Logan & Logan
[2013] FamCAFC 151
FAMILY COURT OF AUSTRALIA
| LOGAN & LOGAN | [2013] FamCAFC 151 |
| FAMILY LAW – APPEAL – PROPERTY SETTLEMENT – Binding Financial Agreements – where the Federal Magistrate dismissed the wife’s application to have the parties’ financial agreement, made pursuant to s 90C of the Family Law Act 1975 (Cth) (“the Act”), dismissed or set aside – where on appeal the wife argued the Federal Magistrate should have found on the evidence that the wife had not received the requisite legal advice and thus the agreement was not binding – where the Federal Magistrate approached the matter on the basis that the wife bore the onus of proving she had not been provided with the requisite legal advice – where the Full Court determined in Hoult & Hoult (2013) FLC 93-546 that the onus of proof lies on the party who is seeking to establish that a financial agreement is binding – where the party seeking to rely upon the agreement produces in evidence a certificate signed by the other party’s solicitor, there is a forensic obligation on the other party (here the wife) to adduce evidence which would disprove or throw into doubt the inference or conclusion to be drawn from the certificate – where the Federal Magistrate erred in the application of the onus of proof rendering her decision unsafe – where it was not apparent how the Federal Magistrate was able to arrive at the finding that the wife’s evidence was insufficient to reasonably satisfy her Honour that s 90G(1)(b) of the Act had not been complied with – appeal allowed and matter remitted for rehearing. |
| Family Law Act 1975 (Cth) s 90G Federal Justice System Amendment (Efficiency Measures) Act (No. 1) 2009 (Cth) Federal Proceedings (Costs) Act 1981 (Cth) |
| Browne & Dunn (1894) 6 R. 67 Hoult & Hoult (2013) FLC 93-546 LC v TC (1998) FLC 92-803 Parker & Parker (2010) 43 Fam LR 548 Parker & Parker (2012) FLC 93-499 |
| APPELLANT: | Ms Logan |
| RESPONDENT: | Mr Logan |
| FILE NUMBER: | BRC | 4449 | of | 2010 |
| APPEAL NUMBER: | NA | 10 | of | 2012 |
| DATE DELIVERED: | 30 September 2013 |
| PLACE DELIVERED: | Adelaide |
| PLACE HEARD: | Brisbane |
| JUDGMENT OF: | May, Thackray & Strickland JJ |
| HEARING DATE: | 7 November 2012 and further written submission |
| LOWER COURT JURISDICTION: | Federal Magistrates Court |
| LOWER COURT JUDGMENT DATE: | 10 January 2012 |
| LOWER COURT MNC: | [2012] FMCAfam 12 |
REPRESENTATION
| COUNSEL FOR THE APPELLANT: | Mr Galloway |
| SOLICITOR FOR THE APPELLANT: | Speakman Lawyers |
| COUNSEL FOR THE RESPONDENT: | Mr George |
| SOLICITOR FOR THE RESPONDENT: | Porter Hulett Solicitors |
Orders
The appeal be allowed.
The order made by Federal Magistrate Terry (as she then was) on 10 January 2012 be set aside.
The proceedings wherein the wife seeks a declaration that the agreement dated 24 November 2008 be declared non-binding be remitted to the Federal Circuit Court for rehearing by a judge other than Judge Terry.
There be no order as to costs.
The Court grants to the appellant wife a costs certificate pursuant to the provisions of s 9 of the Federal Proceedings (Costs) Act 1981 (Cth) being a certificate that, in the opinion of the Court, it would be appropriate for the Attorney-General to authorise a payment under that Act to the appellant wife in respect to the costs incurred by the appellant wife in relation to the appeal.
The Court grants to the respondent husband a costs certificate pursuant to the provisions of s 6 of the Federal Proceedings (Costs) Act 1981 (Cth) being a certificate that, in the opinion of the Court, it would be appropriate for the Attorney-General to authorise a payment under that Act to the respondent husband in respect to the costs incurred by the respondent husband in relation to the appeal.
The Court grants to the parties costs certificates pursuant to the provisions of
s 8 of the Federal Proceedings (Costs) Act 1981 (Cth) being certificates that, in the opinion of the Court, it would be appropriate for the Attorney-General to authorise a payment under that Act to the parties in respect to such part as the Attorney-General considers appropriate of any costs incurred by the parties in relation to the new trial.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Logan & Logan has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
| THE FULL COURT OF THE FAMILY COURT OF AUSTRALIA AT BRISBANE |
Appeal Number: NA 10 of 2012
File Number: BRC 4449 of 2010
| Ms Logan |
Appellant
And
| Mr Logan |
Respondent
REASONS FOR JUDGMENT
Introduction
By Notice of Appeal filed on 6 February 2012 Ms Logan (“the wife”) seeks leave to appeal, and if leave is granted, to appeal against orders made by Federal Magistrate Terry on 10 January 2012, which dismissed the wife’s application to have the parties’ financial agreement, made pursuant to s 90C of the Family Law Act 1975 (Cth) (“the Act”), dismissed or set aside. The respondent to the application is Mr Logan (“the husband”) and he seeks to maintain the orders made by the Federal Magistrate.
In the event leave to appeal is granted and the appeal is successful the wife seeks an order that the Federal Magistrate’s orders of 10 January 2012 be set aside, a declaration that the wife did not receive the requisite advice prior to the execution of the agreement, and that the agreement signed by the wife on
24 November 2008 be declared non-binding or, in the alternative, set aside.
As can be seen, leave to appeal is sought by the wife. We are not convinced that leave to appeal is required and accordingly we will proceed directly to address the appeal. We indicate though that if leave to appeal is required we would have granted such leave.
Following the hearing of the appeal, another Full Court delivered judgment in Hoult & Hoult (2013) FLC 93-546. That decision dealt with similar issues to those that arose in this case, and accordingly by orders made on 2 August 2013 by the Regional Appeals Registrar submissions were sought from counsel as to the effect, if any, of that decision on this case. Both counsel took up this invitation with the wife’s counsel filing submissions on 23 August 2013 and the husband’s counsel filing submissions on 9 September 2013. The submission of the wife’s counsel was in effect that the decision of Hoult supports the argument that the appeal should be allowed, but the husband’s counsel submitted that it supported the dismissal of the appeal.
Background
The parties commenced cohabitation in 1984 and married in 1985.
The parties have two children, X born in 1991 and Y born in 1994. Since separation the children have lived with the husband.
During the marriage the parties operated a business, L Pty Ltd.
The parties separated on 26 September 2008. The separation was initiated by the wife, who had formed a new relationship, and came as a shock to the husband. The wife gave evidence that she felt guilty about what had occurred.
On 29 September 2008 the husband transferred a large sum of money from the business account into an account in his sole name.
Soon after separation the parties began to discuss property settlement. The wife gave evidence that it was the husband’s idea for him to retain the business and the house. The wife also alleged the husband had threatened to disclose her private emails and said if she wanted “out” it was going to “cost” her. It was the husband’s evidence that upon his discovery of emails between the wife and her new partner, the parties negotiated an agreement between themselves that the husband would pay the wife $20,000 and he would retain the business and the house. The husband denied ever threatening the wife.
Mr William York, a solicitor with Hopper Green & Associates, was subsequently engaged to prepare documents to bring the property settlement into effect. There was some disagreement between the parties as to who had engaged Mr York, however, Mr York’s file notes and the contents of the financial agreement confirmed Mr York treated the wife alone as his client, albeit the parties jointly attended three meetings with him.
The Federal Magistrate accepted the husband’s evidence that at the first meeting Mr York told the parties the amount of $20,000 was inadequate.
Mr York was later advised the parties had reached an agreement on an increased amount of $112,500 and he prepared a financial agreement, drafts of which were sent to the wife who suggested some changes. It was the husband’s unchallenged evidence that he never received any draft documentation or communication directly from Mr York.
It was common ground that prior to signing the agreement, the parties had discussions about the husband paying the wife an additional $250,000 contingent upon the occurrence of certain events, for example, if the husband sold the house, re-partnered or received an inheritance. Nothing to that effect appeared in the financial agreement and the wife said she ultimately let the matter drop because she was made to feel guilty about requesting that it be included. It was the husband’s evidence that the wife made a conscious choice not to pursue the matter.
The final financial agreement signed by the parties in November 2008 required the husband to pay the wife $112,500 ($40,000 of which the wife acknowledged she had already received), and that she retain some shares, a motor vehicle, her superannuation and half of the furniture and chattels. The husband was to receive the unencumbered former matrimonial home, the business, the remainder of the cash in the bank, his superannuation, and half of the furniture and chattels. This meant ultimately the wife received property to the value of $185,000 and the husband received property to the value of $995,000, representing an 85 per cent/15 per cent division in the husband’s favour.
On 24 November 2008 the wife attended on Mr York alone and signed the agreement. Attached to the agreement was a certificate signed by Mr York and dated 24 November 2008 stating that he had provided to the wife the independent legal advice required by the Act.
On 27 November 2008 the husband attended on a Mr Turvey to sign the agreement, and Mr Turvey signed a similar certificate in relation to the husband.
Mr York’s account was subsequently paid by L Pty Ltd.
The provisions of the agreement were carried into effect. Notably, the husband contacted Mr York in December 2008 to inquire about the transfer of the home to him and as a result Mr York did the necessary paperwork.
On or about 13 May 2010 the husband received a letter from solicitors acting for the wife informing him that the wife was seeking to have the agreement set aside on the basis she had not received independent legal advice prior to signing the agreement. The Federal Magistrate accepted the husband’s evidence he had no prior warning that the wife was dissatisfied with the agreement.
On 17 June 2010 the wife lodged a caveat over the title to the former matrimonial home.
On 23 June 2010 the husband responded through solicitors to the wife’s letter, indicating he would not consent to the agreement being set aside.
The parties were divorced on 22 August 2010.
On 22 December 2010 the wife filed an Initiating Application seeking to have the agreement declared non-binding or set aside.
The matter came before the Federal Magistrate for hearing on 15 July 2011 and her Honour made orders and delivered her reasons for judgment on 10 January 2012.
Reasons for judgment delivered 10 January 2012
The Federal Magistrate commenced her reasons for judgment by outlining each party’s position and the evidence relied upon. In summary, the wife sought to have the agreement declared non-binding on the basis she did not receive independent legal advice before signing the agreement, as required by
s 90G(1)(b) of the Act. In the alternative the wife sought that the agreement be set aside on the basis she signed the agreement under duress and as a result of the husband’s unconscionable conduct. The husband sought that the wife’s application be dismissed.
The Federal Magistrate then set out the wife’s affidavit evidence in relation to her receipt of legal advice. The wife deposed that she was not, at any time prior to the execution of the agreement, provided with any legal advice as to the effect of the agreement on the parties’ rights and the advantages and disadvantages in making the agreement. It was also the wife’s evidence that, other than specifying the amount of money the wife was to receive, Mr York provided no additional advice and did not inform the wife of his duty to independently advise her. The wife relied on Mr York’s brief file note of
24 November 2008, which she argued did not indicate Mr York had given her the advice envisaged by s 90G(1)(b).
The Federal Magistrate then outlined the evidence in relation to duress and unconscionable conduct, but given there is no appeal against her Honour’s dismissal of the wife’s application in that regard we do not need to record
her Honour’s reasons in relation to those issues.
After setting out the statutory provisions in relation to financial agreements both at the time the parties signed the agreement and at the time of the hearing before her Honour, the Federal Magistrate turned to discuss the issue of whether the agreement was binding. It was counsel for the wife’s submission that the agreement was non-binding because Mr York was never independent, particularly as he had previously prepared wills for both parties, was engaged by both parties on this occasion to prepare the agreement, and at the husband’s request subsequently effected the transfer of the home. In the alternative, it was argued the only opportunity the wife had to receive legal advice from
Mr York was during the last meeting (as the husband was present at all the other meetings), but that the wife did not receive any legal advice, as evidenced by Mr York’s brief file note.
In essence, counsel for the wife submitted each party’s receipt of independent legal advice was an indispensible requirement. It was counsel for the husband’s submission that it would be improper and unconscionable to allow the wife to go behind the certificate of legal advice, and that the wife was estopped by the existence of the certificate from asserting she did not receive legal advice.
Her Honour noted that at first glance the decisions of Fevia & Carmel-Fevia (2009) FLC 93-411 and Parker & Parker (2010) 43 Fam LR 548 (where it was found estoppel could not apply to s 90G and that s 90G(1A) could not save an agreement if the requisite legal advice had not been given) did not assist the husband’s case, but subsequently acknowledged that both cases involved factual situations different from the current case because the husbands had changed the agreements after they were signed by the wives and their solicitors. Her Honour also noted that s 90G(1A) was drafted to apply not just to non-compliance with s 90G(1)(c) and (ca) in relation to the provision of certificates, but also to s 90G(1)(b) in relation to the actual provision of advice. Lastly, the Federal Magistrate referred to the decision of Wallace & Stelzer (2011) 44 Fam LR 648, where Benjamin J found the parties were entitled to rely on the assertions in the certificate, despite the husband’s denial that he ever received the advice required by s 90G.
In relation to the current case, the Federal Magistrate first noted the wife bore the onus of proving she did not receive independent legal advice, the standard for which was the civil standard as expressed in Briginshaw v Briginshaw (1938) 60 CLR 336. Her Honour also noted grave consequences would flow if it was found the wife was not given independent legal advice, because the provisions of the agreement had already been carried into effect and it would mean an officer of the court provided a false certificate. Ultimately, the Federal Magistrate was not “reasonably satisfied” on the wife’s evidence “that the provisions of s 90G(1)(b) were not complied with”, and she dismissed the wife’s application.
The relevant legislative provisions
At the time the parties signed the agreement, s 90G(1) of the Act read as follows:
(1) A financial agreement is binding on the parties to the agreement if, and only if:
(a) the agreement is signed by all parties; and
(b) the agreement contains, in relation to each spouse party to the agreement, a statement to the effect that the party to whom the statement relates has been provided, before the agreement was signed by him or her, as certified in an annexure to the agreement, with independent legal advice from a legal practitioner as to the following matters:
(i) the effect of the agreement on the rights of that party;
(ii) the advantages and disadvantages, at the time that the advice was provided, to the party of making the agreement; and
(c) the annexure to the agreement contains a certificate signed by the person providing the independent legal advice stating that the advice was provided; and
(d) the agreement has not been terminated and has not been set aside by a court; and
(e) after the agreement is signed, the original agreement is given to one of the spouse parties and a copy is given to each of the other parties.
Note: For the manner in which the contents of a financial agreement may be proved, see section 48 of the Evidence Act 1995.
The relevant provisions of s 90G are now as follows having been amended by the Federal Justice System Amendment (Efficiency Measures) Act (No. 1) 2009 (Cth) (“the Amending Act”):
(1)Subject to subsection (1A), a financial agreement is binding on the parties to the agreement if, and only if:
(a) the agreement is signed by all parties; and
(b) before signing the agreement, each spouse party was provided with independent legal advice from a legal practitioner about the effect of the agreement on the rights of that party and about the advantages and disadvantages, at the time that the advice was provided, to that party of making the agreement; and
(c) either before or after signing the agreement, each spouse party was provided with a signed statement by the legal practitioner stating that the advice referred to in paragraph (b) was provided to that party (whether or not the statement is annexed to the agreement); and
(ca) a copy of the statement referred to in paragraph (c) that was provided to a spouse party is given to the other spouse party or to a legal practitioner for the other spouse party; and
(d) the agreement has not been terminated and has not been set aside by a court.
(1A) A financial agreement is binding on the parties to the agreement if:
(a) the agreement is signed by all parties; and
(b) one or more of paragraphs (1)(b), (c) and (ca) are not satisfied in relation to the agreement; and
(c) a court is satisfied that it would be unjust and inequitable if the agreement were not binding on the spouse parties to the agreement (disregarding any changes in circumstances from the time the agreement was made); and
(d) the court makes an order under subsection (1B) declaring that the agreement is binding on the parties to the agreement; and
(e) the agreement has not been terminated and has not been set aside by a court.
The amendments apply retrospectively by force of the transitional and application provisions contained in Schedule 5 Part 1 Items 8 and 8A of the Amending Act. That retrospective application is not without complication, but it is unnecessary to delve into that complication here, not only because it is unnecessary to do so, but because we are aware that it is the subject of consideration by another Full Court.
For the purposes of this appeal it is s 90G(1)(b) as inserted by the Amending Act which needs to be satisfied to render the financial agreement binding, but subject to s 90G(1A). In other words, if s 90G(1)(b) is not satisfied in relation to the agreement, it may still be binding if pursuant to s 90G(1A)(c), “it would be unjust and inequitable if the agreement were not binding on the spouse parties to the agreement (disregarding any changes in circumstances from the time the agreement was made)”.
We observe that the application of s 90G(1A) was not raised before
her Honour, and thus it is not the subject of any challenge in this appeal. Nevertheless, we will need to revisit this issue later in these reasons because it was touched on in the initial written submissions of the wife’s counsel.
Grounds of appeal
The grounds of appeal as contained in the Notice of Appeal filed by the wife on 6 February 2012 are as follows:
1.The decision of the learned magistrate was wrong, demonstrates an error of principle and constitutes a substantial injustice to the appellant.
2.The only evidence before the court was that the appellant has received no advice as to the effect of the Financial Agreement, on her rights nor advice as to the advantages and disadvantages of making the agreement.
3.The absence of such advice vitiated the agreement by virtue of section 90G(1)(b) of the Family Law Act 1975.
4.Federal magistrate Terry was in error in not declaring the financial agreement to be non-binding or otherwise in not setting aside the said Financial Agreement.
5.The decision of the learned magistrate was wrong, demonstrates an error of principle and constitutes a substantial injustice to the appellant.
As is apparent Grounds 1 and 5 are precisely the same. In any event, they are far too general to permit us to give any consideration to them. Similarly, there is no specificity of the error alleged in Ground 4 such as would enable us to address this ground. Thus, the only grounds that we propose to address are Grounds 2 and 3 and they can conveniently be addressed together given that Ground 3 logically follows Ground 2.
Discussion – Grounds 2 and 3
The challenge here is to her Honour’s finding that, “[t]he wife’s evidence is not sufficient to allow [her Honour] to be reasonably satisfied that the provisions of s.90G(1)(b) were not complied with” (paragraph 110 of her Honour’s reasons for judgment).
It is claimed that on the evidence before the court her Honour should have found that the wife had not received the requisite legal advice, and thus the agreement was not binding on the parties. This of course overlooks
s 90G(1A)(c) but as we have already recorded, that was not raised before
her Honour.
The husband’s counsel suggested that the only evidence before the court on this issue was the wife’s evidence in her affidavit to the effect that she had not been provided with the requisite legal advice, and further, because that evidence was unchallenged, it should have been accepted by her Honour.
The first difficulty with that submission is that there was other evidence before her Honour, namely the certificate given by the wife’s solicitor, and that solicitor’s file. The second difficulty is that the solicitor was not called to give evidence by the wife when he could have been, and the third difficulty is that just because there is no cross-examination of a witness on a topic it is not the case that the evidence of that witness on that topic must be accepted on the ground that it is unchallenged.
Before addressing the issue of the evidence before the Federal Magistrate though, it is necessary to say something about the onus of proof. Her Honour approached this matter on the basis that it was the wife who bore the onus of proof, and specifically that she had the onus of proving that she was not provided with the requisite legal advice. Counsel also proceeded on that basis not only before her Honour, but also on the hearing of this appeal. However, in their further written submissions, it is put by the wife’s counsel, and conceded by the husband’s counsel, that her Honour was in error in this regard.
The Full Court in Hoult determined that the onus of proof lies on the party who is seeking to establish that a financial agreement is binding (see paragraph 60 of the reasons for judgment of Thackray J and paragraph 254 of the reasons for judgment of Strickland and Ainslie-Wallace JJ). Thus, that party must establish the existence of the prescribed matters including the provision of the requisite legal advice to both parties. In this case then it is the husband who bears this onus of proof.
Importantly though, Thackray J in Hoult (with the concurrence of Strickland and Ainslie-Wallace JJ) indicated (paragraph 62) that, “once the party seeking to rely upon the agreement produces in evidence the certificate signed by the other party’s solicitor, there is a forensic obligation on the other party to adduce evidence which would disprove, or at least throw into doubt, the inference or conclusion to be drawn from the certificate (especially when read with the recital in the agreement to the same effect)”. His Honour continued in paragraph 63:
This forensic obligation is properly conceptualised as the burden of introducing evidence and should not be confused with the burden of proof as a matter of law and pleading. For a discussion of the difference see Purkess v Crittenden (1965) 114 CLR 164 especially at 167-168 per Barwick CJ, Kitto and Taylor JJ and 170-171 per Windeyer J.
Pausing there, it seems to us that the error made by her Honour in her application of the onus of proof renders her Honour’s decision unsafe and liable to be overturned. It is unknown what result her Honour would have arrived at if she had properly applied the onus of proof.
To repeat, the onus was on the husband, and it was open to him, as he did, to rely on the certificate provided by the solicitor as establishing that the requisite legal advice had been given. We note that the husband submitted that it was not open to go behind that certificate, but her Honour, correctly in our view, did not accept that proposition.
How such a certificate is to be treated was also the subject of the decision of the Full Court in Hoult.
Their Honours were ad idem that the certificate given by the solicitor must be treated at least as prima facie evidence of compliance with the requirement to provide legal advice. Further, that is bolstered by the presence in a financial agreement of recitals such as appeared in the agreement in this case, namely in recitals O, P, Q and R, which in effect confirmed that the requisite legal advice was given.
Applying the principles emanating from Hoult, what the reliance by the husband on the certificate, and the recitals, does is satisfy the initial onus on the husband, and passes the evidentiary burden to the wife. The certificate gave rise to “an inference, a presumption of fact or a presumptio hominis” (paragraph 97) that the requisite advice has been. The question then becomes whether the wife has adduced sufficient evidence to displace that inference.
As was explained in Hoult in paragraphs 101 and 279, that does not then require an inquiry into the content of the legal advice, but just as to whether the advice was given.
The evidence of the wife comprised her deposition in her affidavit that she was not provided with the advice. She did not present any detail as to what in fact was said by the solicitor, and of course she did not call the solicitor to give evidence, as was open to her. However, the wife’s denial was not challenged in cross-examination on behalf of the husband, and the husband himself conceded that the required advice was not given at any of the preliminary consultations when he was present. Further, the husband did not call the solicitor to give evidence when it was also open to him to do so, and the file note from the solicitor’s file of the final attendance upon the wife when she signed the agreement did not indicate that the advice was given.
In relation to the absence of cross-examination, it is of course not the case that the absence of cross-examination requires that the wife’s evidence be accepted. For example, the rule in Browne & Dunn (1894) 6 R. 67, that it is necessary to put to an opponent’s witness in cross-examination the nature of the case upon which it is proposed to rely in contradiction of his evidence, does not apply where “the witness is on notice that the witness’s version of events is in contest” (LC v TC (1998) FLC 92-803 per Baker J at paragraph 38). Further, as was also said by Baker J in LC v TC at paragraph 38, “[t]hat notice may come from the pleadings or the other side’s evidence or the other side’s opening; it may even come from the general manner in which the case is conducted”.
However, we have difficulty with extending these principles to a case such as this where the evidence which was not directly challenged in cross-examination was the cornerstone of the party’s case. Further, it is significant that this crucial evidence was given by affidavit and not orally.
Thus, the question becomes whether this evidence satisfies the forensic obligation thrown on the wife by the presentation of the certificate. In answering that question it must be remembered that the obligation was not to prove that the advice had not been given, but to throw the matter into doubt, leaving the onus of satisfying the court that the advice had been given on the husband.
It is precisely here where the error made by the Federal Magistrate in the allocation of the onus of proof infects her Honour’s decision as a whole. In other words, it is not apparent how her Honour was able to arrive at the finding that the wife’s evidence was insufficient to reasonably satisfy her Honour that
s 90G(1)(b) had not been complied with.
Before leaving the grounds of appeal we observe that in his written submissions the wife’s counsel suggested that “her Honour’s reasons are probably sufficient to demonstrate that a court could not be satisfied, in the circumstances, that it would be unjust and inequitable if the agreement were not binding on the spouse parties within the meaning of Section 90G(1A)(c) of the Legislation”. However, we do not accept that submission. In her reasons her Honour did not address s 90G(1A)(c) of the Act because it was not raised by either party, and the reasons to which counsel refers relate to her Honour’s consideration of s 90K of the Act, which is an entirely different topic. It is incorrect to suggest as the wife’s counsel does, that her Honour effectively made a finding in terms of s 90G(1A)(c).
Further, we take this opportunity to comment on paragraphs 79 and 84 of
her Honour’s reasons for judgment. In those paragraphs her Honour seemed to accept that in Parker & Parker (2010) 43 Fam LR 548, Strickland J found that
s 90G(1A) could not save an agreement if the requisite legal advice had not been given. We consider that to be a misinterpretation of what his Honour said in that case, and that is borne out by what the Full Court in Parker & Parker (2012) FLC 93-499, and the Full Court in Hoult said about his Honour’s reasons for judgment. There is no doubt that even where there is an absence of the requisite legal advice a financial agreement can still be held to be binding pursuant to s 90G(1A)(c).
Similarly, if in paragraph 84 of her Honour’s reasons for judgment she is suggesting that Strickland J in Parker held that s 90G(1A) was only available to assist a party where there had been a failure to comply with a “technical requirement”, then her Honour has further misinterpreted his Honour’s reasons for judgment in that case. Again, that is borne out by what the Full Court in both Parker and Hoult said about his Honour’s reasons.
Finally, her Honour noted that an argument was put to her by counsel for the husband that the certificate of the solicitor created an estoppel which prevented the wife from suggesting that she had not received the requisite legal advice. Her Honour took the view that estoppel did not apply and that is not a matter that was raised in this appeal. However, we understand that another Full Court is addressing that issue.
Conclusion
Having found that it is unsafe to maintain her Honour’s decision, the appeal must be allowed, and subject to what we next say about whether the proceedings should be remitted or the discretion re-exercised, the order made by her Honour should be set aside. We confirm though that there were alternative applications before her Honour, namely an application that the agreement should be declared non-binding because the wife did not receive independent legal advice as required by s 90G(1)(b) of the Act, and in the alternative an application that the agreement should be set aside because the wife signed it as a result of duress and as a result of the husband’s unconscionable conduct. Her Honour dismissed the application, finding that the agreement should neither be declared non-binding nor that it should be set aside. To repeat, there was no appeal against her Honour’s finding that the agreement should not be set aside because the wife signed it as a result of duress and as a result of the husband’s unconscionable conduct. Accordingly, in setting aside her Honour’s order that must necessarily only be limited to setting aside her Honour’s order insofar as it was based on her Honour not being reasonably satisfied that the provisions of s 90G(1)(b) were not complied with.
As to the question of whether the proceedings should be remitted for rehearing or the discretion re-exercised, given our reasons for allowing the appeal, we have no choice other than remit the proceedings for rehearing. Because
her Honour misapplied the onus of proof we are not able to utilise any findings made by her Honour in re-exercising the discretion.
Costs
At the conclusion of the hearing we sought submissions as to costs.
In the event the appeal was successful, the wife sought an order that the husband pay her costs, but in the event that no costs were awarded then the husband sought costs certificates pursuant to the Federal Proceedings (Costs) Act 1981 (Cth). For the husband’s part he submitted that there should be no order for costs and that both parties should have costs certificates.
We do not consider that there is any justification for an order for costs being made in favour of the wife albeit she has been successful. The appeal is being allowed because of an error by the Federal Magistrate and that was an error to which both parties contributed.
Given then that there will be no order as to costs, and that the appeal is being allowed on a question of law, we consider it appropriate that both parties should have costs certificates for the appeal and for the rehearing.
I certify that the preceding sixty-six (66) paragraphs are a true copy of the reasons for judgment of the Honourable Full Court (May, Thackray & Strickland JJ) delivered on 30 September 2013.
Associate:
Date: 30 September 2013
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