife were she not to sign that. Hence, in considering the first of those six factors, it was offered on the basis that it was not subject to negotiation.
I have referred to the emotional circumstances in which the agreement was entered, that is, the parties' devotion to each other and in particular the Wife's devotion to the Husband, and the circumstance that there was not so much an explicit or implicit threat, as I do not regard the husband as threatening the Wife, but it was simply a fact that he told her, and I accept was genuine in it, that he would not marry her unless that agreement was signed. Hence, in the sense of the second of those six prominent factors, that one is well made out.
The third is whether there was any time for careful reflection. In the circumstances where the Wife was presented with the agreement on 1 October but was at her solicitor's office on 6 October, the reality was there was not any time for careful reflection. The Wife saw the lawyer and signed it there and then. It may be that the Wife and/or the solicitor could have turned their minds to something like the lines of, "Well, what's the date for marriage? Let's think about this. Let's consider it next week." In fact, that did not occur. Hence, I cannot find that, in this case, there was no time for careful reflection. There was some time for careful reflection.
I have also already addressed the nature of the parties' relationship, and that was, as I have described, an intimate de facto relationship with all the aspects that go with it.
The next aspect is the relative financial positions of the parties. As of the time of the agreement, on the Wife's view the Husband had just commenced secure employment and there was no challenge to that, but was cited in the agreement was that he was unemployed. In either case, he had either been unemployed or engaged in the care of his mother for some time, or had just started employment.
The Wife had no assets of any significance, and I will deal with the $80,000 separately in a moment, and was dependent upon the Husband for her accommodation, that is, the very home in which she lived. She had a home to live in because she was in the relationship with the Husband. He was, at the time of the agreement, not the owner of that property, but it was within his domain and control and his reasonable expectation was that, upon the inevitable demise of his mother, he would inherit it. Hence, notwithstanding that, on first brush, neither party had any assets, the Husband was in a superior financial position to the Wife.
In terms of that position, I now touch on part of the Wife's case that I do not accept. It is a significant part of the Wife's case in submissions that her speaking English as a second language, as it was at 2010, not now in 2022, is a significant matter as to her disadvantage. As set out in the cross-examination of the Husband's counsel, the circumstances are that the Wife, for the serious and important purpose of these proceedings, consults a solicitor who does not speak her native tongue and they converse in English. The Wife's affidavits were deposed in English. The Wife did not seek the assistance of an interpreter. The choice of the solicitor meant that the Wife had available to her the explanation of the agreement in her native language in addition to her adopted language of English. In fact, the Wife is unable to recollect in which language the document was explained to her. I don't have any reliable evidence whether or not the agreement was completely read to the Wife from start to finish; nonetheless, and in the circumstances of the Wife having some limited English as a second language training, but in the circumstances of this being a country of migrants and the wife's intelligence and diligence in getting on with life in Australia, I am unable to find that the Wife's English-speaking or reading and writing English ability being significantly less than a native speaker is a significant matter to her disadvantage and for the relative positions of the parties.
I take into account the 6^th factor of prominence, that is, that independent advice was received and, on the evidence I have as to the effect of the agreement, and I accept the certificate of advice attached to the agreement. The dynamics that are evident between the wife and the person who gave that certificate is that, whether or not there was the opportunity, that opportunity to reflect on the consequence of the agreement, was not taken. I find that that is because of the other circumstances that the Wife was in. She wished to continue that relationship. She wished to marry that man. She wished to remain in Australia, her adopted country, and would not be able to continue to do so if she were not married, and she would not be able to marry unless she signed that agreement. The combination of those circumstances, notwithstanding that I do not accept the argument or the contentions, as to the Wife's language ability, convince me that the Wife was in a position of special disadvantage vis-à-vis herself and the Husband.
I then find that it was unconscionable for the husband to take advantage of that circumstance. All of those circumstances were known to him. This was not an agreement entered into in the sense of the parties freely, without pressure. The Husband says, "I did not apply pressure," and in the sense that there is no evidence that he was forceful or nagging to the Wife. The circumstances mean that the Wife was under pressure, and he knew it, and he had the opportunity there and then to put in place an agreement that was for his advantage to protect his assets, and he grasped that opportunity and took it. I make no moral judgment about the Husband in that circumstance and I acknowledge the point made by his counsel that what he did was entirely legal. There was not illegality to what he did. But, as a matter of law, in all of the circumstances, there was unconscionability.
FINDING AS TO SECTION 90K(1)(d): CHANGED CIRCUMSTANCES AND HARDSHIP
I also find that the ground in regard to section 90K(1)(d) of the Act, that is, the hardship provision, is made out. The hardship is the circumstance that there has been a child born to the Wife and the Husband. Now separated, the Wife is in poor health and I find unable to engage in paid employment; and, were she so able to engage in paid employment, that employment would be limited by the circumstances of her care for the child and the child's young age; or, as the Wife asked in evidence, "How can I work when I have to care for the child in the circumstances of the child being sick from time to time and simply being a child?"
I note the time and I am going to have to shorten these reasons more than I intended to however, the circumstances of the birth of the child and the Wife not having other assets and income available to her, do satisfy the condition that there has been a material change of circumstances. As a result of that change, the birth of the child, she having caring responsibility for the child, the wife will suffer hardship if the agreement is not set aside.
I note the discussion between counsel where the range is of the potential outcome of the case were discussed. On the Husband's case, if there was jurisdiction, the Wife's entitlement in a pool of some $900,000, being the equity in the unencumbered home, is somewhere between 15 and 20 per cent, and on the Wife's counsel's submission it is somewhere between 35 and 40 per cent. I have not been addressed sufficiently or spent sufficient time to make particular findings about that; however, I will accept the worst and best cases, or best and worst cases for each party, that the effective position with the agreement and without the agreement is that there is, effectively, no asset pool to determine if the agreement is in place, and, otherwise, an agreement of something in the order of $900,000 plus some $75,000 of superannuation.
On the range of case, it is not only that there will not be an asset pool to determine but that the Wife will, with the agreement in place, receive no property settlement, and with the agreement set aside, will receive some sum or assets between, roughly, the $135,000 best case for the Husband and the $350,000 worst case as put for the Wife. In the circumstances where the Wife is otherwise "skint" and does not have assets, for her to be deprived or not have the advantage of that sum of money whilst caring for the child does mean she will suffer hardship, and I am particularly making that comparison, as I am compelled to do by Fewster & Drake.
CONCLUSION AS TO AGREEMENT
Hence, the agreement will be set aside. It is set aside, firstly, in regard to the hardship ground, and I have addressed the unconscionability ground on the basis that, if I am wrong about that, I think the parties should know, and any court reviewing it should know, my findings in regard to the unconscionability ground as well. So I find that the Wife's case is made out on both those grounds.
SPOUSAL MAINTENANCE
In regard to the spousal maintenance aspect, I have had careful regard to the parties' financial statements. The Wife's expenses are now some $76 per week more than what they were. When the Husband's expenses are analysed and the car expenses are taken from that, the expenses of what he is spending for his keep at the moment is almost the same as the Wife's. The reality is both live most modest lives by community standards. The Husband's expenditure on his current income and I note that none of the circumstances were challenged, means that there is already a deficiency in his income and expenses. The Wife's circumstances in regard to spousal maintenance must be considered without having regard to her social security considerations.
In regard to her financial statement, it must be adjusted to take account of the $150 in child support that is currently paid. Nonetheless, I am well satisfied that the Wife cannot support herself without an income-tested pension or benefit. Even with the income-tested pension or benefit, to which I cannot have regard for the maintenance test, the Wife's circumstances are financially very difficult and straitened.
I note that, due to circumstances of injury, the husband consults a doctor and has been on light duties for some time and has not had bonuses and overtime once available to him, hence, he has a modest income. The Husband's reasonable expenditure exceeds his income. There is one significant difference in that the husband has a secure home and does not have to pay rent, but has to pay insurances, rates and so on. Nonetheless, his circumstances are superior. I accept the submissions made in the outline of case, that a maintenance application does not only look at income but must look at assets as well. I was referred to and apply the principal stated at [56] of Maroney & Maroney [2009] FamCAFC 45 where the Full Court observed:
[56]To the extent that it might be asserted on behalf of the husband that the learned Federal Magistrate was precluded from making an order which, on the evidence before him, could only be satisfied by borrowing money or realising capital, such challenge cannot succeed. The “capacity” to meet an order for interim spousal maintenance is not confined to income. Once a party, such as the wife in this case, establishes an entitlement to interim spousal maintenance, and such entitlement is quantified in accordance with that spouse’s reasonable needs, an order may be made notwithstanding that the liable spouse could only satisfy the order out of capital or borrowings against capital assets.
I find that the wife has a need for spousal maintenance and of some hundreds of dollars per week.
The Husband does not have the capacity to pay that from income. He can only pay maintenance from borrowing against the equity in the home. The issue on this interim hearing, on this aspect, is whether I should compel him to do so. In all of the circumstances, I have determined that I am not satisfied that the Husband will be able to borrow in the immediate future for the purpose solely of providing for the Wife's maintenance. In all of those circumstances, on this interim hearing, I am not satisfied that it is appropriate to make a spousal maintenance order when I will be compelling the Husband to borrow to do so. I note the Husband's financial statement had some modest savings in it at the time it was sworn last year. Nonetheless, I am not satisfied on this interim hearing that, notwithstanding the severe privation and circumstances the Wife is in, that I should compel the Husband to do that on this interim hearing, on the evidence that I have before me. I am not prepared to make an order that I am not satisfied the Husband will be able to comply with by borrowing or drawing on those resources.
I note that I accept the Wife's evidence in regard to the explanation for the (soon after separation) $80,000 coming from her bank account in the context of there is no surprise about the issue of the sponsoring of the Wife's parents and the husband being party to that: However, I also accept the Husband’s evidence that he did not learn of the precise details of the $80,000 until those documents were discovered in these proceedings. Nonetheless, I find that that was not the wife's money. That was properly her parents' money that was always intended to be applied to the purposes of their visa for Australia.
CONCLUSION AS TO PROCEEDINGS
Hence, to conclude, I will not be making an interim spousal maintenance order.
I will be setting aside the agreement. I will not be making the declaration as sought by the Husband and I will direct the parties to bring in orders for directions to give effect to these reasons for final hearing. They are my reasons.
The day following these orders and reasons, the parties provided minutes of orders including trial directions and trial directions were made in chambers.

I certify that the preceding eighty-five (85) numbered paragraphs are a true copy of the Reasons for Judgment of Judge O'Shannessy.
Associate:
Dated: 24 February 2022

File number:	MLC 3807 of 2021
Judgment of:	JUDGE O'SHANNESSY
Date of judgment:	3 February 2022
Catchwords:	FAMILY LAW – application to set aside financial agreement – section 90K(1)(d) hardship – section 90K(1)(e) unconscionability – interim spousal maintenance application – applicant unable to support herself – agreement did not provide for birth of a child – improvident agreement – agreement set aside.
Legislation:	Evidence Act 1995 (Cth) s 140 Family Law Act 1975 (Cth) ss 4AA, 90K(1)(d), 90K(1)(e)
Cases cited:	Beroni & Corelli (2021) FLC ¶94-004 Chaffin & Chaffin [2019] FamCA 260 Corelli & Beroni [2019] FamCA 911 Daily & Daily (2020) FLC ¶93-999 Fewster & Drake (2016) FLC ¶93-745 Fox & Percy (2003) 214 CLR 118 Frederick & Frederick (2019) FLC ¶93-900 Kakavas v Crown Melbourne Ltd (2013) 250 CLR 392 Kapsalis & Kapsalis [2017] FamCA 89 Kennon & Kennon (1997) FLC ¶92-757 Maroney & Maroney [2009] FamCAFC 45 Pascot & Pascot [2011] FamCA 945 Thorne & Kennedy (2017) 263 CLR 85
Division:	Division 2 Family Law
Number of paragraphs:	85
Date of hearing:	2 February 2022
Place:	Melbourne
Counsel for the Applicant:	Mr P Testart
Solicitor for the Applicant:	JosephDavid Lawyers
Counsel for the Respondent:	Mr P Indovino
Solicitor for the Respondent:	MDM Lawyers

MLC 3807 of 2021
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN:	MS KOVACS Applicant
AND:	MR KOVACS Respondent

ORDER MADE BY:	JUDGE O'SHANNESSY
DATE OF ORDER:	3 FEBRUARY 2022