Mardones and Mardones
[2012] FMCAfam 323
•18 April 2012
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| MARDONES & MARDONES | [2012] FMCAfam 323 |
| FAMILY LAW – Property and children’s issues – financial agreement in 2010 – agreement allegedly obtained in circumstances that were unconscionable – whether agreement should be set aside – amount of time children spend with each parent – criticism of family report writer – family report recommendations accepted. |
| Family Law Act 1975, ss.90C, 90G(1)(a), 90G(1)(b), 90G(1)(c), 90K, 90K(1)(e) Evidence Act 1995, s.140 |
| Goode v Goode [2006] FamCA 1346 Senior v Anderson [2011] FamCAFC 129 Commercial Bank of Australia Ltd v Amadio & Anor (1983) 1514 CLR 447 |
| Applicant: | MR MARDONES |
| Respondent: | MS MARDONES |
| File Number: | MLC 6047 of 2011 |
| Judgment of: | Burchardt FM |
| Hearing dates: | 1 & 2 March 2012 |
| Date of Last Submission: | 2 March 2012 |
| Delivered at: | Melbourne |
| Delivered on: | 18 April 2012 |
REPRESENTATION
| Counsel for the Applicant: | Mr A. Robinson |
| Solicitors for the Applicant: | Plaza Legal |
| Counsel for the Respondent: | Ms P. Treyvaud |
| Solicitors for the Respondent: | Slater & Gordon |
ORDERS
Property Issues
That pursuant to s.90K of the Family Law Act 1975 the Financial Agreement between the parties dated 17 September 2010 be set aside.
That there be a further sworn valuation of the matrimonial home, with a valuer chosen by agreement or in default by the President of the Real Estate Institute of Victoria.
Children’s Issues
That the wife and the husband have equal shared parental responsibility for making decisions about the long-term care, welfare and development of the children of the marriage [X] born [in] 1999, [Y] born [in] 2001 and [Z] born [in] 2003.
That the wife and the husband each have responsibility for making decisions about the day-to-day care, welfare and development of the children during periods when each child is living with or spending time with them.
That the children live with the wife.
That the children spend time and communicate with the husband:
(i)from after school on Thursday until before school on Friday in one week;
(ii)from after school Friday until before school on Monday on the other week;
(iii)by telephone communication with each parent when they are not in that parent’s care on a liberal voluntary basis but not less than once during each period that the child is with each parent.
That each of the parents make available internet webcam chat to enable the children to communicate with the parent with whom they are not spending time.
The children spend time with the parents at Christmas and Easter as agreed.
The wife not leave the children at home without the presence of an adult.
IT IS NOTED that publication of this judgment under the pseudonym Mardones & Mardones is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT MELBOURNE |
MLC 6047 of 2011
| MR MARDONES |
Applicant
And
| MS MARDONES |
Respondent
REASONS FOR JUDGMENT
Introductory
This is a children and property dispute fought tenaciously between parties who unfortunately have been deeply dissatisfied with one another for many years.
The applicant husband seeks that the three children of the relationship live with him on a week-about basis and the respondent wife seeks that they live with the husband for five nights out of 14, as recommended by Mr L, the family report writer.
So far as property is concerned, the husband seeks that a financial agreement entered into between the parties on 17 September 2010 be enforced and the wife seeks that it be set aside. In the event that the agreement is set aside, the husband seeks a 60/40 split of the parties’ assets in his favour and the wife seeks a 65/35 split in her favour. Both parties agree that if the agreement is not enforced, superannuation should be combined and split equally. This would have the net effect of requiring an adjustment in the wife’s favour of some $39,107.
It should be noted that the chattels have been divided by consent between the parties in the form indicated by document MFI-2.
For the reasons that follow, I think that the children should live with the parents in accordance with the recommendations of Mr L, that the financial agreement should not be upheld, and that the property of the parties should be split between them in the proportions of 52½ per cent in favour of the wife and 47½ per cent in favour of the husband.
Facts which are not in substantial disagreement
The parties met at some point in 1993 and bought the matrimonial home in about October of that year. The purchase price was $120,000.
The parties commenced cohabitation, according to the husband, in March 1994 (the wife says February 1994) and were married on [in] 1994.
The wife was born [in] 1971 and the husband [in] 1964. She earns about $35,000 per year as an [omitted], working part-time for four days per week, and he earns about $75,000 a year as a [omitted].
The parties have three children. [X] was born [in] 1999, [Y] [in] 2001 and [Z] [in] 2003.
It is common cause that the relationship ran into difficulties by no later than 2004. At or about this time, for reasons to which I shall return, the wife started to engage in a social life on her own without the husband.
On Christmas Day 2004, the husband was involved in an incident with his brother-in-law Mr O which, it appears, caused considerable distress to him. He says he was assaulted by Mr O. Mr O’s wife is called Ms S.
At a point thereafter, the wife went to see the husband’s mother in circumstances which led the husband to feel that the wife had let him down, so to speak, by seeing Ms S and/or Mr O (the evidence is not entirely clear). In either event, the husband felt deeply betrayed by this conduct and reproached the wife for it, notwithstanding that she said she did not know that Ms S and/or Mr O would be there.
Although the wife apologised orally, the husband wanted an apology in writing and the wife, in due course, provided it. It is clear from material put in cross-examination that the apology addressed inter alia what was described as “liaisons” with other men. I note that although apparently in possession of the document, counsel for the father did not seek to tender it. Its date of composition and presentation to the husband is unclear, although from the materials as a whole it would seem likely to have occurred at some point between 2006 and 2009.
In 2009, the husband found some condoms in the wife’s handbag. This alerted him to the fact that she must have been conducting an affair because her fallopian tubes were tied. The wife says he was very angry and he says he was very upset. In any event, at a point thereafter in March 2010, the parties executed a document titled “Code or conduct marriage Contract 5/3/2010”, which is Annexure SDM-1 to the husband’s affidavit filed on 24 October 2011.
Subsequently on 17 September 2010, the parties executed what purported to be a binding financial agreement between them pursuant to which the wife was to obtain 45 per cent of the value of the matrimonial home, the parties were to retain all property in their possession as at the date of the agreement and to forego superannuation benefits belonging to each other. There were other terms as to chattels and savings.
The parties agree that separation between them occurred finally in April 2011. As I have earlier indicated, so far as property matters are concerned, the preliminary question to be decided is the force and effect of the agreement executed by them in September 2010.
The factual matters not agreed
A substantial proportion of the case was concerned with the credit of the parties. Despite some reservations expressed by the Court, both counsel, who are experienced and well respected, insisted upon extensive cross-examination on matters in respect of which the Court expressed reservations as to relevance. It is appropriate therefore to say something about the credit of the husband and the wife.
The husband was in many ways an excellent witness. He responded very directly to questions put to him under cross-examination. He readily made a number of concessions which would ordinarily be thought to be against interest. He admitted shouting at a neighbour in January 2011. He admitted calling the wife, very shortly before the trial, “a slut and a $2 whore”. He readily conceded that during an earlier argument, he had threatened to bulldoze the family home. He clearly believed the truth of what he was saying and was, in that sense, an eminently truthful witness. Nonetheless, that does not mean that everything he said was correct, and I shall return to this.
The mother was, by way of contrast, a far less impressive witness. She was unresponsive and self-serving in a number of her answers. Her answers given in particular to the latest material she had apparently posted on Facebook, to the effect that it was a social website for her, were unconvincing both as to their content and as to the style in which they were given. Nonetheless, while superficially she was a less believable witness than the applicant, that is not the end of the matter either. This is a case in which both parties’ evidence falls to be considered against objectively established facts and against the norms of human experience.
I should emphasise that I have had regard to all the evidence filed and said by the parties in this case. I do not propose to deal in detail with each and every matter they have raised. I have already set out my general observations as to the credit and demeanour of the witnesses. What I find to have occurred in this relationship is as follows.
It is the husband’s case, and it is regrettable to have to deal with it in terms but unavoidable, that his wife was at all times far more strongly-sexed than he and that he struggled to satisfy her demands. According to him, by about 2006 at the latest, she was engaging in several affairs with other men and was putting her own pleasures before her obligations as a mother. Despite an ongoing and generalised dissatisfaction on his part, which found its effect in part in the letter of apology that was not exhibited, things limped along until 2009 when he discovered the affair which, as it transpired, was with a Mr C. It seems clear that the wife admitted the affair to the husband in early 2010.
It was the husband’s case that the wife had at all times worn the trousers in the relationship, that she always got what she wanted and that the financial agreement ultimately entered into reflected her overwhelming desire to continue the affair at the expense of her own financial benefit.
It should be noted that the husband suffers from a number of health problems. He suffers from migraines which, although the wife says are greater and he says are less, do plainly obtain and would be debilitating to an extent.
The husband also suffers from sarcoidosis which the wife says leaves the husband debilitated but which the husband denies. I note, however, that the husband does also admit that since he became ill (and the sarcoidosis appears to have become more significant in 2004) his incapacity to satisfy his wife’s physical needs appears to have been accentuated.
It seems clear to me that whether for that reason or for some general deficiency in the interpersonal relationship that at about that time (about 2004), the wife started to branch out. She started going out on weekends with friends and started to make other relationships.
The wife’s evidence is that these relationships advanced to a point that she felt uneasy and felt that the marriage would not succeed if she did not, so to speak, pull back from them. As a result, she says the parties went to marriage counselling. The husband says that she cancelled these sessions after only four, but the wife says that the counsellor told her there was no point in continuing because the husband was so angry. Having regard to his evidence as a whole, I have no doubt that the wife’s assertion is correct.
Much was made in cross-examination of the wife by the use of the word “liaison.” I accept the wife’s explanation that while she plainly formed attachments that were more than those of ordinary friendship, and was troubled by these developments, nonetheless, I do not accept the evidence of the husband that she had several sexual relationships in about 2006.
What is striking is that following on from the incident with Mr O and Ms S, a grievance to which the supposed sexual relationships were apparently added, the husband not only was sufficiently concerned to extract an apology from the wife orally, but he insisted that it be put in writing in what, I take it, must have been some self-lacerating way.
That the wife was prepared to do this shows both that she had acted in a fashion with which she was not wholly comfortable and that her will was overborne by the husband. One might wonder what sort of man would wish to be nagging his wife several years after the event about an isolated unpleasant incident at Christmas 2004. One would further wonder about what sort of a man would require his wife to give him a written apology for any of her conduct in any event.
Each of the parties had all too much to say about the shortcomings of the other. It is clear that the wife worked as best she could during the upbringing of the children but had been, to a considerable extent, a stay-at-home mother to look after the three children who are still young.
Equally, it is clear that the husband is an outstanding employee for [omitted]. He has a terrific work record and is clearly highly regarded in that respect.
Each party sought to suggest that the other had significant problems with drugs and/or alcohol. It was the wife’s case that the husband drank himself into a stupor pretty much every night since 2004. It was the father’s case that the wife abused prescription drugs (his and otherwise) and that she likewise was prone to significant alcohol abuse. He pointed to an incident at [omitted] Casino in this regard.
I have no doubt that because of the intensity of their emotions, both parties have grossly exaggerated these matters. I accept the husband’s evidence that he, on his doctor’s advice, was in the habit, from about 2004 onwards, of having wine to drink to allay the effects of his sarcoidosis, and I further accept that he has reduced in more recent times. He has almost certainly had more to drink than he has revealed, but I do not accept for an instant the proposition that he drank himself into a stupor routinely. As counsel for the husband pointed out in cross-examination, such an observation stands wholly at odds with his many hours of driving, his many booze bus encounters in the course of that driving, and the total absence of convictions.
Similarly, the incident at [omitted] Casino, while it may well have been more than the wife recalls (I note that she says she can only tolerate one or two glasses of wine and it is highly probable that on at least one occasion over the years, she has had more than that) it was not a matter of any moment. Likewise, her drink-driving conviction was an isolated and minor matter.
Insofar as significant criticism is made of the wife’s parenting skills as a mother, this is a matter to which I shall return when I consider children’s issues but it is sufficient for present purposes to say that despite some inadequacies, it is plain that she has been the primary carer.
Children’s Issues
The family report writer, Mr L, was called first. He adopted his report on oath. His report recommended that the children live primarily with their mother, and while he did not deal with the matter in his report in terms, it is implicit that he has supported joint parental responsibility. He recommended that the children live with the parents in a 9/5 pattern with four nights from Thursday to Sunday in one week and Thursday to Friday in the other.
Mr L was cross-examined extensively and, if I may say so, with considerable skill by counsel for the husband. Mr L confirmed that there were no difficulties with alcohol on the part of either parent that were not susceptible of control by appropriate undertakings.
Mr L reported that the two boys of the relationship had essentially wanted what was fair, although he doubted that [Z] had understood what he meant by this. He confirmed that [Y] was not as inclined to a 50/50 split as to time and wanted a stable base with her mother. Although Mr L conceded that one extra night in one block was possible instead of one night in the alternate week, it would nonetheless be a long time away from the father. He confirmed that it remained his opinion that the better split would be 9/5 with one night in the off week. He confirmed that he did not recommend equal shared time in this case as one child did not want it. He confirmed that although [X] said that this was what he wanted, he did not think that [X] understood what it meant for him, but rather that [X] wanted to resolve his parents’ problems. He said that collaboration between the parents was missing and the transference from school to school would be easier than between the parents. Under cross-examination by counsel for the wife, he confirmed, relevantly, that the mother was the primary attachment for the children and that after separation, the children would need stability.
The evidence of Ms M and Mr M, who were called as witnesses on behalf of the husband, needs to be addressed. Both are very long-standing friends of Mr Mardones. The evidence of Ms M was highly partisan. She asserted that the wife was a chronic liar, that she did not think much of her as a mother and that she is not a very nice person.
The relevant parts of her evidence were to the effect that when she and her husband used to visit Mr Mardones, the children might be playing in the street with the mother absent. She said that the husband was a fantastic father and indeed more like a mother to the children than the mother was.
The relevant evidence of Mr M was that he had seen the wife hit [Z] about two years ago when she gave him a bit of a slap on the bottom.
So far as their evidence generally is concerned, it is apparent that
Mr and Ms M are highly aligned and partisan witnesses. They are obviously honest witnesses telling the truth as they saw it, but their capacity to do so is significantly inhibited by their friendship with the husband and their disdain for the wife. I accept that the wife did slap [Z] because the wife herself confirmed this. She said that she gave him a slap on the backside. This conduct, whilst not attractive, does not go nearly as far as the way in which the matter was described in
Mr M’ affidavit filed 19 January 2012. What the affidavit actually says at paragraph 14 is:
“I have seen the Wife yell, scream, shake and slap her youngest son (approximately six years old at the time) for being sick and vomiting.”
In fact the wife, while she may have shouted at him, gave him a slap on the backside as she admitted. The overstated tenor of the evidence in the affidavit speaks for itself.
It was the husband’s evidence that he had been far more involved with the children than would normally be the case for a father. His shifts had enabled him to look after them for substantial periods of time. His evidence was that the wife was simply out at the gym three times a week and pursuing her own pleasures to the detriment of the children.
While the wife undoubtedly does go to the gym three times a week and, disturbingly, does leave the children on their own, it does not go nearly as far as the husband and Mr and Ms M suggest. It is troubling to note, however, that the wife admits that she does, on occasion, leave the children unattended, albeit she suggests that they have neighbours keeping an eye on them and an emergency number to ring. The eldest of these children is only 12 years’ old and it is just too young an age for unsupervised time of this sort. It gives certain credence to the husband’s criticisms.
Counsel for the husband had much to say by way of criticism of
Mr L’s report. He submitted that the report ignored the views of the children in an endeavour to shoehorn the parties into a 9/5 outcome. He submitted that the parties are well capable of co-operation and indeed have lived together and apart for one year. He submitted that the wife was looking for a life on her own and pointed to her frequent attendance at gym. He submitted the husband would provide better quality care.
Counsel also referred to an incident that took place relatively recently. It seems that following discussion between them, the husband was understood by the wife to have agreed to her moving out to another premise. She found a rental property and took the children to it. When the time for departure was fast approaching, the husband said words to the wife that if she left, he would get a Court order and have them returned. This spooked the wife who did not ultimately leave. The husband says, however, and this is telling, that when this was announced to the children, they were extremely angry. This included [X]. After several days, he relented and told the wife he would go, succumbing as he put it to peer pressure (the peers being the children). The wife by then, however, was sufficiently cautious not to be prepared to move out.
Counsel for the husband submitted that this showed that the wife could not even protect the children as she should not have told the children of the move. That criticism, in my view, misses the point. The wife plainly only took these initiatives because she had discussed the matter with the husband.
It should also be noted that the assumptions of Mr L that the parties’ alcohol use was not problematic were put in issue by Mr and Ms M. I should make it clear, as I think I already have, that these criticisms are overdone and I accept the observation of Mr L that there is no sufficient issue with alcohol to be of any major concern.
It should also be noted that the relationship between Mr and Ms M and the wife and Mr C is extremely poor. There are intervention proceedings underway between them all. The affidavits of Mr and
Ms M are replete with lurid material relating to the wife and Mr C. One must approach their evidence, honest as it was, with considerable hesitation.
Mr L was cross-examined with, as I say, considerable skill by counsel for the husband. Nonetheless, Mr L had an answer for every question put to him. I observed that counsel had not laid a glove on him and, as I made clear during the trial, that meant no more than that he had a plausible answer to every question put.
Nonetheless, Mr L’s answers make sense. The wife has clearly been the primary carer of these children through their lives. When the wife wanted to leave and the husband objected, the children were extremely angry with him. That says what they really think. They clearly wish to be with their mother. While Mr L may have a general preference for 9/5 arrangements, his uncontradicted evidence is that that is not his universal recommendation.
The husband’s evidence was that the children would, once the reality of separation sets in, miss him terribly. That was the primary basis upon which he articulated his desire for an equal time arrangement. The difficulty with such an assertion is that while it may yet prove to be true, the fact is that the children, when faced with the prospect of their mother not being able to leave and to leave with her, were it seems violently opposed. Despite relative flexibility in work hours, the husband’s proposal would also face some practical problems, necessitating assistance from his mother and the possibility of the children making their way home unaccompanied. Taken in conjunction with Mr L’s evidence about the true views of the two boys and the reservations of [Y], it is clear that the wife’s position is the preferable one.
It should be noted that in the context of the way the parties put their dispute, I have not worked through the statutory pathway as set out in Goode v Goode [2006] FamCA 1346 at [65]. Given the nature of the controversy, it is, in my opinion, inappropriate to do so.
Putting the matter in a shorthand way (and the parties did not put it in this way at all) it is clear that the presumption of equal parental responsibility applies and is not rebutted. It is clear for the reasons I have given that equal time is inappropriate. The time that I am proposing to order is substantial and significant time within the meaning of the Family Law Act 1975 (“the Act”).
Holiday time and time for special days is essentially agreed between the parties, since as I understand it as the wife adopts the proposals put for Christmas and Easter and special days set out in the husband’s amended application. The children will live with their mother for nine nights out of 14, with the children spending each Thursday to Friday with their father in one week, and in the other from Thursday till Monday. The parties will refine the draft orders I have prepared.
Property issues – the financial agreement
The financial agreement cannot be looked at in isolation. It followed the “Code or conduct marriage contract 5/3/2010.” That code of conduct itself followed the husband’s learning of the affair with
Mr C in late 2009 and the wife’s admission in early 2010. There was considerable argument as to who the author of this document was and just who got the better benefit out of it.
It is clear from the font that the first two paragraphs (which are dot points) seem slightly different to the rest. It is clear that the wife was the person who typed the draft, and it is also clear that she has more adept typing skills. No-one was entirely clear as to whether some preliminary draft in handwriting or otherwise was prepared. The document, on any view, could not have been produced without extensive discussions between the parties.
It was the husband’s case that this was an agreement very much to the benefit of the wife. I am by no means sure that that is so. Although the drafting is by no means wholly conclusive, I have no doubt that the paragraph:
“This agreement is for the sole benefit of [Ms Mardones] and is in leu (sic) of divorce proceedings which will severely disadvantage all involved; Especially the children -”
was drafted by the husband. It was the wife’s case that she sought a divorce when she was upbraided about the affair, and that makes sense. The husband did not want a divorce because he wished to keep his family together for the children. If one looks at the agreement as a whole, it is clear that if nothing else, the parties gave away claims on each other’s superannuation. The husband’s superannuation was then, and is now, substantially greater than the wife’s.
The code of conduct essentially provides for the husband to agree for the marriage to continue, notwithstanding that the wife was to continue her relationship with Mr C. Mr C was to be excised, as it were, and wholly excluded from the children and from the parties.
Notwithstanding this, the husband gave evidence that at one point he drove up the street in which Mr C lived, albeit without comment. The wife’s alleged remark “You’ve got nothing on me” is, in my view, expressive of no more than tension between them.
As I find, the code of conduct which, it should be noted, followed the extraordinary written apology earlier referred to, was essentially a creature devised by the husband. He did not want the marriage to end in divorce with the attendant difficulties for his family and financial loss. The price he both wished to pay and to exact was a written formulation of an agreement which it might be thought runs completely contrary to the notion of marriage in its traditional sense. He accepted the wife’s affair because he had little alternative if he wished to keep her with him.
It is common cause that the husband discovered that the code of conduct was not legally enforceable. The wife, presciently, never thought it was. At this point we have to move to the financial agreement itself.
It is not entirely clear when a first draft of the financial agreement was given by the husband to the wife. He was the person who had it prepared by his solicitors. It provided initially for a 40/60 split of the value of the matrimonial home to go to the wife. The recitals of this document are of some interest. Recital D records, accurately it would appear, that at the commencement of the relationship, the husband owned a property in [M] which he subsequently sold. He applied $60,000 from the sale to the reduction of the mortgage to the matrimonial home. As will be recalled, the matrimonial home was bought for a total $120,000.
The recital also records that in 1997, the husband received an inheritance in the sum of about $29,000 and applied that to the matrimonial home, together with proceeds of sale of a car in 2004 for $15,500, also applied to the matrimonial home.
Recital E records the assets of the couple including the matrimonial home at a value of $800,000, together with the husband’s superannuation in the sum of almost exactly $100,000, and the wife’s at $20,000.
Recital clause O(a) records that if the parties separated the husband would obtain 55 per cent of the matrimonial home and the wife 45 per cent. The agreement further provided that each party retain their superannuation without claim from the other.
Schedule 1 was a separation declaration dated 21 April 2011 foreshadowed by the agreement, and Schedule 2 was a certificate of independent legal advice.
That certificate, replicated in Schedule 3, showed that each solicitor purported to have advised the relevant party as to:
“...the effect of the Agreement on the rights of the parties to apply for an order under the provisions of the Property Law Act 1958 (Vic) (“the Act”) at common law and in equity.”
Schedule 4 of the agreement set out the terms of s.90K of the Family Law Act 1975 dealing with circumstances where the Court may set aside a financial agreement.
It is clear from Exhibit A2 being a letter from the wife’s solicitors dated 12 July 2010 that she had already consulted her solicitors by that time. Indeed, I think it is more probable than otherwise that by that time, the agreement had been modified to increase the wife’s percentage of the share of the matrimonial home to 45 per cent. The wife’s solicitors recorded that the wife was prepared to accept the agreement despite their advice to the contrary. Such advice was, in the circumstances of the relationship as a whole, eminently sound.
The agreement itself was not signed until September 2010.
The wife says that the husband, during the period from the realisation of her infidelity, committed numerous aggressive sexual assaults on her. The husband denies this and says to the contrary, that the wife would taunt him before going off to see her lover, with unflattering comparisons.
It is clear from material not exhibited but traversed in cross-examination that the mother’s Facebook account, from time-to-time, held disclosures as to her sexual activities which suggest a somewhat uninhibited attitude in these matters.
In the ultimate, I accept that the wife’s attitude towards her extra-marital affair was somewhat off-putting. It was clearly dismissive of the husband and uninhibited in its content.
Nonetheless, I do not accept for an instant the wife’s assertion that the husband was having sexual intercourse with her, without her consent, on a regular basis. The husband’s evidence in this regard was convincing.
This is important because it is put that these assaults were part of the reason why the wife agreed to sign the financial agreement.
What I find occurred about the agreement was this. Following the realisation of the affair in late 2009, the husband was, very understandably, absolutely outraged and extremely annoyed. He denied being annoyed and said he was only upset, but I have no doubt that he was absolutely vitriolic about it. His demeanour in the witness box was wholly consistent with such a conclusion.
Thereafter he badgered the wife relentlessly until she signed the code of conduct which in part dealt with financial matters to his advantage.
The husband’s assertion that the wife got everything she wanted by the code of conduct because she was enabled to continue her affair, in my view, misses the point. The wife could have continued the affair whatever was written down.
The financial agreement was generally to the wife’s disadvantage. On any view, its terms were, as the wife’s own solicitors clearly asserted, far less beneficent to her than was likely to be the case if the matter went to Court.
Although the wife said she endured months and months of torment in the form of physical assault and verbal abuse, I do not accept the former. What I do accept, however, having seen the witnesses in the witness box, is the latter. The wife’s evidence was that she finally signed the document just to get it over with, and I have no doubt that that is true. The husband is a man who has insisted upon a written apology because his wife failed, as he saw it, to back him up in the intra-family dispute and had inappropriate liaisons with other men. Why would one wish to have such a matter in writing?
The so-called code of conduct was itself a strange document envisaging both the continuation of the marriage and a continuing infidelity. The reality is that the terms of the code of conduct, while they admittedly allowed the wife to continue her affair, were in large part in favour of the husband in my view. He got to keep a marriage he plainly wanted to keep and he obtained, albeit it was enforceable, some measure of financial benefit.
I have no doubt that the husband nagged and bullied the wife remorselessly to seek to achieve her signature to the financial agreement which he well-knew was greatly to his advantage. As he would have it, this was the price she had to pay for her affair. This outcome speaks very heavily against the proposition the husband advances, namely that the wife wore the trousers at all times in the relationship. While she is plainly a forceful woman, and one who wants her own way, the husband was by no means devoid of resources and influence.
I find that his conduct to the wife would have been extremely unpleasant and unremitting in the period leading up to her finally signing the document in September of 2010. The delay from July when the advice had been given not to sign it and the wife apparently rejecting such advice suggests, as indeed she asserts, that she held out for a long time against unremitting pressure. In the ultimate, her will was overborne.
The effect of these findings in the context of the legislation
I accept the submission from the husband that the financial agreement was made in conformity with s.90C of the Act. It is expressed to be so, and otherwise meets the requirements of the section.
The issue, as both parties agreed, is whether or not this is a binding agreement. It should be noted that for the reasons set out by the majority in the Full Court decision of Senior v Anderson [2011] FamCAFC 129, the question is not whether it was a financial agreement but whether it was binding.
The agreement was plainly signed by all parties (s.90G(1)(a)) and the parties, before signing it, plainly had independent legal advice from a legal practitioner about the effect of the agreement on the rights of each party and about the advantages and disadvantages of making the agreement (s.90G(1)(b)). The issue is whether or not each party was provided with a signed statement by the legal practitioner stating that the advice referred to in sub-section 90G(1)(b) was provided with the signed statement required by sub-section 90G(1)(c). On the face of it, the signed statements by the legal practitioners did not meet this sub-section because the certification referred to what is plainly the Property Law Act (Vic) Part IX. This leads to the consideration of the authorities.
In my opinion, all earlier authority, to which I was referred in detail by counsel for the husband, needs to be re-considered in the light of the Full Court decision in Senior v Anderson. That decision is by no means easy to construe, at least for me if I may say so with respect. Strickland and Murphy JJ who constituted the majority did not wholly agree with each other and May J dissented.
Counsel for the husband expressly adopted the position in Senior v Anderson and stated that the certification by the solicitors was not susceptible of rectification. I am not entirely sure that that is correct. Strickland J’s judgment appears to me to suggest that rectification is available, so to speak, at common law but not under the Statute. In that case, Strickland J was of the view that an error as to the relevant section of the legislation was in fact remediable, but an error as to the identification of the parties was not. In this case, the error is not the section of the legislation but rather the particular Act concerned.
It is not necessary, in my view, to write reams of law to determine this issue. The parties well-knew that they were getting advice about a financial agreement under the Family Law Act. They were not in a
de facto relationship and the Real Property Act had no conceivable application. It is quite clear that the deficiency of the certification in referring to the Property Law Act was remediable in the sense described by Strickland J, with whom Murphy J relevantly agreed in that instance. It should be noted that May J would not have allowed the appeal in any event and that May J’s decision produces the like result.
Likewise, I do not think there is any force in the submissions of counsel for the wife that the terms of clause O(a) were incapable of operation. While poorly expressed and not in fact providing for an outcome for the particular difficulty that has emerged, namely that the parties do not agree either to sell the property or to provide an agreed valuation, the purport is clear. The husband was to get 55 per cent and the wife 45 per cent.
This finding means that the Court is not required to address the issues raised by s.90G(1A) of the Act. That provides for circumstances where, in this case, relevantly s.90G(1)(c) has not been complied with. Then the Court is required to consider whether it would be unjust and inequitable if the agreement were not binding on the spouse parties to the agreement.
I accept the view espoused in earlier authority that this relates to the efficacy of the agreement rather than an overall consideration of its justness and equitability. In circumstances where the omission (the reference to the Property Law Act) could not for an instant have misled the parties, it would plainly not be unjust and inequitable not to hold the agreement binding.
Once again, this is not the end of the matter if the wife makes alternative application under s.90K(1)(e). That gives the Court power to set aside a financial agreement if the Court is satisfied relevantly that:
“... in respect of the making of a financial agreement – a party to the agreement engaged in conduct that was, in all the circumstances, unconscionable.”
The notion of unconscionability is submitted by counsel for the husband to be a high one and counsel for the wife concedes that she bears the onus of proof. Nonetheless, in all the circumstances of this case, I think that test is satisfied.
One has to look at the conduct of the parties to this relationship as a whole. Contrary to the position he propounds, the husband was by no means wholly the put-upon party. I have no doubt that in many ways, the difficulties that entered into the relationship, perceived by him in large part to relate to unfortunate sexual issues, led to the creation of the earlier apology which was not tendered. That was a document that the wife would clearly never have wished to write (who would?) but which she did. She did so because of the husband’s overwhelming pressure to do so.
Likewise, the wife’s will was overborne because although she wanted a divorce, she was prevailed upon to write the code of conduct document. That document was not one she would have wished to write or sign. Although of course it did enable her, on its face, to continue her affair, it has about it overall a demeaning and offensive quality and I have no doubt it came, in the main part, from the husband.
Finally there is the binding financial agreement. It was plainly one against the wife’s best interests. The question is, however, whether the financial agreement was made in circumstances in which a party to the agreement engaged in conduct that was in all the circumstances unconscionable (s.90K(1)(e)).
The wife accepts that she bears the burden of proving unconscionability and I accept that this is a matter to which, by its nature, s.140 of the Evidence Act 1995 would apply.
Although I have been referred to authority on the question of what constitutes unconscionable conduct, it needs to be borne in mind that much of that authority, stemming largely from the decision in the High Court in Commercial Bank of Australia Ltd v Amadio & Anor (1983) 1514 CLR 447 arose in circumstances of common law considerations.
Here, the words of the Statute are untrammelled and simply provide that if a party has engaged in conduct which is in all the circumstances unconscionable, the Court may make an order setting aside the agreement. Plainly, the capacity to do so is discretionary and is to be exercised judicially in the light of all the relevant circumstances.
Here as I find, the husband engaged in a process of constant badgering and psychological pressure from the time it became apparent that the code of conduct document was not legally enforceable. That pressure was so great that it led the wife to eventually give in and sign it in September, some months after she had legal advice that she ought not.
While I rejected the wife’s evidence that she entered into this agreement to bring to an end the sexual assaults that were taking place upon her, nonetheless, I accept that the husband’s conduct towards her was unrelenting and, in all the circumstances, improper. He wanted this agreement signed and made her life a misery until she did.
While it is, as counsel submits, a matter for the wife to prove and it involves the crossing of a high hurdle, I am quite satisfied that the conduct of the husband in all the circumstances was unconscionable and that I should exercise my discretion to set aside the agreement.
These two matters are not conflated. The fact that unconscionable conduct has occurred, as I expressly find, does not mean that the wife is entitled to have the agreement set aside.
Nonetheless, in circumstances where the agreement was manifestly to her disadvantage, and procured as I find by unconscionable conduct, it is in my view appropriate to set it aside and I will so order.
Conventional four step analysis
The pool
The pool is the matrimonial home plus the superannuation. Although there is some disparity in the figures the parties have filed as to the value of cars, chattels and the parties’ savings, the state of the evidence leads me to the conclusion that the division of the chattels proposed by the parties is undoubtedly appropriate and the savings and debts are of no moment.
The question is what am I to do with the property and the superannuation?
Both parties agreed that if I reached this stage, the superannuation should be split 50/50 between the parties and, as I have earlier indicated, that involves an adjustment of some $29,000-odd dollars to the wife, which should be made.
Contribution
Here, there is no doubt that the husband made a significant initial contribution to the parties’ financial situation. Although the parties bought the matrimonial home for $120,000 in late 1993, the husband paid $60,000 of this by the sale of his [M] property in about 1997. He furthermore put in his inheritance and the value of his car later on. I accept his evidence that the car was a value attributable to him, and I do not accept the wife’s evidence that she contributed substantially to it. Nothing was said about this in cross-examination of either party because, at the end of the day, it was always his car.
Although the parties borrowed a further $95,000 for renovations, the husband’s contribution has obviously had a very significant impact over time to the extent that this valuable property is encumbered by a mortgage of only just over $20,000. I accept the husband’s evidence that their mortgage has increased slightly in more recent times owing to financial pressure.
While I accept further that the value of the husband’s contribution needs to be seen in the light of the march of time and might be thought to have been, to an extent, made less significant (the authorities tend to use the phrasing “eroded”), the fact is that it was important and should be given a certain value.
Absent this contribution, the parties have done their best and the wife’s contribution as a home-maker off-sets that of the husband as the primary and more significant wage-earner.
In all the circumstances, I would grant to the husband a loading of 2 ½ per cent in respect of his earlier contributions. The fact is that the parties were able to buy the matrimonial home and service the debt on it from 1993 till 1997 without the benefit of his contribution.
Section 75(2) factors
Paradoxically, it is the wife who says that the husband has more significant health difficulties and that he plays them down. I have no doubt that the husband’s health difficulties impact upon his general wellbeing and may yet impact on his employment. Nonetheless, he has secure employment in which he is well-regarded by his employer at a salary twice that of the wife.
Notwithstanding the wife’s receipt, as it would seem, of a Centrelink pension, her earnings are less than half of the husband and are likely to remain so. I roundly reject the criticisms made by counsel for the husband to the effect that the wife could easily make twice as much money by working full-time hours. True it is that she works part-time only, but with children of this age, that is scarcely a matter of great criticism. She could earn rather more by working on Fridays as well as on all the other days, but the fact is that with something akin to full-time care of the children, she needs some time at least to attend to her own affairs. That will, however, be ameliorated by the fact that on one weekend out of two, she will not be looking after the children.
In all the circumstances, I find that the wife will be able to and indeed will readily earn rather more than she now does, but not as much as the husband.
There are no issues as to the wife’s health, so far as I am aware.
The wife will have the substantive care of the three relatively young children and, in all the circumstances, there should be, in my view, a five per cent adjustment in her favour to reflect both this fact and her relatively diminished income.
Just and equitable
The parties agree that a 50/50 split of superannuation is appropriate. The difficulty is that the pool is not yet fully ascertained because the wife does not accept the husband’s sworn valuations. That is scarcely surprising in circumstances where they assert a 20 per cent reduction in the value of the property since the execution of the financial agreement in 2010.
Given that the superannuation is worth approximately $120,000 and the property is worth somewhere between $660,000 and $800,000, depending on the various estimates, there is obviously a considerable disparity. In the circumstances, what I propose to do is order a further valuation. This valuation will be effected by an estate agent chosen by agreement or by the President of the Real Estate Institute of Victoria (“REIV”).
Unattractive as it is, it is not possible, in my view, to provide final orders that do justice and equity between the parties in relation to their financial affairs until the full extent of the pool is known. The valuation to which I refer will achieve this effect.
Prima facie, the net effect of my orders is to provide 52 ½ per cent of the net pool of financial assets to the wife. That pool, however, excludes superannuation.
This matter will be listed for further hearing once the valuation is obtained, and I suspect that there may be significant cost implications depending upon the outcome of the new sworn valuation. It should be noted in this regard that it is implicit, if not indeed explicit, in the wife’s case that the husband has obtained fraudulent valuations. It remains to be seen whether this assertion is correct.
I certify that the preceding one hundred and twenty-four (124) paragraphs are a true copy of the reasons for judgment of Burchardt FM
Date: 18 April 2012
3
2
2