Nagari & Nagari
[2023] FedCFamC1F 242
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Nagari & Nagari [2023] FedCFamC1F 242
File number(s): PAC 4264 of 2021 Judgment of: RIETHMULLER J Date of judgment: 13 March 2023 Catchwords: FAMILY LAW – PROPERTY – Financial Agreements – Where the parties each signed an alleged financial agreement purporting to deal with their assets in the event of separation – Where the signed document was not “exchanged” by the parties – Declaration that there was no “financial agreement” Legislation: Family Law Act 1975 (Cth) ss 4, 44, 71A, 79, 90G, 90K
Federal Justice System Amendment (Efficiency Measures) Act (No. 1) 2009 (Cth) Sch 5
Cases cited: Allen v Carbone (1975) 132 CLR 528; [1975] HCA 14
Barrier Wharfs Ltd v W Scott Fell & Co Ltd (1908) 5 CLR 647; [1908] HCA 88
Bridle Estates Pty Ltd v Myer Realty Ltd (1977) 15 ALR 415
Commissioner of Stamp duties (Qld) v Hopkins (1945) 71 CLR 351; [1945] HCA 14
Domb v Isoz [1980] Ch 548
Eccles v Bryant and Pollock [1947] 1 Ch 93
Fevia & Carmel-Fevia (2009) FLC 93-411; [2009] FamCA 816
Franklins Pty Ltd v Metcash Trading Ltd (2009) 76 NSWLR 603; [2009] NSWCA 407
Hawker Pacific Pty Ltd v Helicopter Charter Pty Ltd (1991) 22 NSWLR 298
Millington & Millington [2007] FamCA 687
Sindel v Geogiou (1984) 154 CLR 661; [1984] HCA 58
Thorne v Kennedy (2017) 263 CLR 85; [2017] HCA 49
Wallace & Stelzer (2013) FLC 93-566; [2013] FamCAFC 199
Zaccardi v Caunt [2008] NSWCA 202
Division: Division 1 First Instance Number of paragraphs: 52 Date of hearing: 7-10 March 2023 Place: Parramatta Counsel for the Applicant: Mr Bennett Solicitor for the Applicant: Coleman Greig Lawyers Counsel for the Respondent: Mr Heazlewood Solicitor for the Respondent: Newnhams Solicitors ORDERS
PAC 4264 of 2021 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MS NAGARI
Applicant
AND: MR NAGARI
Respondent
order made by:
RIETHMULLER J
DATE OF ORDER:
13 MARCH 2023
THE COURT DECLARES THAT:
1.There is no “financial agreement” in existence between the applicant and respondent within the meaning of the Family Law Act 1975 (Cth).
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 the pseudonym Nagari & Nagari has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
EX TEMPORE REASONS FOR JUDGMENT
RIETHMULLER J:
INTRODUCTION
On 13 August 2021, the applicant wife filed an Initiating Application seeking a declaration pursuant to s 90G of the Family Law Act 1975 (Cth) that the agreement entered into between her and the respondent husband on 8 December 2005 is not binding, or alternatively, that the Agreement be set aside a pursuant to s 90K of the Act. Thereafter, the wife seeks property settlement orders against the husband pursuant to s 79 of the Act.
BACKGROUND
The husband was born in Country C in 1943 and is currently 79 years of age. The husband is a citizen of Country C, the United Kingdom, and Australia.
The wife was born in Country C in 1966 and is currently 56 years of age. The wife had dual citizenship in Country C and Australia.
In 1975, the husband married his first wife. The husband and his first wife had two children together (born in 1977 and 1978). They were divorced in 2001. No property settlement was formalised between the husband and his first wife, although an informal settlement was reached where she received $400,000 from a property pool of around $1,085,000. Whilst they had attempted to formalise this property settlement in 2002, the terms were rejected by a Registrar of the Family Court of Australia on the basis that the terms were not “just and equitable”.
However, by a seemingly miraculous coincidence, in the weeks prior to this trial, the husband’s first wife filed an application seeking leave pursuant to s 44(3) of the Act to bring property settlement proceedings that were around 20 years out of time. The husband consented to the wife pursuing property settlement proceedings pursuant to s 44(3), and as such, the bar in s 44 of the Act no longer operated. The husband and his first wife then promptly settled the proceedings between them on the basis that he would pay her $1,200,000 within 60 days. Consent orders between the husband and his first wife were made after the wife in the present proceedings was afforded an opportunity to make submissions, although no submissions were made against the terms of the consent orders.
The wife had also been married previously, and she and her first husband had two children (born 1986 and 1987). In early 2002, the wife’s children moved to Australia to finish their schooling where she occasionally visited them (holding a multi-entry visa to Australia), but she otherwise remained living in Country C. The wife’s first husband passed away in 2002. Thus by 2003, both the husband and wife were no longer married to their former spouses, and each engaged the services of a matchmaker to find a new spouse.
In 2005, the wife travelled to Australia with her parents to visit her adult children. In around mid-2005, the wife’s family informed the wife that the husband had proposed to marry her, and they met for the first time in late 2005. Shortly after, the parties set a date to be married in late 2005, and the wife’s move to Australia became effectively permanent.
In late 2005, a short time before their wedding, the wife says that the husband informed her that he had organised an appointment for her to sign a document. On the wife’s case, the following day, the parties met with Ms B, a solicitor (the wife’s advising solicitor). At that meeting, the wife signed a copy of the financial agreement the subject of the application.
A short time later the parties were married. The parties but did not have any children together. The parties separated in July 2018 and a divorce order was made in late 2020.
I note that neither of the solicitors on the record were the solicitors that either drafted the agreement or attempted to effect the transaction, nor completed any of the legal advice annexures.
THE HUSBAND AND WIFE’S AGREEMENT
The parties each executed a copy of a document dated 8 December 2005 which the husband relies upon as a financial agreement within the meaning of s 71A of the Act (thereby excluding the operation of s 79 of the Act). The agreement is in the following terms (with the hand written additions underlined and in square brackets, and the deleted parts inserted with strikethrough text):
RECITALS
A.[Mr Nagari] was married and divorced and has two children by that marriage.
B.The details of [Mr Nagari’s] two children are as follows:
•[Ms D] (daughter) of [F Street] [Suburb G]
•[Mr E] (Son) of [H Street] [Suburb J].
C.[Mr Nagari] is the registered proprietor of real property situated at [Suburb K] and [Suburb L] in New South Wales. Australia and in [Country C] (the ‘properties’).
D.[Mr Nagari] also owns Shares and has superannuation.
E.[Ms Nagari] was married and
divorced[widowed] and has two children by that marriage.F.The details of [Ms Nagari’s] two children are as follows:
•[Mr M] (son) of [O Street] [Suburb P]
•[Ms N] (daughter) of [O Street] [Suburb P]
G.The parties intend to marry. They wish to enter into a Financial Agreement to preclude claims of any nature relating to financial matters that either has or may have against the other pursuant to the Property (Relationships) Act 1984 (NSW). the Family Law Act (1975) (Cth) and/or otherwise at law or equity in the event that:
•the relationship ends.
•the marriage irretrievably breaks down and terminates: or
•one of the parties dies.
And for that purpose the parties agree that this Agreement is a financial agreement pursuant to Section 90B of the Family Law Amendment Bill 1999 and a Domestic Relationship Agreement and /or Termination Agreement pursuant to Part 4 of the Property Relationship Act 1984 (NSW) and that it relates to all financial matters between them including but not limited to a division of their property and their maintenance.
H. The Parties agree that in the event that their relationship or marriage ends:
•[Mr Nagari] shall retain the assets and resources referred to in this agreement.
•[Ms Nagari] shall retain the assets she has acquired prior to the marriage with [Mr Nagari].
NOW THIS DEED WITNESSES:
1. Both parties agree that with respect to the assets of the other:
a.Each of the parties hereby releases and forever quits claim tot eh estate of the other party including any nominal estates, against all rights,
is[if] any, by or on behalf of the party to make any application or claim under or pursuant to the Family Provision Act 1982 (NSW).b.The husband and the wife each gives that release in consideration of the terms of the Financial Agreement between the parties.
c.The husband and the wife each acknowledge that the terms of this Agreement have taken into account the position of the other in the event of the death of the other.
d. The husband and the wife each acknowledge that for the purpose of Section 31 of the Family Provision Act 1982 the release is fair and reasonable.
e. At any time hereafter either the husband or the wife or his or her legal personal representative may request the other party or his or legal personal representative to join in at the costs of the one requesting an application to the Supreme Court of New South Wales for the approval of this Agreement to relinquish all claims under the Family Law Provisions Act 1982 pursuant to Section 31 of that Act. If such request is made, the other covenants to comply with such request and to do all Acts and things reasonably necessary to obtain the approval of the Supreme Court at the cost of the one requesting.
f.Both the husband and the wife acknowledge that they have received independent legal advice prior to the entering into of this agreement for the release and that each has given due consideration to that advice.
Neither party produced an original of the document, nor even a good quality photocopy. It appears that the only copy came from the husband. Importantly, the parties did not sign the same document, each signing a separate copy or counterpart, although the corrections appear in both copies and were initialled by the respective parties on their copies.
The wife’s claims
The wife alleges that the husband arranged for her to attend an appointment to sign the document and that the husband was present for the appointment (but for “a few minutes when [the husband] left to use the washroom”: see the wife’s affidavit filed 18 January 2023, paragraphs 35 and 41). The husband says that although the parties travelled together to the wife’s advising solicitor’s office, the solicitor asked him to leave to enable her to speak to the wife alone, and that he went to his car and waited for the wife to return (some 15 to 30 minutes later). The wife also says the husband represented to her that the document was “unimportant”, and was “merely procedural for the purposes of the intended marriage”, and he did not inform her that it was a financial agreement: see the wife’s affidavit, paragraphs 35, 37 and 52.
The wife alleged that she was unable to speak English at the time and unable to read and understand the document. The wife annexed to her affidavit results from a City S university some years earlier than the relevant dispute, showing an “E” for English. However the results also showed only a “C” for Country C Language, her first language. There was also evidence that she had taught young children English.
The wife was cross-examined in detail as to the course of events in her advising solicitor’s office, including the date she attended upon the solicitor. Significantly, she first recounted that the husband told her only to read those parts of the document that referred to her by name, and then he went to the toilet. The wife said that she noticed she was described as being divorced when she was in fact widowed. She said that she did not read past this point in the document. On the husband’s return, the wife said that she told him of this error and he handwrote the correction to that clause. She said she then signed the document and that they then left the solicitor’s office. Later in her cross-examination, after her attention was drawn to the second correction in the document, which she had also initialled. The wife then said that the husband went on to make the second correction and had her initial that correction.
The wife was also quite dogmatic in her view that the attendance upon her advising solicitor was on 8 December 2005, saying that was the first day she had attended at the offices of the husband in the city. However, this was disputed by the husband and does not sit easily with the documents themselves. The agreement has a typewritten date of “8 December” on its face. This was identical on both the copy the husband signed and the copy with the wife’s signature. The certificate of advice by the husband’s advising solicitor was dated 8 December 2005. The certificate of advice by the wife’s advising solicitor was dated 12 December 2005. If the parties attended upon the solicitors on one day, it seems remarkable that they would not have signed the same document, and that the wife’s advising solicitor would not have dated the certificate the day that she gave the wife advice.
The wife’s presentation in the witness box was at other times not terribly responsive to questions. She relied upon the interpreter heavily, but at times quickly responded in English without the need for an interpretation. I did not find the wife an impressive witness in the witness box, even making considerable allowances for her giving evidence in large part through an interpreter.
The husband’s evidence
The husband is an elderly man. Whilst he has had a medical condition, he presents quite normally, although he pointed out that the medical condition has impacted his short term memory somewhat. Whilst his speech was a little slower than the average person, it did not appear outside of the norm for a man of his age. He was calm and generally responsive in the witness box. The only issue that impacts upon his credibility concerns a City S property. It appears that he leased the property to lessees for approximately 120 years in around 1985. He said that he had since sold the lease, as it was returning only a very small amount of money per year. However, the City S property was dealt with in a will that the wife found among the husband’s belongings. Exactly what occurred with respect to this City S property is far from clear, and the wife did not have a full search of the relevant title register (only an extract that was not sufficient to enable any clear inference to be drawn). I am not persuaded that on the evidence before me at present that this matter is significant to the husband’s credit generally. I found him an impressive witness and generally accept his evidence.
The husband called two witnesses, both of whom had employed the wife years after her coming to Australia. Their evidence as to the wife’s English-language skills was starkly different to the wife’s presentation in Court. The first witness, Ms Q, had engaged the wife to work with her in a business in order to do the administration work, such as answer the telephones. Whilst Ms Q was cross-examined as to whether her memory may have changed over the years as the wife’s language improved, she was adamant that the wife’s English was excellent when she first met her. She described the wife’s English as excellent, and that the wife personal presentation was also excellent which led her to hire the wife.
The second witness called by the husband, Ms Q’s father, also engaged the wife in undertaking work for an organisation that he runs. His description of the wife was in glowing terms as to her capacity to speak English and undertake administrative tasks within the organisation. Notably, when asked if her English had improved, he pointed out that there was no need for her to improve as she spoke English very well from the outset. I found both witnesses impressive and credible.
Given the nature of the work that the wife was undertaking for each Ms Q and Mr R from early days, albeit sometime after the relevant attendance upon her advising solicitor in December 2005, I am not persuaded that I should discount their evidence on the basis that the wife’s language skills may have improved over the time they knew her. Indeed, the wife’s language skills as presented in the witness box would still not have been nearly sufficient to undertake the tasks that she performed when working with each of the two witnesses. I am comfortably satisfied that the wife did have good English language skills, sufficient to gain employment in an administrative role, including answering telephone queries, taking messages and drafting letters, and that her presentation in court as a person unable to speak English (or largely unable to speak English) was not a realistic representation of her skills.
I am persuaded that she was able to understand English well enough to interact with the solicitor when she attended upon her advising solicitor for advice, and similarly would have been able to read the document. This, taken with the wife’s varying evidence as to course of events during the actual meeting with her advising solicitor, and her evidence concerning the dates, added to my impression of the wife as a less-than-reliable witness (from her evidence in the witness box), leads me to reject her evidence where it differs from that of the husband.
I therefore accept that the husband took the wife to her advising solicitor’s office and left when asked. I accept that he had no role in altering the document in the solicitor’s office when the wife signed. I accept that he waited in the car for 15 to 30 minutes and that the wife returned and told him that she had signed the document after the advising solicitor had explained and clarified the contents of it with her.
However, these findings do not fully resolve the questions of how the documents came to be altered, signed, and where, if anywhere, they were delivered. On the face of the documents, there is some similarity in the hand writing of the written corrections where the word “widowed” is written upon the document. It does not appear to be in the handwriting of either of the parties, at least to the extent that the word is written in a style quite differently to each of their signatures. There are two possibilities: first, it may be that the husband and his former solicitor identified these errors, the husband’s former solicitor handwrote the corrections and the husband thereafter signed the document. The former solicitor then made the handwritten corrections on the second copy which was forwarded to the wife’s advising solicitor. The second alternative seems to be that the wife’s advising solicitor made the corrections following which the wife signed the document and that it was then returned to the husband’s former solicitor who made corrections on the face of the document signed by the husband, and the husband attended again to sign (or at least initial) those changes. The latter, however, being inconsistent with the husband’s evidence.
On balance it appears more likely to me that the changes were made when the errors were identified by the husband to his former solicitor, as he sets out in his evidence, and that the solicitor made the changes to both copies of the document, forwarding the version for signature by the wife with the handwritten amendments on its face.
There is no dispute that there is not a copy of the agreement that has the signatures of both the husband and wife on the one copy. There is no evidence as to what became of the original documents, nor is there evidence from either party to suggest that the wife left her advising solicitor’s office with a copy of any documents. Presumably, the wife’s advising solicitor forwarded the document to the husband’s former solicitor. However, what became of either copy thereafter is unclear. What is known is that the husband ultimately received a copy of both documents which he retained in his records.
The wife, some years later (in 2010), found in the husband’s papers in the home a copy of his last will and testament and photocopies of the agreement as signed by her and of the agreement as signed by him. It is not suggested that the husband was aware that she had discovered these copies nor that he had given the documents to her at that time.
Was there a concluded agreement?
Ordinarily, financial agreements drawn in accordance with the provisions of the Family Law Act 1975 (Cth) are signed by both parties on the face of the one document. This was not the process adopted in this case. Rather, it appears that the husband’s former solicitors adopted the process of exchanging contracts commonly used in conveyancing in New South Wales. The question then arises as to when a concluded agreement is reached if the contracts are being exchanged rather than the parties both signing the one document.
In Eccles v Bryant and Pollock [1947] 1 Ch 93 (cited with approval by the High Court in Allen v Carbone (1975) 132 CLR 528 at 533; Bridle Estates Pty Ltd v Myer Realty Ltd (1977) 15 ALR 415 at 422 and Sindel v Geogiou (1984) 154 CLR 661, and applied in Zaccardi v Caunt [2008] NSWCA 202), Lord Greene MR noted that traditionally the exchange would take place at a meeting of the respective solicitors for that purpose, but at least by 1947 the process was taking place by way of posting the documents to the other party in some cases. Lord Greene concluded at 97–98 that:
The earliest date which a contract can come into existence … would be the date when the latter of the two documents to be put in the post is actually put in the post.
His Lordship noted that it may be that the agreement did not actually come into effect until the opposite parties had received their respective copies, however did not need to determine that question (at 97–98). At 99, his Lordship pointed out that the “exchange” of the documents “is the crucial and vital fact which brings the contract into existence”. The reason for this is that it was important that the vendors have a document signed by the purchaser and that the purchaser have a document signed by the vendor, an essential, practical requirement in the days before modern copying machines and where title to land was proved through production of the contracts and transfer documents. With the advent of modern communications, the English courts have held that exchange is possible by a telephone conversation between solicitors on the basis that each holds the respective copy as an agent for the other party: see Domb v Isoz [1980] Ch 548.
In the present case, there is no evidence of any exchange by way of delivery of the copy signed by the husband to the wife, nor of the copy signed by the wife to the husband. At best, it can be inferred that the wife’s advising solicitor forwarded the wife’s copy to the husband’s solicitor as the husband said he received a copy from his solicitors after the wife signed (and he ended up with copies of both counterparts in his possession). However, there is no evidence from which to conclude that the husband’s signed counterpart was provided to the wife. The copy he received from his solicitors did not come with, for example, a copy of the letter sending his part to the wife.
This level of formality is particularly important in a case such as the present, given the purpose of s 90G of the Act as a protective provision due to the significant effect of s 71A. As the High Court said in Barrier Wharfs Ltd v W Scott Fell & Co Ltd (1908) 5 CLR 647 at 666:
It is one thing for two parties to settle what are the terms of an agreement if it should be made, and quite another thing to make the agreement.
Notably, s 90G(1)(a) of the Act requires that “the agreement is signed by all parties”. Where the agreement is reached by counterparts being exchanged, if such a mechanism is within s 90G(1)(a), it must necessarily be strictly followed. Also, the version of s 90G(1)(c) of the Act that applied to this agreement (as discussed below) required that the agreement contain an annexure setting out that the relevant legal advice was given, which could only be effected if there was a formal provision of the husband’s counterpart (and annexure) to the wife, otherwise the wife would not have a copy with the counterpart containing the annexure relating to the husband: that is, she did not have a full copy of the written document, as she did not have a copy of the annexure as to his advice. Further, it must be recognised that this agreement operates in somewhat of a hiatus of the protections intended by s 90G of the Act generally, as s 90G(1)(e) of the Act had been repealed retrospectively, and the changes to s 90G(1)(c) and s 90G(1)(ca) had not been made retrospective.
The husband said he asked the wife upon her return to Australia in 2006 if she wanted a copy of the agreement and said she declined, saying they would not separate, or “break up the marriage”: see the husband’s affidavit filed 1 February 2023, paragraph 46. The husband did not give her the copy he signed, nor does it appear that she was offered the original of the counterpart with his signature, nor the annexure relating to the legal advice given to the husband. Considerable time had passed and in the interim they had married. This does not appear to me to be sufficient to effect an exchange, even given the more liberal approach in Domb v Isoz, as there was no agreement to depart from the usual formalities for effecting a contract by the exchange of counterparts (which as I set out above, should be taken to strictly apply given the terms of s 90G and s 71A of the Act). Even if this level of formality is not required, so long had passed (during which the significant event of marriage taken place) that it must be questioned whether it remained open to the husband to perfect the agreement at that time.
That the wife may have later found a copy among the husband’s belongings is not the equivalent of the husband making a positive decision to send his counterpart to the wife and by that act effect the agreement. That is, it is the husband’s positive choice to send his counterpart to the wife that would effecting the agreement, not the mere fact that she came into possession of a copy in circumstance of which he was unaware.
I therefore find that the husband has not established that a completed agreement was reached as there is no evidence that the counterpart he actually signed was delivered to the wife (or her agent), and therefore there had been no exchange of the counterparts.
If there were an agreement, would it comply with s 90G?
If the husband had established the exchange of counterparts, such as to show that an agreement had been concluded, the question that would then arise is whether it would comply with the requirements of s 90G of the Act.
This question is difficult as it would not have complied with s 90G(1)(e) of the Act, which was a subsection in force at the relevant time: see Millington & Millington [2007] FamCA 687 at [33] and Fevia & Carmel-Fevia (2009) FLC 93-411 at [215]. However, s 90G(1)(e) was repealed by the Federal Justice System Amendment (Efficiency Measures) Act (No. 1) 2009 (Cth) (see Sch 5, Pt 1, Item 7), which operated retrospectively (see Sch 5, Pt 1, Item 8(1) and Wallace & Stelzer (2013) FLC 93-566). Whilst s 90G(1)(c) and s 90G(1)(ca) of the Act now provide for each spouse to receive a copy of the legal advice certificate with respect to the other spouse, that part of the amendments was not retrospective (see Sch 5, Pt 1, Item 8(6)). The result is that the failure of the husband’s former solicitors to provide the wife with a complete copy of the agreement or a copy of the legal advice certificate with respect to the husband does not appear to have been a breach of s 90G of the Act itself due to the curious way that the amendments were enacted.
There is no argument that the certificates issued by the husband’s advising solicitors and the wife’s advising solicitors are inadequate on their face. However, counsel for the wife raised three arguments concerning compliance with s 90G of the Act. The first argument was that the wife did not speak English and therefore could not have received advice. In light of my findings concerning the wife’s language skills, this argument must fail. Secondly, that the husband had failed to make full disclosure of all of his assets in the agreement. However, the agreement does not represent that he has made full disclosure, merely recording the property he is to retain. Importantly, unlike an agreement after the parties have separated (when a duty of full and frank disclosure would have arisen as a result of the operation of s 79 of the Act), counsel was unable to point to any duty upon the husband to make full and frank disclosure at the time of entering into this agreement. Thirdly, it was argued that as the wife’s advising solicitor only had 15 to 30 minutes to give the wife advice, the solicitor could not have given the advice required within the timeframe. However, it seems clear that the advice was obvious, namely that it was not in the wife’s financial interests to sign the agreement as it potentially prevented her from obtaining a property settlement in the event their relationship broke down, or property after the husband’s death (had they remained in a relationship). I am not persuaded that the short time for the giving of advice was such as to demonstrate that advice was not given, rather than indicating that the advice may have been brief or cursory. As it appears that advice was given, this is not a defect with respect to s 90G of the Act.
If there were an agreement is there an effective or operative provision?
Counsel for the wife argued that there was no operative term within the body of the agreement that took effect as a financial agreement for the purpose of the Family Law Act 1975 (Cth). This argument was based upon the fact that the operative clause with respect to the Family Law Act issues does not appear in the body of the agreement but has one of the recitals, recital “H” (see above). Counsel relied upon Franklins Pty Ltd v Metcash Trading Ltd (2009) 76 NSWLR 603 at [380] where the Court summarised the various uses that may be made of recitals in a deed.
The present case, however, is not a situation where the recitals are relied upon in order to change the interpretation of clauses in the operative part of the agreement. Rather, the relevant recital appears to have been wrongly placed in the recitals section rather than in the body of the deed.
As Rich J said in Commissioner of Stamp duties (Qld) v Hopkins (1945) 71 CLR 351:
If a recital in a deed appears to be intended to operate as a covenant by one of the parties, recital is just as effective a covenant as if a covenant to the effect of the recital appeared in the operative part: Hollis v Carr; Farrell v Hilditch; McKenzie v Childers.
(Footnotes omitted)
In this case it is apparent on the face of the document that recital “H” was intended to be an operative clause, and that it does not impact upon or alter in any way the clauses in the balance of the deed. As a result, I am persuaded that the document in question (if it were an effective agreement between the parties) contains an operative provision relevant to the Family Law Act 1975 (Cth).
Counsel also argued that it was impractical to carry out the terms of the clause contained in recital “H” as it does not deal with the entirety of the assets of the parties. Rather, it provides for the husband to retain the assets described in the document, and the wife to retain their assets at the time of signing. The document makes no provision for any assets acquired after the date of the marriage. This does not appear to be an insuperable difficulty as common law and equity provide well established rules for determining the interests of the parties in any assets outside the terms of an agreement, if it were that the existence of the agreement were to place all of the parties’ assets beyond the ambit of s 79, as a result of s 71A of the Act (when read with the definition of “financial matters” in s 4 of the Act). Whether s 79 of the Act is engaged with respect to property that is not specifically dealt with in a financial agreement is not a question that I must determine at this point in the current proceedings.
As a result, I am persuaded that the document, if it formed an effective agreement for s 71A of the Act, contained operative provisions, albeit that they are set out in the “Recitals” section of the document, rather than in the more usual location in the body of the document. Whilst the terms are brief, they are understandable and sufficient to be effective. I therefore reject the argument that the document contains no effective or operative provision.
Would the alleged agreement have been set aside pursuant to s 90K?
The wife’s counsel also argued that the agreement should be set aside or declared void, relying upon arguments pursuant to ss 90K(1)(a), 90K(1)(b), and 90K(1)(e) of the Act. Counsel for the wife alleged that the alleged agreement was obtained by fraud within the meaning of s 90K(1)(a) of the Act as a result of the husband not making full disclosure of his assets. It was clear that the husband had far more property than the wife at the time, and that the terms of the agreement were that each would simply retain the property they owned at the time of the alleged agreement. That the husband may have also been the grantor of a 120 or 125 year lease of a property in City S (which would not end in his lifetime. Where there was no representation that the document listed all of his assets, nor any evidence of reliance by the wife upon some differential in their assets, it does not appear to me to amount to a common law fraud, nor what might be described as an equitable fraud. Most importantly, I am not persuaded that the circumstances amount to a fraud in the relevant sense that the term is used in the subsection.
Counsel argued that I should infer that the wife felt obliged to sign the document (putting a case reminiscent to that pursued in Thorne v Kennedy (2017) 263 CLR 85). However, the wife’s evidence was that she had no knowledge of the contents of the document, nor did she give evidence that she was pressured or felt pressured to sign the document. Counsel argued that there was no reason for her to enter into the agreement and marriage on these terms. However, this was an arranged marriage of two people who had already raised their children. It is not uncommon for people at this stage of life to desire to protect the assets they have accumulated. It is not a case where the wife was simply coming to Australia for the marriage – she chose to accept this arranged marriage proposal (rather than proposals from elsewhere in the diaspora of her community), in part, because her children lived here.
Counsel sought to draw support from Hawker Pacific Pty Ltd v Helicopter Charter Pty Ltd (1991) 22 NSWLR 298, arguing that the case was authority for the proposition that the Court could infer or imply a threat or pressure. The case is authority for the proposition that (at 303):
If circumstances for which the appellant was responsible conveyed the threat to the respondent, then the threat of duress would operate as forcefully as if it were put into words.
That is, a threat or pressure can be implied form the conduct of the other party, even if there is no express verbal threat. That is not the situation in this case. Here there is no evidence that I have accepted of a threat or pressure by the husband (either expressly, or to be implied from his conduct) of which the wife has said impacted upon her.
Finally, counsel argued that the husband had told the wife that the document was “nothing important” or was “just procedural”. For the reasons set out above I have rejected the wife’s version in favour of that of the husband, and found that the wife had sufficient English language skills to understand the document and any advice given to her. In these circumstances there is no factual basis for this argument.
I therefore reject the arguments that any agreement would be set aside pursuant to s 90K of the Act, or upon common law or equitable principles.
CONCLUSION
In this case Counsel for the husband has managed to overcome a great many difficulties that confronted the husband’s case as a result of these poorly drawn and strangely executed documents. However, for the reasons set out above, I am not persuaded that a formal agreement was actually reached between the parties, and therefore there is no financial agreement within the meaning of s 71A of the Act, and thus the operation of Part VIII (including s 79) of the Act applies to the parties.
I therefore make a declaration that there is no “financial agreement” in existence between the applicant and the respondent within the meaning of the Family Law Act 1975 (Cth).
I certify that the preceding fifty-two (52) numbered paragraphs are a true copy of the ex tempore Reasons for Judgment of the Honourable Justice Riethmuller. Associate:
Dated: 4 April 2023
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