Mansour & Kaleel (No 2)
[2024] FedCFamC2F 107
•1 February 2024
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Mansour & Kaleel (No 2) [2024] FedCFamC2F 107
File number(s): PAC 5559 of 2022 Judgment of: JUDGE NEWBRUN Date of judgment: 1 February 2024 Catchwords: FAMILY LAW – PROPERTY – Binding financial agreements set aside – Property adjustment Orders made. Legislation: Family Law Act 1975 (Cth) ss 75(2), 79(2), 90B, 90G, 90K, 90KA Cases cited: Hoult & Hoult [2013] FamCAFC 109
Logan & Logan [2013] FamCAFC 151
Lotta & Lotta [2017] FamCA 50
Thorne v Kennedy (2017) 263 CLR 85
Division: Division 2 Family Law Number of paragraphs: 139 Date of last submissions: 2 November 2023 Date of hearing: 12 and 13 October 2023 Place: Parramatta Counsel for the Applicant: Mr Strik Solicitor for the Applicant: Jack Rigg Solicitors Counsel for the Respondent: Mr Cairns Solicitor for the Respondent: Goldman & Co Lawyers ORDERS
PAC 5559 of 2022 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: MR MANSOUR
Applicant
AND: MS KALEEL
Respondent
ORDER MADE BY:
JUDGE NEWBRUN
DATE OF ORDER:
1 FEBRUARY 2024
ON A FINAL BASIS THE COURT ORDERS THAT:
1.The Financial Agreement signed by the parties in late 2019 be set aside pursuant to section 90K of the Family Law Act 1975 (Cth) (“the Act”).
2.The Financial Agreement signed by the parties in mid-2020 be set aside pursuant to section 90K of the Act.
3.Within 10 weeks of the date of these Orders, the wife shall pay to the husband the sum of $294,620.
4.Simultaneously with the wife paying to the husband the sum of $294,620, the husband shall, at his expense, cause his 1 per cent interest in the property at B Street, Suburb C (“the Suburb C property”) at to be transferred to the wife.
5.Failing compliance with Order 3 above, the parties do all acts and things and sign all documents necessary to cause the Suburb C property at to be listed for sale in accordance with the following:
(a)The parties shall instruct a real estate agent to sell the Suburb C property by agreement or failing agreement, the husband shall nominate three (3) real estate agents and the wife shall select one of the nominated real estate agents within seven (7) days of receipt of the proposed real estate agents to act on behalf of the parties (“real estate agent”).
(b)The parties shall instruct an independent solicitor or conveyancer entitled to control and operate a trust account to act on the sale of the Suburb C property by agreement and failing agreement, the husband shall nominate three (3) solicitors or conveyancers and the wife shall select one to act on the conveyance on behalf of the parties within seven (7) days of receipt.
(c)The reserve and listing price shall be set as agreed between the parties in writing and failing agreement within seven (7) days of receipt of the appointment of the real estate agent, the reserve price shall be as recommended by the real estate agent.
(d)In the event that the reserve or listing price is not reached, the sale of the Suburb C property shall be such amount as is agreed between the parties and failing agreement, an offer received to buy the Suburb C property at a price that is not less than 95 per cent of the reserve or listing price shall be accepted by the parties.
(e)The parties shall cooperate in every way with the real estate agent of the Suburb C property including making the key available and allowing inspection at times as required by the real estate agent.
(f)That upon agreement being reached for the sale of the Suburb C property the parties shall execute all documents necessary to complete the sale of the Suburb C property including all transfer documentation forthwith upon its submissions to them by the real estate agent or their solicitor within no less than seven (7) days of being requested to do so.
6.That following the sale of the Suburb C property, the net proceeds of sale be distributed in the following manner:
(a)In payment of all real estate agent's commissions, legal conveyancing fees and other sale expenses;
(b)Discharge of the mortgage outstanding;
(c)Payment of any outstanding council rates;
(d)Payment of any taxes in relation to the sale;
(e)The sum of $294,620 be paid to the husband;
(f)The balance to the wife.
7.The husband shall forthwith take all necessary steps, at his expense, to cause his equitable interest in the property known as D Street, City E, NSW (“the City E property”) to be transferred to the wife.
8.The wife is hereby declared the sole legal and beneficial owner of trust funds, $16,000, together with any interest accrued thereon, held by her former solicitors F Law Firm, and being part of the proceeds of sale of the parties’ former property at G Street, Suburb H.
9.The wife, on receipt of the above trust funds, shall forthwith pay outstanding real estate agent’s commission in the sum of $12,000, owed to the real estate agency which acted on the sale of the parties’ former property at Suburb H.
10.That as between the husband and the wife, and subject to the above Orders, the husband and the wife shall each respectively retain all interest in and entitlement to:
(a)All personal property now held in his/her respective possession or control.
(b)All shares, debentures, units in unit trusts, bank, building society or credit union accounts standing in his/her sole name respectively.
(c)All interests in life insurance policies and superannuation funds standing in his/her sole name respectively.
11.That except as otherwise provided by these Orders, each party remains solely responsible for all debts, including credit card debts, in the parties’ respective names.
12.That each party is solely liable for and indemnifies the other against any liability encumbering any item of property to which that party is entitled pursuant to these Orders.
13.That the parties shall do all acts and things necessary and give all consents and execute all documents and writings to give effect to these Orders in the time periods prescribed.
14.That in the event either party fails to execute any deed, document or instrument necessary to give effect to all or any of these orders, then the Registrar of the Court shall be appointed pursuant to section 106A of the Act to execute such deed, document or instrument in the name of the said party and do all acts and things necessary to give validity and operation to the deed, document or instrument upon the Registrar being provided with verification of refusal or failure by way of affidavit at the cost of the non‑compliant party.
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 has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
JUDGE NEWBRUN:
INTRODUCTION
These are Reasons for Judgment relating to, firstly, the husband’s application to set aside two binding financial agreements, and, secondly, in the event that they are set aside, property adjustment proceedings. The proceedings were held before the Court on 12 and 13 October 2023.
The husband and respondent wife both appeared, legally represented.
The parties informed the Court on 13 October 2023 that they consented to the Court dealing firstly with the binding financial agreements issue, and then, if the Court ordered that those agreements be set aside, that the Court proceed to determine property adjustment issues between the parties.
PROPOSALS
The husband seeks orders as set out in his Amended Initiating Application filed 22 December 2022:
1.A declaration that the Financial Agreement entered into on 1 June 2020 between the parties be set aside pursuant to Sections 90G and 90K of the Family Law Act 1975.
2.A declaration that the Financial Agreement entered into on 19 September 2019 be set aside pursuant to Sections 90G and 90K of the Family Law Act 1975.
3.THAT upon the court setting aside the Financial Agreements listed in Order 1 and Order 2, that a property settlement adjustment be made pursuant to Section 79 of the Family Law Act 1975.
4.That within twenty-eight (28) days from the date of these Orders, the parties do all acts and things and sign all documents necessary to cause the following properties to be transferred to the Respondent:
a.[B Street, Suburb C] (“the [Suburb C] property”) being the whole of the land contained in Folio Identifier […]; and
b.[…], [D Street, City E] NSW (“the [City E] property”).
5.That simultaneously with Order 4, the Respondent refinance the [Suburb C] property and the [City E] property in her sole name and pay to the Applicant the sum of 50% of the equity within the [Suburb C] property and the [City E] property.
6.That in the event the Respondent fails to make payment to the Applicant in accordance with Order 5, the parties do all acts and things and sign all documents necessary to cause the [Suburb C] property to be listed for sale in accordance with the following:
a.The parties shall instruct a real estate agent to sell the [Suburb C] property by agreement or failing agreement, the Applicant shall nominate three (3) real estate agents and the Respondent shall select one of the nominated real estate agents within seven (7) days of receipt of the proposed real estate agents to act on behalf of the parties (“real estate agent”).
b.The parties shall instruct an independent solicitor or conveyancer entitled to control and operate a trust account to act on the sale of the [Suburb C] property by agreement and failing agreement, the Applicant shall nominate three (3) solicitors or conveyancers and the Respondent shall select one to act on the conveyance on behalf of the parties within seven (7) days of receipt.
c.The reserve and listing price shall be set as agreed between the parties in writing and failing agreement within seven (7) days of receipt of the appointment of the real estate agent, the reserve price shall be as recommended by the real estate agent.
d.In the event that the reserve or listing price is not reached, the sale of the [Suburb C] property shall be such amount as is agreed between the parties and failing agreement, an offer received to buy the [Suburb C] property at a price that is not less than 95% of the reserve or listing price shall be accepted by the parties.
e.The parties shall cooperate in every way with the real estate agent of the [Suburb C] property including making the key available and allowing inspection at times as required by the real estate agent.
f.That upon agreement being reached for the sale of the [Suburb C] property the parties shall execute all documents necessary to complete the sale of the [Suburb C] property including all transfer documentation forthwith upon its submissions to them by the real estate agent or their solicitor within no less than seven (7) days of being requested to do so.
7.That following the sale of the [Suburb C] property, the net proceeds of sale be distributed in the following manner:
a.In payment of all real estate agent's commissions, legal conveyancing fees and other sale expenses;
b.Discharge of the mortgage outstanding;
c.Payment of any outstanding council rates;
d.Payment of any taxes in relation to the sale;
e.The remaining funds to be held in the [J Law Firm] Trust Account.
8.That the net proceeds of sale held in the [J Law Firm] Trust Account be divided:
a.to the Applicant in the sum of $300,000 or 50% of the net proceeds of sale (whichever is the higher amount);
b.the balance to the Respondent.
9.That as between the Respondent and Applicant, and subject to the above Orders, the Respondent and Applicant shall each respectively retain all interest and entitlement to:
a.All personal property now in his/her respective possession or control.
b.All shares, debentures, units in unit trusts, bank, building society or credit union accounts standing in his/her sole name respectively.
c.All interests in life insurance policies and superannuation funds standing in his/her sole name respectively.
10.That except as otherwise provide by these orders, each party remains solely responsible for all debts, including credit card debts, in the parties respective names.
11.That each party is solely liable for and indemnifies the other against any liability encumbering any item of property to which that party is entitled pursuant to these Orders.
12.That the parties shall do all acts and things necessary and give all consents and execute all documents and writings to give effect to these Orders in the time periods prescribed.
13.That in the event either party fails to execute any deed, document or instrument necessary to give effect to all or any of these orders, then the Registrar of the Court shall be appointed pursuant to Section 106A of the Family Law Act 1975 (Cth) to execute such deed, document or instrument in the name of the said party and do all acts and things necessary to give validity and operation to the deed, document or instrument upon the Registrar being provided with verification of refusal or failure by way of Affidavit at the cost of the non-compliant party.
14.That the Respondent pay the Applicant's costs.
The wife seeks orders as set out in her Amended Response filed 3 January 2023, inter alia:
1.That, pursuant to section 90G(1B) of the Family Law Act 1975 (Cth), a declaration that the Financial Agreement entered into by the parties on 1 June 2020 is binding and hereby enforceable on the parties.
…
4.That, in the alternative to Order 1, pursuant to section 90G (1B) of the Family Law Act 1975 (Cth), a declaration is hereby made that the Financial Agreement entered into by the parties on 19 September 2019 is binding and enforceable on the parties.
5.That upon the Court making either Order 1 or Order 4, that a declaration be made that the property located at [Suburb C] NSW (“the [Suburb C] property”) being the whole of the land contained in Folio Identifier […] be dealt with as follows.
a.The Applicant within 45 days of these Orders transfer the 1% interest in the [Suburb C] Property to the Respondent and pay any cost of the transfer; and
b.The Applicant be discharged from the mortgage over the [Suburb C] property; and
c.The Respondent pay to the Applicant or to the Applicant’s solicitors trust account the lesser of the sum of either 1% of the net equity (market value as per valuation less the mortgage liability) of the [Suburb C] property or the amount determined under either of the Binding Financial Agreement in Order 1 or 4 based on the proportion of direct cash contributions as defined in Clauses 6 (d) and 6 (b) respectively of those agreements.
d.If refinancing is not possible that the [Suburb C] property be sold by auction and the amount of the sale proceeds be divided in the proportions as determined in Order 5 c., above apply less the costs of the sale including legal fees, auction and real estate agent marketing and commissions.
7.That upon the court making either Order 1 or Order 2, that a declaration be made that the off the plan contractual entitlement to a future property known as [City E] NSW (“the [City E] property”) be dealt with as follows:
a.The [City E] property be sold by auction within 60 days of the vesting of the title.
b.The Parties divide any sales proceeds within 60 days of the [City E] property as determined under either of the Binding Financial Agreements in Orders 1 or 4 based on the proportion of each direct cash contributions as defined in Clauses 6 (d) and 6 (b) respectively of those agreements. The proportions so determined shall apply to; the sales proceeds less the costs of the transfer and subsequent sale including legal fees, auction and real estate agent marketing and commissions.
c.If the property does not vest on completion or if the Parties are in default of the contract for the [City E] property, failing any agreement between the Parties, that within 30 days of such default, the [City E] property share of any contractual liabilities or damages be paid to the developer or lender in equal proportions by the Parties but the equal share reduced by the excess of the amount of the direct cash contribution made by a Party towards the [City E] property. The amount of the excess being the difference between the cash contributions between the Parties and the other Party having an increased share of any such liability.
8.That the proceeds held in the trust account of the solicitor who was instructed in the sale of the property at [Suburb H] be divided and dealt with by the parties on the basis of their direct cash contributions towards that property.
9.In the alternative if neither Order 1 or Order 4 is made, upon the Court setting aside the Financial Agreements, that a property settlement adjustment be made pursuant to Section 79 of the Family Law Act 1975.
10. That the Applicant pay the costs of the proceedings to the Respondent.
11. Any other Order that the Honourable Court deems fit to make.
MATERIAL RELIED UPON
The husband relied upon the following documents:
(a)His Case Outline filed 21 September 2023;
(b)His affidavits filed:
(i)19 March 2023;
(ii)11 April 2023;
(iii)21 April 2023;
(c)His Amended Application for final Orders filed 22 December 2022;
(d)His Financial Statement filed 24 April 2023;
(e)His written submissions dated 24 October 2023, and 2 November 2023.
The wife relied upon the following documents:
(a)Her Case Outline filed 21 September 2023;
(b)Her affidavit filed 6 April 2023;
(c)Her Amended Response filed 3 January 2023;
(d)Her Financial Questionnaire filed 23 November 2022;
(e)Her Financial Statements filed:
(i)23 November 2022;
(ii)5 October 2023;
(f)Her written submissions dated 25 October 2023, and 2 November 2023.
The exhibits were as follows:
(a)Exhibit A: Pages 52–118 of the Applicant’s Tender Bundle;
(b)Exhibit B: Tax Invoice issued to Mr Mansour by K Law Firm dated 19 September 2019;
(c)Exhibit C: Request for disclosure from Jack Rigg Solicitors dated 26 September 2023;
(d)Exhibit D: Respondent’s Tender bundle of Documents;
(e)Exhibit E: Letter of Dr M dated 2 March 2023;
(f)Exhibit F: Joint Balance Sheet.
Evidence relating to the husband’s application to set aside two binding financial agreements
The Court has considered the documentary material relied upon by the parties discussed above, and the oral evidence of the parties and witnesses adduced at the trial. The standard of proof applied by the Court in respect to the evidence is the balance of probabilities. The Court does not propose to set out the entirety of the evidence. Relevant evidence relating to the issues to be determined will be set out below and under the headings “Determination of Application to set aside the two binding financial agreements”. Where there is any conflict between the evidence referred to below and under that heading, the evidence under the heading “Determination of Application to set aside the two binding financial agreements” shall take precedence.
The parties were each cross-examined. The husband was a satisfactory witness. The wife proved to be an unreliable witness in that she resiled from aspects of her trial affidavit filed 6 April 2023, in particular paragraph 99, having asserted in cross-examination that she had made an error in paragraph 99 which had referred incorrectly to a meeting at Ms N’s office on 1 June 2020 (in cross-examination she stated, which the Court does not accept, that the meeting she was referring to in paragraph 99 was a meeting with Ms N on 25 April 2020).
The husband was born in 1959.
The wife was born in 1975.
The husband works as a professional.
The parties met in 2019. They commenced living together that same year.
The husband proposed marriage to the wife in 2019. They were engaged later that year.
The parties made all the wedding arrangements during 2019. They hired a church for their wedding to be held later that year.
In 2019 the wife approached the husband requesting he sign a prenuptial agreement. She said, “If you don’t sign then my parents will not allow us to marry.” The husband was shocked and dismayed.
The husband had no parents to support him morally or advise him and he felt very stressed that he had planned all the marriage by 2019 and now just six weeks before the marriage he was facing the stress of a prenuptial agreement.
The wife ascertained that K Law Firm, could provide advice to the husband in relation to the proposed prenuptial agreement. The wife arranged a meeting for the parties to see Ms L in her office and they travelled together by car.
Ms L in oral evidence stated that she had two conversations with the husband at separate times. She could not recall whether her first discussion with the husband relating to the first financial agreement was by telephone or by way of face-to-face meeting. She had sent an email to Mr O in late 2019 and which referred to her instructions from the husband relating to certain proposed amendments. She stated that she had a face-to-face meeting with the husband in late 2019 when the first financial agreement was further discussed with him, proposed amendments sent to the wife’s solicitor Mr O, and later that same day signed by him.
Ms L was asked whether the wife was present during her face-to-face meeting with the husband to which she responded in the negative. She stated that she had made no formal file notes regarding her discussions with the husband.
Immediately after settlement of the purchase of the Suburb H property in early 2020, the wife told the husband that she would prepare a new financial agreement. She prepared a new agreement on about early 2020.
The wife researched, made enquiries and recommended that the husband use the services of P Law Firm and who were co-located with her solicitor. The wife told the husband that they could hand deliver the agreement to her solicitor upstairs after he signed with his solicitor.
The wife arranged the meetings between the husband and P Law Firm and herself.
After making the arrangements, the wife was questioning the husband and pressuring him that he signed the agreement without any changes, stating, “You must sign the agreement, the [Suburb H] contract is due to settle in three days and I will lose my money.”
In about early 2020 the parties went together for an appointment with Ms N of P Law Firm.
In early 2020 Ms N sent a request to the wife’s solicitor requesting changes to the proposed prenuptial agreement. The husband had requested changes to the proposed prenuptial agreement through his handwritten changes.
In mid-2020 the husband received a form of financial agreement emailed by Ms N and the husband emailed back to Ms N asking, “Looks fair what do you think?”, and the response he received was, “It is about whether you understand what’s in the agreement.”
In mid-2020 the parties went to meet Ms N at 5.00 pm. The wife initially walked into Ms N’s office. Ms N asked the wife to stay outside. The wife was then outside the door, during the husband’s meeting with Ms N.
As the husband questioned Ms N saying, “I am still not happy with the living expenses and mortgage contributions the way it's written”, he started receiving multiple text messages including threatening ones from the wife to the effect: “If you ask any more questions I will be quick to annul the wedding as it's less than 6 months”.
Ms N noticed the situation that the husband was distracted as she asked him, “What's wrong”, and the husband told her, “[Ms Kaleel] is sending me text messages; she is listening in”. Ms N advised the husband not to sign, “but in the duress, I (the husband) was under, I signed the agreement.”
When the husband left, the wife was waiting for him outside the office door. The husband was very uncomfortable, and the wife took the document. The parties went upstairs to see the wife’s solicitor which was when the wife signed it, and her solicitor then emailed a copy back to Ms N later in the evening.
APPLICATION TO SET ASIDE THE FINANCIAL AGREEMENTS
Legal principles
Relevant statutory provisions and legal principles will now be set out in relation to the husband’s proposed orders seeking to set aside the financial agreement pursuant to sections 90G and 90K of the Family Law Act 1975 (Cth) (“the Act”).
Section 90G of the Act provides:
When financial agreements are binding
(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.
(1B)For the purposes of paragraph (1A)(d), a court may make an order declaring that a financial agreement is binding on the parties to the agreement, upon application (the enforcement application ) by a spouse party seeking to enforce the agreement.
(1C)To avoid doubt, section 90KA applies in relation to the enforcement application.
(2)A court may make such orders for the enforcement of a financial agreement that is binding on the parties to the agreement as it thinks necessary.
In Logan & Logan [2013] FamCAFC 151, the Court, discussing Hoult & Hoult [2013] FamCAFC 109, stated:
44.The Full Court in Hoult determined that the onus of proof lies on the party who is seeking to establish that a financial agreement is binding (see paragraph 60 of the reasons for judgment of Thackray J and paragraph 254 of the reasons for judgment of Strickland and Ainslie-Wallace JJ). Thus, that party must establish the existence of the prescribed matters including the provision of the requisite legal advice to both parties. In this case then it is the husband who bears this onus of proof.
45.Importantly though, Thackray J in Hoult (with the concurrence of Strickland and Ainslie-Wallace JJ) indicated (paragraph 62) that, “once the party seeking to rely upon the agreement produces in evidence the certificate signed by the other party’s solicitor, there is a forensic obligation on the other party to adduce evidence which would disprove, or at least throw into doubt, the inference or conclusion to be drawn from the certificate (especially when read with the recital in the agreement to the same effect)”. His Honour continued in paragraph 63:
This forensic obligation is properly conceptualised as the burden of introducing evidence and should not be confused with the burden of proof as a matter of law and pleading. For a discussion of the difference see Purkess v Crittenden (1965) 114 CLR 164 especially at 167-168 per Barwick CJ, Kitto and Taylor JJ and 170-171 per Windeyer J.
…
48.How such a certificate is to be treated was also the subject of the decision of the Full Court in Hoult.
49.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.
50.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.
51.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.
In Hoult & Hoult [2013] FamCAFC 109, the majority (Strickland and Ainslie-Wallace JJ) stated, inter alia:
275.As the husband’s counsel pointed out in his written summary of argument, having sworn that the contents of the certificate were true it was necessary that she be confronted squarely with the allegation that she certified falsely. However, that was never done. It was not put to the solicitor that her certificate was false. Certainly, it was suggested that she had not given the requisite appropriate advice (which she denied), but that still left the certificate and its correctness unchallenged.
276.The leads into a consideration of Ground 4, and we consider that that Ground must succeed, and for the reasons expressed by Justice Thackray. The certificate given by the solicitor, when read with recital “N” to the agreement, should have been treated by the trial judge at least as prima facie evidence of compliance with the requirement in s 90G(1) to provide legal advice.
277.The authorities are quite clear as to how such a certificate should be treated, and they are amply set out in Justice Thackray’s reasons.
Section 90K(1)(b) of the Act provides that a financial agreement may be set aside if the agreement is void, voidable or unenforceable.
Section 90K(1)(e) of the Act provides that a financial agreement may be set aside if a party to the agreement engaged in conduct that was, in all the circumstances, unconscionable.
Section 90KA of the Act provides, inter alia, that the question of whether a financial agreement is valid, enforceable or effective is to be determined by the court according to the principles of law and equity that are applicable in determining the validity, enforceability and effect of contracts and purported contracts.
The husband contended that the binding financial agreement should be set aside on the grounds of, inter alia, undue influence and unconscionable conduct. These grounds were addressed by the High Court in the matter of Thorne v Kennedy (2017) 263 CLR 85.
In explaining the concept of undue influence, Kiefel CJ, Bell, Gageler, Keane and Edelman JJ stated the following:
31In 1836, in a passage which was copied verbatim by Snell 30 years later, Story said that a person can be subjected to undue influence where the effect of factors such as pressure is that the person “has no free will, but stands in vinculis [in chains]”. He explained that “the constant rule in Equity is, that, where a party is not a free agent, and is not equal to protecting himself, the Court will protect him”. In 1866, this approach was applied in equity by the House of Lords, recognising undue influence in a case of pressure that deprived the plaintiff of “free agency”. In 1868, in probate, Sir James Wilde also described undue influence as arising where a person is not a “free agent”. In Johnson v Buttress, Dixon J described how undue influence could arise from the “deliberate contrivance” of another (which naturally includes pressure) giving rise to such influence over the mind of the other that the act of the other is not a “free act”. And, in Bank of New South Wales v Rogers, McTiernan J characterised the absence of undue influence as a “free and well-understood act” and Williams J referred to “the free exercise of the husband’s will”.
32The question whether a person’s act is “free” requires consideration of the extent to which the person was constrained in assessing alternatives and deciding between them. Pressure can deprive a person of free choice in this sense where it causes the person substantially to subordinate his or her will to that of the other party. It is not necessary for a conclusion that a person’s free will has been substantially subordinated to find that the party seeking relief was reduced entirely to an automaton or that the person became a “mere channel through which the will of the defendant operated”. Questions of degree are involved. But, at the very least, the judgmental capacity of the party seeking relief must be “markedly sub-standard” as a result of the effect upon the person’s mind of the will of another.
…
34There are different ways to prove the existence of undue influence. One method of proof is by direct evidence of the circumstances of the particular transaction…Another way in which undue influence can be proved is by presumption…. A presumption, in the sense used here, arises where common experience is that the existence of one fact means that another fact also exists. Common experience gives rise to a presumption that a transaction was not the exercise of a person’s free will if (i) the person is proved to be in a particular relationship, and (ii) the transaction is one, commonly involving a “substantial benefit” to another, which cannot be explained by “ordinary motives”, or “is not readily explicable by the relationship of the parties”. Although the classes are not closed, in Johnson v Buttress Latham CJ described the relationships that could give rise to the presumption as including parent and child, guardian and ward, trustee and beneficiary, solicitor and client, physician and patient, and cases of religious influence.
(Footnotes omitted)
In Thorne v Kennedy, the wife’s submission that she was entitled to the benefit of the presumption of undue influence because the relationship of fiancé and fiancée should be recognised as one to which the presumption attached was rejected by the Court.
At paragraph 60, the majority identified the following relevant factors which may have prominence in determining undue influence in the context of pre-nuptial and post-nuptial agreements:
(i)whether the agreement was offered on a basis that it was not subject to negotiation;
(ii)the emotional circumstances in which the agreement was entered including any explicit or implicit threat to end a marriage or to end an engagement;
(iii)whether there was any time for careful reflection;
(iv) the nature of the parties’ relationship;
(v) the relative financial positions of the parties; and
(vi) the independent advice that was received and whether there was time to reflect on that advice.
In relation to unconscionable conduct, the majority stated:
38A 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.
(Footnotes omitted)
The majority acknowledged that while there may be overlap between unconscionable conduct and undue influence, they have distinct spheres of operation:
40One 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 the will of the innocent party is not independent and voluntary because it is overborne. In the former 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.”
(Footnote omitted)
In Beroni & Corelli [2021] FamCAFC 9 the Full Court of the Family Court of Australia had referred, in relation to unconscionable conduct, to Commercial Bank of Australia Ltd v Amadio (1983) 151 CLR 447 at 474 wherein Deane J had stated:
12.The jurisdiction of courts of equity to relieve against unconscionable dealing developed from the jurisdiction which the Court of Chancery assumed, at a very early period, to set aside transactions in which expectant heirs had dealt with their expectations without being adequately protected against the pressure put upon them by their poverty (see O'Rorke v. Bolingbroke (1877) 2 App Cas 814, at p 822 ). The jurisdiction is long established as extending generally to circumstances in which (i) a party to a transaction was under a special disability in dealing with the other party with the consequence that there was an absence of any reasonable degree of equality between them and (ii) that disability was sufficiently evident to the stronger party to make it prima facie unfair or "unconscientious" that he procure, or accept, the weaker party's assent to the impugned transaction in the circumstances in which he procured or accepted it. Where such circumstances are shown to have existed, an onus is cast upon the stronger party to show that the transaction was fair, just and reasonable: "the burthen of shewing the fairness of the transaction is thrown on the person who seeks to obtain the benefit of the contract" (see per Lord Hatherley, O'Rorke v. Bolingbroke (1877) 2 App Cas, at p 823 ; Fry v. Lane (1888) 40 ChD 312, at p 322 ; Blomley v. Ryan [1956] HCA 81; (1956) 99 CLR 362, at pp 428-429 ). (at p474)
Determination of Application to set aside the two binding financial agreements
The Court will now deal with the first financial agreement dated 19 September 2019 (“the first financial agreement”).
In the view of the Court, the first financial agreement is voidable for undue influence exerted by the wife upon the husband, and it should be set aside. The Court will now give its reasons for so finding.
The Court accepts the husband’s evidence that in late 2019, being only seven days before the first financial agreement was signed, the wife approached him requesting that he sign a prenuptial agreement. Importantly, she said to the husband, “If you don’t sign then my parents will not allow us to marry.” The Court accepts the husband’s evidence that he was shocked and dismayed. The Court accepts the husband’s evidence that he had no parents to support him morally or advise him and he felt very stressed that he had planned all the marriage by 2019 and now just six weeks before the marriage he was facing the stress of a prenuptial agreement. The Court infers that at the time the above statement of the wife was made to him he was emotionally committed to marrying the wife.
Effectively, the wife, through her above statement to the husband, had told the husband that the proposed agreement was not subject to negotiation; the Court observes that in fact the operative part of the first financial agreement was not amended in any significant way (albeit certain factual matters were added and clause 5 was amended to provide for the agreement to take effect if an Application for Divorce was filed as opposed to separation occurring).
In relation to the first financial agreement, the Court finds that the husband said to the wife, probably after the first financial agreement was presented to him by the wife and before it was signed by him, words to the effect, “I will sign anything to marry you.” This statement by the husband to the wife was consistent with the wife’s above statement to the husband (i.e. “If you don’t sign (the prenuptial agreement) then my parents will not allow us to marry”) having impacted upon the mind and will of the husband such that his ability to form a dispassionate and objective view as to whether the first financial agreement should be signed by him or not was probably absent.
The Court finds that it is likely that in late 2019 the husband had a telephone consultation with Ms L, solicitor, in relation to the first financial agreement, and gave her some information in relation to his assets and liabilities. In late 2019 Ms L provided this information to the wife’s solicitor Mr O and requested amendments to the first financial agreement accordingly.
The Court finds that it is likely that in late 2019 the husband met with Ms L at her office and that Ms L gave advice to the husband in relation to the first financial agreement. The wife was probably not present in Ms L’s office when Ms L advised the husband. The wife had arranged a meeting for the parties to see Ms L in her office and they travelled together by car. The wife herself in her trial affidavit filed 6 April 2023 refers to the parties’ “first visit to [Ms L]”. The husband signed the first financial agreement at his meeting with Ms L in late 2019.
The Court observes that the husband had had little time for careful reflection on the substantive terms of the first financial agreement having been presented with the document in late 2019 and having signed the document in late 2019. And further, he had had little time to reflect on the advice given to him by Ms L before signing the document.
As to the relative financial positions of the parties at the time of signing the first financial agreement, the wife’s net assets were $2,618,287, whereas the husband’s net assets were $808,500.
Having regard to the above matters, the Court finds that it is likely that at the time of signing the first financial agreement the husband’s capacity to make an independent judgment was so impaired that he was not acting in the free exercise of his independent and voluntary will. At the very least, at the time the husband signed the first financial agreement, the judgmental capacity of the husband was “markedly sub-standard” as a result of the effect upon his mind of the will of the wife.
The husband also sought to set aside the first financial agreement on the basis of unconscionable conduct by the wife. In the view of the Court, the first financial agreement is voidable for unconscionable conduct exerted by the wife upon the husband, and it should be set aside. The Court will now give its reasons for so finding.
The Court refers to and adopts its findings above in relation to undue influence. The Court finds that the husband, at the time of signing the first financial agreement, was subject to a special disadvantage. This special disadvantage can be described as follows: in circumstances where the husband was emotionally committed to marrying the wife, she had told the husband about six weeks before they were to be married that if he did not sign the first financial agreement her parents would not allow them to marry. This statement of the wife to the husband left him feeling shocked, dismayed and very stressed. The husband, before he signed the first financial agreement, told the wife words to the effect, “I will sign anything to marry you”. In these circumstances, the above statement of the wife had likely impacted upon the mind and will of the husband such that his ability to form a dispassionate and objective view as to whether the first financial agreement should be signed by him or not was probably absent.
This special disadvantage of the husband was known to the wife because she likely knew that the husband was emotionally committed to marrying her at the time she proffered the first financial agreement to him (about one week before it was signed), she had told him that if he did not sign the first financial agreement then her parents would not allow the parties to marry, and the husband had told her after the first financial agreement was presented to him by the wife and before it was signed by him, words to the effect, “I will sign anything to marry you”.
In the above circumstances, an onus was probably cast upon the wife to show that the first financial agreement was fair, just and reasonable, which was not discharged. The Court assesses that the first financial agreement was not fair or reasonable to the husband.
The Court observes that under the first financial agreement the husband would not be able to claim on the wife’s “separate property” referred to in the agreement (see Annexure A to the agreement) in the event of the breakdown of the marriage. Any contributions by him to the parties’ living expenses and/or homemaker contributions during the marriage would not be taken into account in determining whether he should have any entitlement to such separate property. Should the wife acquire property in her own name during the relationship such property would effectively remain her property: see clause 3 (“Joint property is all property which is not defined as separate property as per paragraph 2 herein”), clause 4(b) (“Any property acquired…by the parties shall be recorded in writing or by title documentation to be the asset…of one or other or both of them”), and clause 6(b) (“Joint property shall be divided between them in accordance with their entitlements as evidenced in writing or title documentation...”).
Accordingly, it was unconscionable for the wife to take advantage of the husband’s special disadvantage at the time he entered into the first financial agreement. The first financial agreement is voidable for unconscionable conduct.
It was contended by the husband that Ms L had failed to provide independent legal advice in accordance with s 90G(1)(b) of the Act. The Court rejects this contention and finds that such advice was provided by Ms L to the husband. Ms L had, at the time the first financial agreement was signed by the husband in late 2019, completed a signed statement by herself stating that the advice referred to in s 90G(1)(b) had been provided to the husband. It was not put to Ms L by the husband that her certificate was false. The Court observes that clause 7 of the first financial agreement headed “Independent legal advice”, referred to the parties’ statement and warranty to the other that, as certified in the annexure to the agreement (for the husband’s part, Ms L’s statement), independent legal advice was given.
The Court will now deal with the second financial agreement dated mid-2020 (‘the second financial agreement’).
In the view of the Court, the second financial agreement is voidable for undue influence exerted by the wife upon the husband, and it should be set aside. The Court will now give its reasons for so finding.
At about the time of settlement of the parties’ purchase of the property at Suburb H the wife told the husband that she would prepare a new financial agreement. In early 2020 the wife’s solicitor Mr O emailed to the wife a proposed second financial agreement and suggested to the wife that the parties update their asset list in that document. Thereafter the wife recommended to the husband that he use the legal services of P Law Firm being a legal firm in the same building as the wife’s solicitor Mr O; a solicitor in that practice of P Law Firm was Ms N.
In early 2020 the wife sent an email to Ms N seeking to confirm Ms N’s meeting with the husband the next day. Thereafter, on that day, the wife questioned and pressured the husband that he sign the second financial agreement without any changes, stating words to the effect, “You must sign the agreement, the [Suburb H] contract is due to settle in 3 days and I will lose my money.”
In early 2020 the parties attended the offices of Ms N at about 2 pm. Ms N and the husband had a consultation in Ms N’s office with the wife and her son waiting in the reception area. During this consultation the husband indicated to Ms N that he was not happy with the second financial agreement. He did not sign the second financial agreement at this time.
In mid-2020 Ms N emailed to the husband the proposed amended second financial agreement.
In mid-2020 the husband sent an email to Ms N asking her whether she thought the proposed amended second financial agreement was fair. Ms N replied by email that day to the husband stating, “It is about whether you understand what’s in the agreement. An agreement may be unfair, if the parties understand what’s in it and intend to be bound by it, then it is an agreement.”
In mid-2020 at about 5 pm the parties attended the offices of Ms N. The husband had a meeting with Ms N in her office. The wife waited directly outside Ms N’s office and listened to the meeting between Ms N and the husband. As the husband questioned Ms N telling her that he was still not happy “with the living expenses and mortgage contributions the way it’s written” (referring to the second financial agreement), the wife began to send multiple text messages to the husband including threatening ones to the effect, “If you ask any more questions, I will be quick to annul the wedding as it’s less than 6 months.” The Court accepts the husband’s evidence that Ms N noticed that the husband was distracted as she asked him words to the effect, “What’s wrong?”, and the husband told her words to the effect, “[Ms Kaleel] (the wife) is sending me text messages; she is listening in.” The husband’s oral evidence that the wife had repeatedly sent him text messages whilst he was having his meeting with Ms N to the effect that if the husband kept on asking questions (to Ms N) the wife would divorce him was consistent with his affidavit evidence relating to the threatening text messages being sent by the wife to the husband during his meeting with Ms N.
The husband told Ms N, despite Ms N’s advice to the husband not to sign the second financial agreement, that he wanted to sign the document and he signed it at 6.30 pm. The Court accepts the husband’s evidence that despite Ms N advising him not to sign the second financial agreement he felt under duress and signed the agreement.
When the husband left Ms N’s office, the wife was waiting for him outside the office door and the husband was very uncomfortable. The wife then took the second financial agreement that had been signed by the husband. The parties went upstairs to see the wife’s solicitor and the wife signed the second financial agreement.
In the circumstances, the husband had little time to reflect on the advice given to him by Ms N before signing the document.
As to the relative financial positions of the parties at the time of signing the second financial agreement, the wife’s net assets were $1,814,287, whereas the husband’s net assets were $376,500.
Having regard to the above matters, including the adverse effect upon the husband of the threatening text messages sent by the wife to the husband during his meeting with Ms N (the wife waiting directly outside the office of Ms N whilst she listened to the meeting occurring) that she would effectively end their marriage if he continued to ask questions to Ms N, the Court finds that it is likely that at the time of signing the second financial agreement the husband’s capacity to make an independent judgment was so impaired that he was not acting in the free exercise of his independent and voluntary will. At the very least, at the time the husband signed the second financial agreement, the judgmental capacity of the husband was “markedly sub-standard” as a result of the effect upon his mind of the will of the wife.
The husband also sought to set aside the second financial agreement on the basis of unconscionable conduct by the wife. In the view of the Court, the second financial agreement is voidable for unconscionable conduct exerted by the wife upon the husband, and it should be set aside. The Court will now give its reasons for so finding.
The Court finds that the husband, at the time of signing the second financial agreement, was subject to a special disadvantage. This special disadvantage can be described as follows: the husband had been emotionally committed to marrying the wife and the parties had married in 2019; in early 2020, the wife had questioned and pressured the husband that he sign the second financial agreement without any changes; and then in mid-2020 the wife, whilst the husband had his meeting with Ms N in her office, sent the husband threatening text messages to the effect that she would effectively end the parties’ marriage if he continued to ask questions to Ms N. In particular, this conduct of the wife towards the husband in mid-2020 led the husband, despite the advice of Ms N not to sign the second financial agreement, to feel under duress and thereby sign the second financial agreement. Accordingly, and in summary, the husband’s special disadvantage at the time of signing the second financial agreement was that the husband’s ability to form a dispassionate and objective view as to whether the second financial agreement should be signed by him or not was probably absent. It follows that this special disadvantage seriously affected the ability of the husband to make a judgment as to his own best interests in relation to the second financial agreement.
This special disadvantage of the husband was known to the wife because she likely knew that the husband was emotionally committed to the marriage; in early 2020, the wife had questioned and pressured the husband that he sign the second financial agreement without any changes; and she had threatened the husband in mid-2020 that if he continued to ask questions to Ms N she would effectively take steps to end the parties’ marriage.
In the above circumstances, an onus was probably cast upon the wife to show that the second financial agreement was fair, just and reasonable, which was not discharged. The Court would assess that the second financial agreement was not fair or reasonable to the husband.
The Court observes that under the second financial agreement the husband would not be able to claim on the wife’s “separate property” referred to in the agreement (see Annexure A to the agreement) in the event of the breakdown of the marriage. Any contributions by him to the parties’ living expenses and/or homemaker contributions during the marriage would not be taken into account in determining whether he should have any entitlement to such separate property. Regarding the G Street, Suburb H property, any labour contributed by the husband towards renovations would not be taken into account in assessing his contributions towards that property.
Accordingly, it was unconscionable for the wife to take advantage of the husband’s special disadvantage at the time he entered into the second financial agreement. The second financial agreement is voidable for unconscionable conduct and should be set aside.
It was faintly contended by the husband that Ms N had failed to provide independent legal advice in accordance with s 90G(1)(b) of the Act. The Court rejects this contention and finds that such advice was provided by Ms N to the husband. Ms N had, at the time the second financial agreement was signed by the husband in mid-2020, completed a signed statement by herself stating that the advice referred to in s 90G(1)(b) had been provided to the husband. It was not put to Ms N by the husband that her certificate was false. The Court observes that clause 8 of the second financial agreement headed “Independent legal advice”, referred to the parties’ statement and warranty to the other that, as certified in the annexure to the agreement (for the husband’s part, Ms N’s statement), independent legal advice was given.
The Court accepts the husband’s evidence relating to a s 90C financial agreement signed by Ms Q who was previously in a relationship with the husband. The Court does not accept the wife’s submission that the husband lied in relation to this document.
PROPERTY
Evidence
The Court has considered the documentary material relied upon by the parties discussed previously in these Reasons, and the oral evidence of the parties adduced at the trial. The standard of proof applied by the Court in respect to the evidence is the balance of probabilities. The Court does not propose to set out the entirety of the evidence. Relevant evidence relating to the issues to be determined will be set out below and under the headings “Balance sheet”, “Contributions”, and “Section 75(2) of the Act”. Where there is any conflict between the evidence referred to below and under those headings, the evidence under the headings shall take precedence.
Again, the parties were each cross-examined. The husband was a satisfactory witness. The wife proved to be an unreliable witness as discussed previously in these Reasons.
Legal principles
In Lotta & Lotta [2017] FamCA 50 Foster J stated:
281 The approach to the determination of an application under s 79 of the Act is set out in Stanford v Stanford (2012) 247 CLR 108 and further considered by the Full Court in Bevan & Bevan [2014] FamCAFC 19, Chapman & Chapman (2014) FLC 93–592 and Scott & Danton [2014] FamCAFC 203.
282The Court must identify the existing legal and equitable interests of the parties in the property, the liabilities and financial resources of the parties at the time of the hearing and then whether it is just and equitable to make a property settlement order.
283Such a consideration should not be guided by an assumption that the parties’ rights to or interests in property are or should be different from those that then exist. The question is whether those rights and interests should be altered.
284There is no presumption that one or other party has the right to have the property of the parties divided between them or a right to an interest in marital property that is fixed by reference to the various matters in s 79(4). The Court needs to conclude that it would be unjust or unfair to leave property rights intact under s 79(2) of the Act.
285In many cases this requirement is readily satisfied where the parties are no longer in a marital or de facto relationship and, thus, for example, the common ownership or use of property by husband and wife will no longer be possible or the express or implicit assumptions that underpinned existing property arrangements such as the accumulation of assets or financial resources by one for the benefit of both have been brought to an end with the relationship.
286In particular, such a circumstance arises where both parties seek property adjustment orders but are unable to agree as to same. Here the wife seeks an order for adjustment of property and the husband contends that there should be no such adjustment.
287It is thus important to ascertain the present property and resources of the parties so as to facilitate a consideration of the s 79(2) question.
288In some circumstances it is not possible to determine whether it is just and equitable to make adjustment orders as to the parties’ present property rights without a consideration of s 79 (4) matters.
289Section 79(4) requires a consideration of the contributions made by the parties as defined in s 79(4)(a) to (c). The Court must then consider s 79(4)(d) to (g) in particular the subjective considerations as to the parties by having regard to the provisions of s 75(2) in so far as they are relevant (s 79(4)(e)).
290The Court can then consider the “justice and equity” of the actual orders to be made: Russell & Russell (1999) FLC 92–877; Teal & Teal [2010] FamCAFC 120, in the context of the Court’s obligation to make “appropriate orders” as provided for in s 79(1) of the Act.
Balance sheet
The final agreed balance sheet of the parties, Exhibit F, is now set out:
BALANCE SHEET Ownership Description Applicant’s value Respondent’s value Assets 1 Joint D Street, City E NSW $118,000 $0 2 Joint B Street, Suburb C NSW $1,900,000 $1,900,000 3 Respondent R Street, Suburb S $1,850,000 $1,850,000 4 Respondent T Street, Suburb U $1,600,000 $1,600,000 5 Applicant Motor Vehicle 1 $5,000 $5,000 6 Applicant Motor Vehicle 2 $30,000 $30,000 7 Applicant Household Items $2,800 $2,800 8 Respondent ANZ Account #...81 $91,168 $91,168 9 Respondent Westpac Loan #...24 Credit Faciity (sic) $2,583 $2,583 10 Respondent Westpac Offset Account #...08 $6,753 $6,753 11 Respondent Westpac Investment Account #...73 $544 $544 12 Respondent Westpac Offset Account #...24 $6,175 $6,175 13 Respondent V Bank Account #...68 $1,292 $1,292 14 Respondent Ms Kaleel's son's account $532 $532 15 Respondent W Company Shares of 2,470 $8,645 $8,645 16 Respondent Household Items $12,000 $12,000 17 Applicant Bank Accounts - Westpac $762 $762 18 Applicant Financial resource $3,903 $3,903 20 Joint Funds held in trust from Suburb H Proceeds (by wife’s former solicitor) $16,000 $16,000 21 Respondent Jewellery $6,000 $6,000 Total $5,662,157 $5,544,157 Addbacks Nil Nil Total $0 $0 Liabilities 30 Joint Mortgage for Suburb C Property $1,409,231 $1,409,231 31 Applicant Loan $25,382 $25,382 32 Applicant Westpac $19,256 $19,256 33 Applicant Car Loan $45,000 $45,000 34 Applicant Credit Card $1,950 $1,950 35 Applicant Credit Line $2,900 $2,900 36 Applicant Child Support Debt $0 $0 37 Applicant Credit Card $4,400 $4,400 38 Applicant Revenue NSW Debt $2,700 $2,700 39 Respondent Credit Card @19 August 2023 $4,462 $4,462 40 Joint Real Estate Agent $12,000 $12,000 41 Respondent ANZ …28 (Jul 2023) $1,107,860 $1,107,860 42 Respondent Westpac Mortgage $633,938 $633,938 Total $3,269,079 $3,269,079 Superannuation Member Name of Fund & Type of Interest Applicant’s Value Respondent’s Value 45 Applicant Super Fund 1 $43,983 $43,983 46 Respondent Super Fund 2 $70,458 $70,160 Total $114,441 $114,143 Financial Resources Ownership Description Applicant’s Value Respondent’s Value 45 46 Total $0 $0 Net Total Assets Total $2,507,519 $2,389,221
As to the value of the parties’ interest in the property at City E, the husband ultimately contended that the figure of $799,000 should appear as Item 1, with a corresponding liability (see Item 21 below) of $719,100. The wife essentially agreed with this approach however contended that the wife’s payment of stamp duty should be reflected in the value of the asset.
The parties have an equitable interest in the City E property. The value of that equitable interest is probably the purchase price under the purchase contract dated early 2020, $799,000, less the balance of purchase price, $719,100, being $79,900. Accordingly, the sum of $799,000 shall enter the balance sheet under Item 1. The balance of purchase price of $719,100 shall be entered as a corresponding liability (Item 21) in the balance sheet. The payment of stamp duty is not relevant for this valuation issue relating to the parties’ equitable interest, and will be taken into account (see below under Contributions) as a contribution by the wife.
As to Item 46, the minor difference in values in relation to the wife’s superannuation ($70,458 as per the husband, and $70,160 as per the wife, a difference of $298, the Court will adopt the figure of $70,458, taking into account that the wife’s superannuation figure in her Financial Statement filed 5 October 2023 is $71,081.
The final balance sheet accordingly will be as follows:
BALANCE SHEET Ownership Description Value Assets 1 Joint D Street, City E NSW (‘City E Property’) $799,000 2 Joint B Street, Suburb C NSW (‘Suburb C Property’) $1,900,000 3 Respondent R Street, Suburb S (‘Suburb S property’) $1,850,000 4 Respondent T Street, Suburb U (‘Suburb U property’) $1,600,000
5 Applicant Motor Vehicle 1 $5,000 6 Applicant Motor Vehicle 2 $30,000 7 Applicant Household Items $2,800 8 Respondent ANZ Account #...81 $91,168 9 Respondent Westpac Loan #...24 Credit Facility $2,583 10 Respondent Westpac Offset Account #...08 $6,753 11 Respondent Westpac Investment Account #...73 $544 12 Respondent Westpac Offset Account #...24 $6,175 13 Respondent V Bank Account #...68 $1,292 14 Respondent Ms Kaleel's son's account $532 15 Respondent W Company Shares (2,470) $8,645 16 Respondent Household Items $12,000 17 Applicant Bank Accounts - Westpac $762 18 Applicant Financial resource $3,903 19 Joint Funds held in trust from Suburb H Proceeds (by wife’s former solicitor) $16,000 20 Respondent Jewellery $6,000 Total $6,343,157 Liabilities 21 Joint Balance purchase price: City E property $719,100 22 Joint Mortgage for Suburb C Property $1,409,231 23 Applicant Loan $25,382 24 Applicant Westpac $19,256 25 Applicant Car Loan $45,000 26 Applicant Credit Card $1,950 27 Applicant Credit Line $2,900 28 Applicant Child Support Debt $0 29 Applicant Credit Card $4,400 30 Applicant Revenue NSW Debt $2,700 31 Respondent Credit Card $4,462 32 Joint Real Estate Agent (sale of G Street, Suburb H) $12,000 33 Respondent ANZ …28 (Jul 2023) (Suburb S property) $1,107,860 34 Respondent Westpac Mortgage (T Street, Suburb U property) $633,938 Total $3,988,179 Superannuation Member Name of Fund & Type of Interest Value 35 Applicant Super Fund 1 $43,983 36 Respondent Super Fund 2 $70,458 Total $114,441 Net Total Assets Total $2,469,419
Accordingly, the parties’ non-superannuation assets are $6,343,157, their liabilities are $3,988,179, leaving net non-superannuation assets of $2,354,978. Their superannuation assets total $114,441. The net total assets are thus $2,469,419.
Section 79(2) of the Act
The Court is satisfied that it is just and equitable in this case to alter the property interests of the parties in light of the breakdown of their relationship, the fact that they will no longer have the joint use and enjoyment of their property, and the fact that the continuance of the current legal ownership of their property would not afford them justice and equity.
Contributions
The parties’ relationship spanned the period from about commencement of cohabitation in June 2019 to separation in about October 2021; a period of a little over two years. There were no children of the relationship.
At about the time of cohabitation, the wife held net property, including cash, real estate and superannuation, in the sum of about $2,618,287. At about the time of cohabitation, the husband held net property, including cash, real estate and superannuation, in the sum of about $808,500. The total of these sums is $3,426,787.
Prior to cohabitation, the wife had entered into an off the plan purchase contract for a property at T Street, Suburb U as purchaser. The Court refers below to the wife’s later settlement of the purchase of this property at Suburb U.
In about in mid-2019 the husband entered into a purchase contract to buy a property at Suburb X. The purchase failed and in about late 2021 the husband lost his deposit of about $83,500.
In late 2019 the husband sold his Suburb Y property for $870,000 receiving net proceeds of $150,000.
In about early 2020 the parties purchased a property at G Street, Suburb H for $1,760,000 subject to a mortgage from CBA. The husband used the proceeds from the sale of his Suburb Z property (contract for sale dated early 2020) in the sum of about $120,000 while the wife contributed about $675,122 from the sale of her Suburb AA property. Shortly after exchange, on request from the bank, the husband transferred the title to the G Street, Suburb H property to his name so that the home loan would be approved. He then commenced solely paying the mortgage. The husband paid about $21,221 towards the mortgage repayments, insurances, loan fees, in respect to this property.
The husband became aware in early 2020 that the Suburb H property was structurally unstable. The husband started to demolish and renovate this property from about mid-2020 until early 2021 spending 30 hours weekly in labour building new rooms and extensions. He spent some modest monies for building materials. The wife carried out some painting work for this property prior to its sale.
In early 2021 the Suburb H property was sold for $1,856,000 (settlement date mid-2021) with proceeds of about $771,855. The husband received $116,600. The wife received $655,255.
In early 2020 the parties purchased off the plan as joint tenants a property at D Street, City E, NSW, with the husband contributing $35,912 for part deposit, and the wife contributing $43,988 for part deposit, and she paid the stamp duty of $31,759. The settlement of the purchase of this property has not yet occurred.
In about early 2020 the wife completed the purchase of the above property at T Street, Suburb U utilising the proceeds of sale of her property at BB Street, Suburb U and Suburb CC, together with a mortgage loan.
The husband carried out some painting work to the wife’s Suburb CC property (an apartment). He carried out some fencing installation work at her Suburb S property. The wife carried out some painting work to the husband’s Suburb Z property.
At some time after mid-2020 the wife sold her property at DD Street, Suburb H and received sale proceeds of $203,711.
A property at B Street, Suburb C NSW was purchased in mid-2021 for $1,815,000 with 99 per cent ownership by the wife and 1 per cent ownership by the husband. The husband did not contribute to the purchase of this property. The wife had decided to use her share of the proceeds of sale of the G Street, Suburb H property to purchase this property. A mortgage loan from EE Company was taken out to assist in the purchase of this property.
There is no significant evidence that the husband contributed towards the wife’s W Company shares, $8,645 (Item 15), as they were already owned by her at cohabitation commencement.
As to homemaker contributions, during the relationship the wife facilitated the husband residing for certain periods in her residences and her parent’s residence. From early to mid‑2020 the parties resided in the husband’s leased apartment at City E. During the relationship each party probably paid for various day to day living expenses pertaining to them. The husband did some cooking and the wife carried out cleaning work at the residences they resided in during their relationship. It is apparent that during the parties’ relationship the wife was providing significant care for her child (from a former relationship); the wife herself stated in her trial affidavit that when the parties got married she had a young son to look after and did not need someone else to look after.
The Court finds that neither party made any relevant contribution to the other party’s superannuation entitlements at any time. The Court observes that the husband’s superannuation asset at about the time of cohabitation was $250,000, and it was the same value as at 1 June 2020. It is now valued at $43,983, confirming that the husband has likely made withdrawals from this asset. The wife’s superannuation asset was $60,000 at about the time of cohabitation and it was the same value as at 1 June 2020. Her superannuation is now valued at $70,458.
It can be seen that at cohabitation commencement the parties between them brought in net assets including superannuation of about $3,426,787 yet at trial date their net assets including superannuation were $2,469,419. The Court is not persuaded, on the balance of probabilities, that either party committed any relevant wastage in respect to any matrimonial assets.
The husband contended that his contributions should be assessed at 24 per cent (in paragraph 15 of the husband’s affidavit filed 19 March 2023 he asserts that his assets as at cohabitation commencement represented about 24 per cent of the asset pool).
The wife contended that her contributions should be assessed at 90 per cent.
Taking into account all the above discussed matters, and viewing the parties’ contributions holistically, the Court finds that the wife’s contributions should be assessed at 90 per cent and the husband’s at 10 per cent but only in respect to the parties’ non-superannuation assets. In respect to the parties’ non-superannuation assets of $2,354,978, the Court’s contribution findings result in a disparity of $1,883,983 in the wife’s favour.
Section 75(2) of the Act
This was a short relationship of a little over 2 years.
The husband is aged 64 years, soon to turn 65 years. The wife is aged 48 years.
In relation to the husband’s health, Dr FF’s (GP) short letter dated 20 October 2022 states that the husband suffers from serious medical conditions. The letter states that the husband needs regular close medical review and monitoring to prevent potentially severe complications.
The medical report of Dr M, GP, dated 2 March 2023 (Exhibit E) states, inter alia, that the husband was admitted to hospital in early 2023 with serious medical conditions. The report states that the husband is making a great effort in making lifestyle changes and he has embraced a healthy diet to lose weight along with increased exercise.
The husband’s medical evidence does not clearly address his prognoses in relation to his health conditions and nor does it address any suggested loss of earning capacity.
The husband has a 10-year-old child from a former relationship and pays child support.
The husband works as a professional full-time. His employer is HH Company; he has been working with them for over 1.5 years. His total average weekly income from employment before tax is $3,253 or $169,156 per annum (the husband also receives $500 per week from sub-letting a second room according to his Financial Statement filed 24 April 2023). He asserts that he has three years remaining to retirement however there is no significant objective evidence to suggest that such asserted imminent retirement need necessarily occur by reason of the husband’s age.
The wife has a child aged 14 years from a former relationship. That child has complex medical issues. The child may require future surgeries however the timing of such surgeries is unclear. The child may well need to undergo medical treatment.
The wife works in casual employment as a professional. She states that her average weekly salary or wages before tax is $56. She receives investment income of average weekly $46.
The husband’s earning capacity is significantly greater than the wife’s earning capacity whilst acknowledging that his working life will likely end before the wife’s working life.
The wife’s total net property is significantly greater than the husband’s total net property.
The wife’s parents have provided some financial support to the wife. The husband has no such support.
The husband sought a 5 per cent adjustment under s 75(2) relating to, inter alia, his asserted imminent retirement, his lack of cash reserves, and health related needs.
The wife sought a 5 per cent adjustment under s 75(2) relating to, inter alia, the ongoing care of her son and her inferior earning capacity.
Taking into account all the above discussed matters, there should be no adjustment in favour of either party.
Justice and equity
Each party should retain their respective superannuation assets.
The wife’s 90 per cent of the net non-superannuation assets ($2,354,978) is $2,119,480.
The husband’s 10 per cent of the net non-superannuation assets ($2,354,978) is $235,497.
Should the husband retain:
(a)His personalty (as per the balance sheet): $42,465,
less his debts (as per the balance sheet): $101,588,
the resulting figure is minus $59,123.
Should the wife retain:
(a)The parties’ equitable interest in the City E property: $79,900;
(b)The Suburb C property: net $490,769;
(c)The Suburb S property: net $742,140;
(d)The T Street, Suburb U property: net $966,062;
(e)Her personalty including cash at bank (as per the balance sheet): $135,692;
(f)The trust monies from the G Street, Suburb H sale: $16,000;
Total $2,430,563,
Less:
(a)Her debts (as per the balance sheet): $4,462;
(b)The real estate agent debt: $12,000;
Total $16,462,
the resulting figure is $2,414,101.
To enable the husband to receive his 10 per cent share of the net non-superannuation assets, $235,497, the wife will need to pay the husband $294,620 ($59,123 + $235,497).
The wife should be given 10 weeks to pay the above sum of $294,620 to the husband failing which the Suburb C property should be sold to enable this sum to be paid to the husband. In this context, the Court observes that the evidence is unclear as to when the City E property purchase contract is due to be settled including whether the wife could sell the equitable interest in that property in a timely fashion.
Pursuant to the Court’s contribution findings, the wife will be left with significant assets, and modest superannuation. The husband will be able to pay off his debt if he so chooses and retain funds which may enable him to purchase real estate or otherwise maintain rental accommodation and invest his remaining funds. He will be left with modest superannuation.
The Court is of the view that its proposed property adjustment orders will represent a just and equitable property settlement between the parties.
The Court makes Orders accordingly.
I certify that the preceding one hundred and thirty-nine (139) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Newbrun. Deputy Associate:
Dated: 1 February 2024
0
10
1