PARKES & PARKES

[2014] FCCA 102

FEDERAL CIRCUIT COURT OF AUSTRALIA

PARKES & PARKES [2014] FCCA 102

Catchwords:
FAMILY LAW  ̶  Whether children’s relationship with husband promoted by increasing time  ̶  relevance of three-year-old child’s anxiety as a result of witnessing incidents between parties  ̶  whether binding financial agreement should be set aside  ̶  whether husband’s conduct in producing binding financial agreement three days before wedding unconscionable  ̶  whether husband’s conduct in saying three days before wedding if binding financial agreement not signed by wife wedding was off was duress or undue influence.

Legislation:  

Family Law Act 1975 (Cth), ss.60CA, 60CC, 65DAA, 90B, 90K

Pascot and Pascot [2011] Fam CA 945
Louth v Diprose [1992] HCA 61

Applicant: MR PARKES

Respondent: MS PARKES

File Number: DGC 148 of 2013

Judgment of: Judge Phipps

Hearing dates: 20 & 21 November 2013

Date of Last Submission: 21 November 2013

Delivered at: Dandenong

Delivered on: 24 January 2014

REPRESENTATION

The Applicant: Appearing in person

Counsel for the Respondent: Mr Marchetti

Solicitors for the Respondent: Berry Family Law

ORDERS

Children

1. That all previous orders are discharged as from 3 February 2014.

2. That the husband and the wife have equal shared parental responsibility for the children [X] born [in] 2009 and [Y] born [in] 2011.

3. That the children live with the wife.

4. That commencing 4 February 2014 the children spend time and communicate with the husband as follows:

   (a)Each Tuesday from 10.00am to 4.00pm commencing 4 February 2014;

   (b)Each alternate weekend from 12noon Saturday until 5.00pm Sunday commencing 15 February 2014;

   (c)Each alternate Friday from 10.00am to 4.00pm commencing 7 February 2014;

   (d)For two hours as agreed on each of the children’s birthdays;

   (e)From 10.00am to 4.00pm on Father’s Day if it is not a spend time day;

   (f)For 6 hours on Christmas Day as agreed and if not agreed from 10.00am to 4.00pm;

   (g)By telephone at reasonable times by agreement.

5. That if Mother’s Day is a spend time day the children’s time with the father is suspended from 10.00am.

6. That for the purpose of changeover the mother shall deliver the children at the commencement of the father’s time at the [omitted] Playhouse in [suburb omitted] and the father shall deliver the children at the conclusion of his time to the [omitted] Play Centre at [suburb omitted].

7. That unless otherwise agreed no later than 31 October 2014 each party contact Dispute Mediation Services Australia in [omitted] to make arrangements for their attendance to discuss future parenting arrangements for the children.

Property

1. That the binding financial agreement between the husband and the wife dated 13 November 2008 is set aside.

2. That the parties attend a conciliation conference with a registrar of the court on 4 April 2014 at 2.15pm.

3. That the matter be adjourned for mention on 4 April 2014 at 10.00am in the Federal Circuit Court of Australia at Dandenong stood down until completion of the conciliation conference listed this day.

4. That unless by 28 February 2014 the parties have confirmed in writing an agreement as to the current market value of Property N, Property H and the business [C], [address omitted] then each party forthwith do all acts and things necessary to obtain a sworn valuation by an appropriately qualified person, such valuation to be filed with the court not later than 28 March 2014.

IT IS NOTED that publication of this judgment under the pseudonym Parkes & Parkes is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).

FEDERAL CIRCUIT COURT
OF AUSTRALIA

AT DANDENONG

DGC 148 of 2013

MR PARKES

Applicant

And

MS PARKES

Respondent

REASONS FOR JUDGMENT

Children

1. The husband and wife in this application do not agree on the amount of time their children [X] born [in] 2009 and [Y] born [in] 2011 should spend with the husband.  Prior to their marriage the parties entered into a binding financial agreement dated 13 November 2008.  The wife applies to set aside that agreement.

2. The husband’s proposal for parenting orders is that the husband and the wife have equal shared parental responsibility for the children and that the children live with the wife.

3. The husband’s proposal for the children spending time and communicating with him is:

   a)From 20 November 2013 until 2 February 2014:

   i)Each Monday, Thursday and Saturday from 9.00am to 5.30pm;

   ii)On a night agreeable to the mother on one of the allocated days in December the extension of the time to 10.00 or 10.30pm to enable the husband to take the children to see the Christmas lights.

   iii)From 10.00am to 4.00pm Christmas Day 2013.

   b)From 3 February 2014 until 28 June 2014, commencing 9.00am Monday until 5.00pm Tuesday and on Saturday from 9.00am to 5.30pm;

   c)During the school holiday period which falls between 3 February and 28 June 2014:

   i)From Monday 9.00am until Tuesday 5.30pm on Saturday 9.00am to 5.30pm;

   ii)each alternate week Monday 9.00am until Tuesday 5.30pm on Friday 9.00am to Saturday 5.30 pm;

   d)From 29 June 2014 until [X] commences school and [Y] commences three-year-old kindergarten about February 2015 from Sunday 10.00am to Tuesday 6.00pm each week;

   e)At the commencement of school and kindergarten in 2015;

   i)Every Tuesday for [X] from after school until before school Wednesday and with [Y] from 8.30am Tuesday to after school Wednesday;

   ii)Friday 3.30pm to 6.00pm Saturday;

   iii)Half school holidays;

   f)Unless agreed the parties attend Dispute Mediation Services Australia in [omitted] to reach agreement about parenting matters one month prior to school and kindergarten commencing in 2016.

4. The wife’s proposal for parenting orders is that the husband and the wife have equal shared parental responsibility for the children and that the children live with the wife.

5. The wife’s proposal for the children to spend time with the husband is:

   a)From 20 November 2013 until 20 December 2013;

   i)Each Monday and Friday from 10.00am to 4.00pm;

   ii)Each Wednesday from 1.00pm until 3.00pm.

   b)From 21 December 2013 until 2 February 2014;

   i)Each Monday and Thursday from 10.00 to 4.00;

   ii)Each alternate Saturday from 10.00am to 4.00pm.

   c)From 4 February 2014 until 31 July 2014;

   i)Each Tuesday from 10.00am to 4.00pm;

   ii)Each alternate weekend from 12noon Saturday until 12noon Sunday.

   d)From 1 August 2014 to 28 January 2014;

   i)Each Tuesday from 10.00am until 4.00pm;

   ii)Each alternate weekend from 9.00am Saturday until 5.00pm Sunday.

   e)At Christmas in 2013 from 10.00am until 4.00pm that day;

   f)For the purpose of changeover the mother shall deliver the children at the commencement of the father’s time at the [omitted] Playhouse in [omitted] and the father shall deliver the children at the conclusion of his time to the [omitted] Play Centre at [omitted].

6. Christmas 2013 and changeover arrangements are agreed.

7. The issue concerning the children is how much time the children should spend with the husband.

8. The husband was born [in] 1979 and the wife [in] 1976.  They commenced dating in September 2002 and until their marriage spent time at each other’s houses.  They lived with their parents.  There is some dispute about the amount of time this was but it is not significant.

9. The parties became engaged to marry in [omitted] 2007 and married on [date omitted] 2008. The child [X] was born on [date omitted] 2009 the child [Y] on [date omitted] 2011. The parties separated on 24 April 2012.

10. The parties lived for about a year with the husband’s parents and purchased and moved into their matrimonial home at Property H in the middle of 2010.  They separated on 24 April 2012.

11. The husband commenced his own [omitted] business in [suburb omitted] in 2008.  The business [omitted] trading as [C].  Prior to that he worked for [omitted].

12. Prior to the purchase of the matrimonial home one source of friction between the parties was where they would live.  The husband wished to live near his parents’ home and his business, both in [suburb omitted], and the wife wished to live near her parents in [suburb omitted].

13. Each party gives a very different description of their family life.  The husband describes the wife as being very controlling and not allowing him to take the children to see his parents.  He says this manifested in aggressive behaviour and abuse.  He says that prior to the separation the wife spent continuing amounts of time with the children at her parents’ home.  The wife describes the husband as abusive and criticises him for not helping with the children.

14. Two incidents and the parties different descriptions of what occurred demonstrate the problems between them.  The parties separated on 24 April 2012.  The wife says that that morning the husband and she had an argument.  She decided to take the children to her parents’ house to avoid the children hearing what she describes as the husband yelling and screaming.  She says that when she went to leave the husband chased after her to try to stop her and as he approached he pushed her down the stairs in front of the children.  She says she called the police but did not want charges laid.

15. The husband says that a little over a week before separation the wife took the children and stayed at her parents’ house.  He tried to ring to ask what was happening.  He says she was hostile and abrasive and did not want to talk.  He says that the wife returned home with the children on Sunday morning 22 April 2002.

16. He says that on the morning of 24 April 2012 he was not feeling well and after spending time with [X] downstairs went to the family bedroom upstairs.  He said about half an hour later the wife came into the bedroom with [X] and he told her to go back downstairs with [X] as he didn’t want to argue in front of her.  He says she started admonishing him as to why he was not communicating with her and that she was going to take the children and return to her parents immediately.

17. The husband says that he did not want to argue and intended going to work in the wife’s car instead of his car as he did not want the wife to leave with the children again having only just returned.  He denies he was yelling or threatening.  He says as he went down the stairs the wife attempted to push past him and fell.

18. The parties attended dispute mediation on 21 May 2012 and entered into a parenting plan which provided for the children to live with the wife and spend time with the husband each Thursday and Saturday from 10.00am to 4.00pm and on Monday the wife was to deliver the children at 10.00am to the husband’s home, collect [Y] at 4.00pm whilst [X] would spend the night in the husband’s care.

19. The second incident was on 7 February 2013.  When the wife arrived at the father’s home she said that [X] needed to go to the bathroom.  She took the children into the house and took [X] to the bathroom.  She asked the husband to change [Y]’s nappy.  She says the husband became hostile and started yelling and screaming at her and saying get out of my house.  The husband’s version is that the wife was abusive in asking him to change [Y]’s nappy and he told her to leave.

20. The parties expended much effort in their affidavits and at the hearing in the rights and wrongs of these incidents and other incidents.  What is important is the effect on the children, particularly [X].  The wife says that [X] become upset and reluctant to spend time with the husband.

21. After the incident on 7 February 2013 the wife suspended the children’s time with the father under the parenting plan.  The husband had commenced this proceeding on 28 January 2013.  The first court date was on 6 March 2013 and on that day I ordered that the children spend time with the husband from 10.00am until 5.00pm. on Monday and Friday in each week and by telephone at reasonable times.  The order provided for a family report.  On 27 June 2013 I ordered that the matter be fixed for final hearing on 20 November 2013 with respect to parenting issues and the question of whether the prenuptial agreement dated 13 November 2008 should be set aside.  The order altered changeover arrangements.

22. Ms S prepared the family report.  Both parents gave their version of the history of the relationship and events after separation to Ms S.  Ms S says that the anxiety of [X], described by the wife, is due to the lead up to transition and a result of her seeing her parents in the same space which in [X]’s mind resulted in an explosive and extreme negative interaction.  The husband showed Ms S video recordings of past images of his interaction.  The wife has recordings on her iPhone of recent bath time interaction where [X] pleads with her mother not to take her to see her father.

23. Ms S says that for [X] at three years of age this response is distressing for both parents to hear.  She says that [X]’s anxiety about the conflict is age-appropriate.  Children of this age are worried about their parents.  They are often confused about the adult interaction and exposure to conflict.  Loud yelling can seriously disrupt important aspects of children’s development.  Ms S says that [X]’s wish to go to the bathroom and her mother’s intruding upon the father’s home even though it was the former matrimonial home resulted in an explosion of emotion for [X].  The event has created in [X] the belief that she is responsible for the conflict and anger because she needed to go to the bathroom.

24. Ms S describes how young children react to distressing events in physical ways, for example sleep problems, not wanting to go to bed at night, difficulties getting to sleep, staying in their own beds and enduring nightmares.

25. Ms S observed both parents and says that the material from both parents side suggest that the husband is a capable and loving parent and the mother a competent and loving mother.  Ms S says that the husband is concerned that the wife is turning [X] against him.  Ms S says that the reticence [X] is demonstrating as described by both parents indicates that her reticence is a valid response to an emotionally distressing event.  She describes the husband’s impatience to overnight as premature since it would also have increased the feeling of stress and anxiety to both parents.

26. Ms S says that children of [X]’s age are not able to be truly alienated in the psychological sense.  [X]’s ability to reason is limited and she will react to what she sees.  A negative experience will produce a negative response and a positive experience will build a positive response.

27. Ms S says that [X] needs to rebalance the negative exposure to her parent’s conflict with a positive experience which does not revisit distressing events.  She would not benefit from too much exposure to the space where her exposure to conflict occurred.

28. Ms S noted that both children were able to play well in her playroom with the father.  She says they were observed to push the limits with each parent and each parent handled them competently.

29. Ms S says that the best way forward for [X] is to remain with daytime contact which will be beneficial in reconstructing a foundation for her relationship with her much loved father.  She will get to know him again and experience time without stress at his house and then to overnight time.

30. Ms S recommends that the children spend time with the father on Mondays and Fridays from 10.00am to 4.00pm and for two hours midweek on Wednesday if the husband is available.  She recommends time on birthdays and Mothers Day and Father’s day.  She recommends that one overnight session commence when [X] reaches the age of four and [Y] reaches two a half years of age subject to no incidence of conflict at transition.

31. Section 65DAA provides that if an order for equal shared parental responsibility is to be made the court must consider whether equal time or if not equal time substantial and significant time is in the children’s best interests and reasonably practicable. Neither party advocates equal time and given the husband’s occupation in business it is not practicable.

32. Section 60CA says that in making children’s orders the best interests of the children is the paramount consideration and s.60CC contains the best interests considerations.

33. The first of the primary considerations is the benefit to the children of a meaningful relationship with both parents.  The husband considers that his time needs to be increased to promote the relationship.  The expert evidence from Ms S is that increasing the time too soon would have the opposite effect, [X]’s anxiety would remain.

34. The second of the primary considerations is the need to protect the children from harm.  No evidence is relevant to this consideration.

35. Of the additional considerations the relevant ones are the children’s relationship with each parent and other persons, the extent to which each parent has participated in decision making about the children and spending time with the children, the effect on the children of any change in their circumstances, particularly separation from a parent and the ability of each parent to provide for the children’s needs including psychological and emotional needs.

36. The wife is the children’s primary carer.  Ms S recognises this and emphasises the need for the children to feel comfortable away from their principal carer.  The children are siblings and separating them is undesirable.  The wife describes them as being very close.  The children know and see their paternal grandmother and the maternal grandmother and grandfather.  The paternal grandfather died not long before the parties separated.

37. Both parties have participated in the care of the children.  Since separation the husband has actively pursued spending time with the children.

38. Ms S’s evidence about [X]’s anxiety shows that increasing time away from the wife needs to be dealt with carefully, otherwise that anxiety will continue.  Thus, too great a change in current arrangements too quickly may have a detrimental effect on the children.

39. Both parents have the ability to provide for the children’s needs.  They are well cared for with each parent and as Ms S notes both are loving parents.

40. The wife alleges family violence.  Both incidents described above, if the wife’s version is accepted, constitute family violence.  I do not need to make a finding about which version is correct.  The significance of the incidents is that it shows the conflict between the parents and how that upset the children, particularly [X].  The second incident on 7 February 2013 is particularly significant in Ms S’s assessment.

41. Ms S recommends that one overnight session commence when [X] reaches four and [Y] reaches two a half subject to no incidents of conflict at transition.  Given [Y]’s age she recommends that time occur frequently.  The wife’s proposal accords with this recommendation.  The important issue is to ensure that both children develop their meaningful relationship with the husband.  At the time of the family report Ms S concluded that that relationship was disrupted, particularly with [X] because of her anxiety.

42. While each party has expended much effort in putting their version of the history of events during the marriage and after separation, the significant evidence is Ms S’s assessment of the children’s relationship with the husband.  The husband is understandably anxious to increase his time with the children, particularly overnight time, but when Ms S wrote her report she described his wish to move to overnight time as premature.  I accept Ms S’s opinion that to move too quickly would not improve the children’s relationship with the husband but rather the opposite.

43. The mother’s proposal, once [Y] is two and a half, is for daytime time each Tuesday and then alternate weekends overnight from Saturday to Sunday.  The time at the moment is from 10.00am to 4.00pm on Monday and Friday in each week.  The mother’s proposal means that every second week the children would spend a whole week without seeing their father unlike at present when the gap is three days.  A better way of promoting the children’s relationship with their father is to provide for fortnightly overnight time at a weekend and in the other week provide for a second day which is 10.00am to 4.00pm.  The orders will provide for two hours on each child’s birthday, 10.00am to 4.00pm on Father’s Day and the suspension of time on Mother’s Day.

1. [X] will commence school in 2015 but, unfortunately, circumstances are such that it is not possible to assess what times with the husband would be in the children’s best interests.  Much depends on how the children’s relationship, particularly [X]’s relationship, with the husband develops and whether the parties can develop a cooperative relationship in parenting their children.  If things go well a substantial increase in the time the children spend with the husband might be in their best interests.  If things do not go well a reconsideration of the current times might be necessary.

2. While the parties agree that the children should not spend equal time with each parent, I must consider whether the orders are reasonably practicable in terms of substantial and significant time.  Given what I have found about the children’s best interests they provide for such substantial and significant time as is practicable.  Apart from best interests considerations, the ability of the parties’ relationship is such that they do not have the ability to cooperate and deal with problems which might arise if the children spent more time with the husband.

Property

1. The parties entered into a binding financial agreement dated [omitted] 2008. This is two days before the wedding. The agreement is made under s.90B that is a financial agreement before marriage. The wife accepts that all the relevant requirements under Part VIII were complied with and so it is binding unless set aside. The wife applies to set it aside. The grounds she relies upon are that the husband exercised duress or undue influence or engaged in unconscionable conduct and that there has been a material change in circumstances relating to the care, welfare and development of a child of the marriage and that the wife will suffer hardship if the court does not set the agreement aside.

2. Section 90K of the Family Law Act 1975 (Cth) provides for setting aside binding financial agreements made under part VIII. The parts of the section relevant to this application are:

   (1)  A court may make an order setting aside a financial agreement or a termination agreement if, and only if, the court is satisfied that:

   (b)       the agreement is void, voidable or unenforceable; or

   (d)       since the making of the agreement, a material change in circumstances has occurred (being circumstances relating to the care, welfare and development of a child of the marriage) and, as a result of the change, the child or, if the applicant has caring responsibility for the child (as defined in subsection (2)), a party to the agreement will suffer hardship if the court does not set the agreement aside; or

   (e)  in respect of the making of a financial agreement--a party to the agreement engaged in conduct that was, in all the circumstances, unconscionable; or

   (2) For the purposes of paragraph (1)(d), a person has caring responsibility for a child if:

   (a)  the person is a parent of the child with whom the child lives; or

   (b)  a parenting order provides that:

   (i)      the child is to live with the person; or

   (ii)  the person has parental responsibility for the child.

3. The preambles to the agreement provide in preamble K that each party considered the possibility that either or both of them might be affected by a change in circumstances and lists the number of things which include the birth of children.  Preamble L recites that before the agreement was executed the parties have each been separately provided with independent legal advice.

4. The agreement sets out the assets of the wife in Schedule 1 and the assets of the husband in Schedule 2.  Paragraph 4 of the agreement sets out that the wife agrees she has made no contribution to the husband’s assets in Schedule 2.  Paragraph 5 provides that the husband agrees that he has made no contribution to the wife’s assets in Schedule 1.

5. Paragraph 14 provides that the parties agree that in the event that their marriage ends the wife retain the assets in Schedule 1 and the husband the assets in Schedule 2.  Paragraph 14 provides for property and resources acquired jointly by the parties after the marriage.

6. The assets of the wife set out in Schedule 1 are motor vehicle $10,000 and superannuation with no value assigned to it.  The assets of the husband set out in Schedule 2 are:

   House at Property N    $280,000

   Suncorp Bank term deposit                 $390,000

   Bendigo Bank personal account              $  20,000

   Superannuation   $      ......

7. A handwritten note on Schedule 2 is “add figure for superannuation”.

8. The wife’s evidence relied on for the claim that the agreement should be set aside for duress, undue influence or unconscionable conduct is straightforward.  The parties became engaged to marry in December 2007 the wedding date was set for [omitted] 2008.  As might be expected, by [omitted] 2008 all the arrangements were in place.  The wedding reception was paid for by the wife’s parents and by [omitted] 2008 they had expended, according to the wife, in excess of $35,000, and according to the wife’s mother $40,000 or more.  All the guests were invited including some from interstate.  The wife describes the time immediately prior to the marriage as a very hectic period, evidence I readily accept.

9. The wife says that the husband first raised the issue of entering into a prenuptial agreement on the evening of 12 November 2008, three days before the wedding.  She says he handed her a copy of the proposed agreement already signed by him.  She asked him what would happen if she did not sign it and she says that the husband said that if she would not the wedding was off.

10. The wife then says that the husband made arrangements for her to attend on Mr C of [omitted] lawyers on the following day [omitted] 2008.  Mr C’s office was in [address omitted], Melbourne and the wife was driven there by the husband.  The wife says that the husband’s mother was also in the car.  The husband and his mother waited in the car while the wife attended Mr C.  She says that the conference lasted only 15 or 20 minutes.  She says that Mr C told her she would receive the items listed in Schedule 1 and the husband would retain the items in Schedule 2.  She says she recalls Mr C making a comment about the agreement changing when the husband and she had children.  She says he did not go through each paragraph of the proposed agreement.  She says that Mr C concluded the conference saying to her that if she was his client he would tell her not sign the agreement and she says she replied that she was getting married in two days and she had no choice.

11. The husband says that he informed the wife in February 2008 of his intention to enter into a prenuptial agreement.  He says that his father had advised him to do so.  He says that the signing of the prenuptial agreement was the last on the “what to do list” prior to the wedding.  He says there was no urgency to rush this.  He signed the prenuptial agreement [date omitted] 2008 and gave the respondent a copy that day and told her she would have to get it reviewed and signed by an independent lawyer.  He says that she chose Mr C and on [date omitted] 2008 he drove her to the appointment.  He waited in the car.  He says his mother was not present.  The husband denies that he told the wife the wedding was off if she did not sign the agreement.

12. The wife in her affidavit evidence denies that the husband mentioned or discussed a prenuptial agreement with her early in 2008.  In her oral evidence she said that she could not remember any discussion.

13. Mr C gave evidence by video link from prison.  By order of the Supreme Court of Victoria made on 21 June 2011 a Receiver from the Law Institute of Victoria was appointed to Mr C’s practice.  When he gave evidence he said he had no recollection of the wife or of meeting her or signing an independent lawyer certificate for the purpose of the agreement.  He identified the signature on the certificate as his.  The wife’s affidavit contains evidence of an enquiry made by her solicitors to the Law Institute of Victoria and a response that there were no client files or Deed document in the name of the wife or her maiden name retrieved from Mr C’s practice.  Mr C gave evidence that all his files had been taken by the Law Institute of Victoria.

14. The husband relied upon what he describes as an affidavit by his stepbrother, Mr H.  The document is annexed to the husband’s affidavit of 5 March 2013 as annexure CP11.  While the affidavit is in regular form and sworn before a Senior Sergeant of Police it is not filed in the usual way.  It is on the court file as an annexure to a regularly filed affidavit.  The husband, by the time he filed this affidavit, was self represented and clearly did not appreciate that the affidavit should be a separate document.

15. Whether the document is properly before the court does not matter.  It states no more than soon after the engagement of the parties on [date omitted] 2007 Mr H became aware that the husband had raised the issue of a prenuptial agreement with the wife.  The document does not state how Mr H became aware.  There is no way of knowing whether Mr H’s knowledge was based on something which would be admissible evidence or not.  The document or affidavit, even if properly before the court, adds nothing to the evidence.

16. The husband’s evidence of informing the wife about the prenuptial agreement is non-specific.  He asserts in his affidavit of 5 March 2013 that she understood where he was coming from.  He asserts that she vehemently maintained she did not care about the money and was comfortable in signing the agreement.  He gave oral evidence and so had the opportunity to be specific about where and when or in what circumstances the conversations took place, whether other persons were present and whether any detail was discussed.  The wife, while her affidavit denied discussions as alleged by the husband in his affidavit, said in her oral evidence that if there was anything said about a prenuptial agreement she did not remember it.

17. I consider that the wife is being frank in her evidence.  I accept that if the husband did mention a prenuptial agreement what was said was so non-specific that it seemed unremarkable to the wife.  His assertion that in some way she vehemently maintained she did not care about the money and was comfortable in signing the agreement is not probable and I do not accept that it happened.

18. The husband’s evidence is that the prenuptial agreement was raised by him in February 2008 and then not again until he produced the document already prepared and signed by him to the wife.  The wife is intelligent and sensible.  If she was so aware of the need to make the binding financial agreement as the husband asserts the probability is that she would have said something to the husband about it at some time prior to 3 days before the wedding.  The inference from all the evidence is that the husband did not say anything about a prenuptial agreement prior to [date omitted] 2008 or if he did, it was so non-specific that it was far removed from any discussion which could be taken as acceptance by the wife that there would be a prenuptial agreement, particularly of the sort which was entered into.

19. I find therefore that the first the wife was aware that the husband wanted a written prenuptial agreement which gave the wife no claim to assets then owned by the husband was when he presented her with the document already signed by him on [omitted] 2008.  The natural reaction of a woman in the wife’s then circumstances, three days before the wedding, with the arrangements all made and a substantial amount of money spent would be to ask what would happen if she did not sign it.  I find that the wife did.  The wife is believable when she says that the husband’s response was that if she did not sign it the wedding was off.  I find that he did.  I find that the husband made the arrangements for the wife to attend on Mr C.  He accepts that he drove her to the appointment although he denies that his mother came as well.  It matters little whether she was there or not.

20. In Pascot and Pascot [2011] FamCA 945 Le Poer Trench J examined the authorities on duress, undue influence and unconscionable conduct in the context of s.90K. At [266] His Honour refers to a passage by Brennan J in Louth v Diprose [1992] HCA 61; (1992) 175 CLR 621.

    The jurisdiction of equity to set aside gifts procured by unconscionable conduct ordinarily arises from the concatenation of three factors: a relationship between the parties which, to the knowledge of the donee, places the donor at a special disadvantage vis-à-vis the donee; the donee's unconscientious exploitation of the donor's disadvantage; and the consequent overbearing of the will of the donor whereby the donor is unable to make a worthwhile judgment as to what is in his or her best interest 18. A similar jurisdiction exists to set aside gifts procured by undue influence. In Commercial Bank of Australia Ltd. v Amadio19, Mason J. distinguished unconscionable conduct from undue influence in these terms:

    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. Deane J. identified the difference in the nature of the two jurisdictions:

    Undue influence, like common law duress, looks to the quality of the consent or assent of the weaker party ... Unconscionable dealing looks to the conduct of the stronger party in attempting to enforce, or retain the benefit of, a dealing with a person under a special disability in circumstances where it is not consistent with equity or good conscience that he should do so. Although the two jurisdictions are distinct, they both depend upon the effect of influence (presumed or actual) improperly brought to bear by one party to a relationship on the mind of the other whereby the other disposes of his property. Gifts obtained by unconscionable conduct and gifts obtained by undue influence are set aside by equity on substantially the same basis.

21. To have the agreement set aside for duress, undue influence or unconscionable conduct the wife needs to establish that she was in a position of special disadvantage known to the husband.  The special disadvantage can arise from a particular situation.

22. On [date omitted] 2008 the wife had been in a relationship with the husband for 6 years.  She had been engaged to be married for 11 months and was to be married in three days.  All the arrangements were made, all the guests had been invited, and the wedding reception had been paid for by the wife’s parents.  The wife is then told by the husband that if she does not sign the prenuptial agreement the wedding is off.  The wife was in the position of “special disadvantage”.  If she did not sign the prenuptial agreement not only was the wedding cancelled but the likely result of such a traumatic event would be that the wife’s relationship with the husband would be over.  This after six years and an 11 month engagement.

23. The wife says she considered that she had no choice.  She was clearly in a position of special disadvantage and the husband knew so.  The prenuptial agreement was not to the wife’s advantage.  It gave her no rights at all in the future to any of the husband’s property.  She knew that it was to her disadvantage because Mr C told her so.  Nevertheless, she signed it because she considered she had no choice.

24. The husband knew that the wife was in a position of special disadvantage.  The only inference from his late production of a completed and signed agreement is that he wanted to give the wife no choice and he knew that if it was presented to her days away from the wedding she would have no choice.  I infer that the husband considered there was no risk that the wife would refuse to sign the binding financial agreement and cancel the wedding.

25. The wife’s consent to the agreement was not independent and voluntary because it was overborne thus she was subject to duress and undue influence by the husband.  In the words of Mason J “the will of the innocent party is not independent and voluntary because it is overborne”.  The requirements of duress or undue influence are satisfied.

26. In Pascot and Pascot Le Poer Trench J found duress and undue influence and did not consider it necessary to examine whether there had been unconscionable conduct.  Similarly, I do not need to consider unconscionable conduct but I will do so.  In this case, if the wife’s consent to the binding financial agreement was independent and voluntary she was at a special disadvantage, and to apply Mason J’s words, the husband as the stronger party is attempting to enforce, or retain the benefit of, a dealing with a person under a special disability in circumstances where it is not consistent with equity or good conscious that he should do so.

27. If the requirements of duress and undue influence are not satisfied because the wife’s consent was independent and voluntary then the requirements for unconscionable conduct are satisfied.

28. The requirements to set aside the agreement under either s.90K(1)(b) or (e) are satisfied.

29. In Pascot and Pascot Le Poer Trench J examined the requirements of s.90K (1)(d). At [354] he said:

    For the purposes of sec 90K(1), it would be useful to adopt the test in the following terms:

    There must be circumstances that have arisen since the making of the Binding Financial Agreement, being circumstances of a material nature relating to the care, welfare and development of a child of the marriage;

    It must be demonstrated that the child or the applicant, if she has caring responsibility for the child, will suffer hardship if the court does not set the agreement aside;

    The court may set the agreement aside if it considers it appropriate and make such orders under sec 90K(3) as it deems appropriate.

30. In Pascot and Pascot the parties had two children at the time of the agreement.  At the time of the application to set aside they had three.  At [360] Le Poer Trench J said:

    It also needs to be remembered in this case that at the time the Agreement was signed the parties only had one child, although the fact of the pregnancy of the wife with the second child was set out in the recitals. The impact upon a parent of having the care of three children as opposed to two is significant in many ways. Not the least are the cost of supporting the child, the effort involved in caring for three young children, the time involved in caring for three, the additional cost of day care if the parent has work outside the house.

31. Since the marriage the wife has had two children.  The considerations Le Poer Trench J refers to are magnified because the wife had no children at the time of the agreement and now has two children.  There has been a material change in circumstances of the type required.

32. The wife does have caring responsibility for both children as defined by s.90K(2).

33. The wife will suffer hardship if the agreement is not set aside.  She has the major responsibility caring for the children including the major financial responsibility.  She was employed full-time at the time of the marriage and so at the time of the agreement.  She is now engaged in the full-time care of the children and is dependent upon social services payments and child support from the husband.  She owns no property.  The motor vehicle listed as her only asset, apart from superannuation, in the financial agreement has been sold and the money spent on the care of the family.  The wife is driving a car owned by the husband.  The agreement does not adequately provide for the responsibility the wife has for the children.

34. The husband’s financial statement values Property N at $330,000.  After the marriage the husband purchased the former matrimonial home at Property H.  His financial statement values it at $725,000.  He values his [omitted] business at $283,722 being the stock at 31 March 2013.  He gives his only liability as $395,000 lent by his parents.  One of his affidavits says this was lent for the purpose of him establishing the [omitted] business.

1. The inference is that the substantial amount of money in Schedule 2 of the financial agreement was used, or substantially used to purchase the former matrimonial home.  The provisions of the agreement mean that the wife would have no claim on the matrimonial home, the property at Property N or the [omitted] business.

2. If the agreement is not set aside the wife will have no claim to any of the substantial assets in the husband’s name.  She will suffer hardship if that happens.

3. The agreement should be set aside under s.90K(1)(d).

I certify that the preceding eighty-two (82) paragraphs are a true copy of the reasons for judgment of Judge Phipps

Date:  24 January 2014