LEUNG & FAN

Case [2020] FCCA 764


FEDERAL CIRCUIT COURT OF AUSTRALIA

LEUNG & FAN [2020] FCCA 764
Catchwords:
FAMILY LAW – Pre-marriage financial agreement – property – maintenance – application to set aside financial agreement – whether a financial agreement – whether agreement void, voidable or unenforceable – allegations of duress withdrawn – allegations of undue influence withdrawn – unconscionable conduct – applicable principles – Thorne v Kennedy (2017) 263 CLR 85 distinguishable – whether applicant at special disadvantage – whether disadvantage seriously impeded applicant’s ability to make decision to enter agreement – whether improper advantage taken – where parties each attended upon independent lawyer and obtained advice – certificates issues by lawyers – forensic onus not discharged – application to set aside agreement refused – whether agreement binding – declare agreement void insofar as it purported to exclude or limit the power of a court to make an order for maintenance – orders permitting applicant to amend application to pursue application for maintenance – orders permitting respondent to amend response to seek order that agreement binding.

Legislation:

Evidence Act 1995 (Cth), s.140
Family Law Act 1975 (Cth), ss.4, 71- 80, 90A – 90Q
Family Law Amendment Bill 2006
Federal Justice System Amendment (Efficiency Measures) Bill (No.1) 2009
Matrimonial Causes Act 1959 (Cth), s.87
Migration Regulations 1994 (Cth), regs.1214C, 1215

Cases cited:
ASIC v Kobelt (2019) 368 ALR 1
Australia & New Zealand Banking Group Ltd v Karam (2005) 64 NSWLR 149
Bell & Nahos [2016] FamCAFC 244
Black & Black (2008) FLC 93-357
Bridgewater v Leahy (1998) 194 CLR 457
Commercial Bank of Australia Ltd v Amadio (1983) 151 CLR 447
Equuscorp Pty Ltd v Glengallan Investments Pty Ltd (2004) 218 CLR 471
Fewster & Drake [2016] FamCAFC 214
Frederick & Frederick [2019] FamCAFC 87
Graham & Squibb [2019] FamCAFC 33
Hart v O’Connor (1985) 1 AC 1000
Hillas & Co Ltd v Arcos Ltd (1932) 43 Ll LR 359
Hoult v Hoult (2013) 50 Fam LR 260; (2013) FLC 93-546
Huguenin v Baseley (1807) 33 ER 526
Hyman v Hyman [1929] 1 AC 601

Jabour & Jabour [2019] FamCAFC 78

Jenyns v Public Curator (Qld) (1953) 90 CLR 113
Johnson v Buttress (1936) 56 CLR 113
Kakavas v Crown Melbourne Ltd (2013) 250 CLR 392

Kuglioski v Metrobus (2004) 220 CLR 363

Louth v Diprose (1975) 175 CLR 621
Meehan v Jones (1981) 149 CLR 571
Milavic & Banks (No.2) [2016] FamCA 884
Olson v Keefe (No.3) [2018] FCA 2001
Paciocco v Australia & New Zealand Banking Group Ltd (2015) 236 FCR 199
Paciocco v Australia & New Zealand Banking Group Ltd (2016) 258 CLR 525
Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355
Renard & Geach [2013] FCCA 617
Scott & Scott (No.3) [2019] FamCA 936
Squirrel Limited v Cadmon Advisory Ltd [2019] FCA 1006
Stanford v Stanford (2012) 247 CLR 108
Thorne v Kennedy (2017) 263 CLR 85
Tonto Home Loans Australia Pty Ltd v Tavares (2011) BR 29
Wallace & Stelzer & Anor [2013] FamCAFC 199

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AGLC
LEUNG & FAN [2020] FCCA 764
Case
[2020] FCCA 764
Decision Date

CaseChat Overview and Summary

In the Family Court of Australia, Judge A Kelly considered an application by the applicant to set aside a pre-marriage financial agreement made in 2009 between the applicant and the respondent. The applicant alleged unconscionable conduct in the formation of the agreement, having withdrawn allegations of duress and undue influence.

The court was required to determine whether the financial agreement was void, voidable, or unenforceable due to unconscionable conduct. Specifically, the court had to assess whether the applicant was under a special disadvantage that seriously impeded her ability to make a decision to enter the agreement, and whether the respondent took improper advantage of such a disadvantage. The court also considered whether the agreement complied with the formal requirements of the *Family Law Act 1975* (Cth), particularly section 90G.

The court reasoned that while the applicant had attended upon independent legal advice and certificates were issued, the forensic onus to prove unconscionable conduct had not been discharged. The court distinguished the present case from *Thorne v Kennedy* (2017) 263 CLR 85, finding that the applicant had not established a special disadvantage that was exploited. However, the court found that the agreement was not binding due to non-compliance with s 90G(1)(c) of the Act, as neither the applicant nor her solicitor received a statement signed by the respondent's solicitor following execution.

Consequently, the court declared that the agreement was void insofar as it purported to exclude or limit the court's power to make maintenance orders. The court also declared the agreement not binding due to the s 90G(1)(c) non-compliance. Orders were made permitting the applicant to amend her application to pursue maintenance and the respondent to amend his response to seek a declaration that the agreement is binding. The costs of the preliminary hearing were reserved.

Orders

Orders of the court

1.

Declare that insofar as cll.17 or 19 of the agreement made between the parties in 2009 (agreement) purport to exclude or limit the power of a court to make an order for maintenance, it is void.

2.

By 4.00pm on 1 May 2020, the applicant file and serve any Third Amended Initiating Application so as to pursue any application for maintenance.

3.

Declare that the agreement is not binding by reason of non-compliance with s.90(1)(c) of the Family Law Act 1975 (Cth) (Act) in that, following execution of the agreement, neither the applicant nor her solicitor was provided a statement signed by the solicitor who had proffered legal advice to the respondent in accordance with s.90(1)(b) of the Act.

4.

By 4.00pm on 15 May 2020, the respondent file and serve any amended Response so as to seek a declaration pursuant to s.90G(1B) of the Act, that the agreement is binding.

5.

Upon the preliminary determination of whether the agreement should be set aside, the application for such declaratory relief be dismissed.

6.

The costs of the preliminary hearing be reserved.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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