Purdey and Millington
[2018] FCCA 213
•7 February 2018
FEDERAL CIRCUIT COURT OF AUSTRALIA
| PURDEY & MILLINGTON | [2018] FCCA 213 |
| Catchwords: FAMILY LAW – Financial Agreements – Wife seeking declaration that a financial agreement executed by the parties is not a binding financial agreement within the meaning of s.90G of the Family Law Act 1975 (Cth) – whether Wife was provided with independent legal advice – onus of proof on Wife to adduce evidence which would disprove or throw into doubt the inference or conclusion to be drawn from s.90G statement – whether unjust or inequitable if the financial agreement were not binding on the parties – financial agreement declared not binding – parties not constrained by s.71A of the Family Law Act 1975 (Cth) in relation to property proceedings. |
| Legislation: Family Law Act 1975 (Cth), ss.44, 71A, 79, 90C(1), 90G, 90K |
| Cases cited: Abrum & Abrum [2013] FamCA 897 Hoult & Hoult [2013] FamCAFC 109 Logan & Logan [2013] FamCAFC 151 |
| Applicant: | MR PURDEY |
| Respondent: | MS MILLINGTON |
| File Number: | PAC 286 of 2011 |
| Judgment of: | Judge Jones |
| Hearing dates: | 17-18 August 2017, 4 October 2017 |
| Date of Last Submission: | 4 October 2017 |
| Delivered at: | Melbourne |
| Delivered on: | 7 February 2018 |
REPRESENTATION
| The Applicant appeared in person. |
| Counsel for the Respondent: | Mr Mokhtar of Marsdens Law Group |
| Solicitors for the Respondent: | Marsdens Law Group |
DECLARATIONS
The financial agreement entered into by Mr Purdey and Ms Millington on 16 September 2014 is not a binding financial agreement within the meaning of s.90G of the Family Law Act 1975 (Cth).
ORDERS
The property proceedings be listed for mention on 8 March 2018 at 9.30am in the Dandenong Registry before Judge Burchardt.
IT IS NOTED that publication of this judgment under the pseudonym Purdey & Millington is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT DANDENONG |
PAC 286 of 2011
| MR PURDEY |
Applicant
And
| MS MILLINGTON |
Respondent
REASONS FOR JUDGMENT
Introduction
These proceedings commenced as parenting proceedings initiated by Mr PURDEY (“the Husband”) on 5 September 2016. By her Amended Response filed on 13 October 2016, Ms MILLINGTON (“the Wife”) seeks a declaration that an agreement executed on 16 September 2014 by the parties and titled “Financial Agreement Under Section 90C of The Family Law Act 1975” (Annexure C to the Wife’s affidavit filed on 11 August 2017) (“the Financial Agreement”) is void and voidable and is set aside. The Wife also seeks an alteration of the parties’ interests in property. In his Amended Initiating Application filed on 19 July 2017, the Husband seeks an order that the Wife’s application so far as it concerns property be dismissed.
Although in her Amended Response the Wife sought an order which, in in its terms, appeared to be relying on s.90K of the Family Law Act 1975 (Cth) (“the Act”), the case as run on behalf of the Wife by her legal representative focused almost entirely on whether the Financial Agreement was a binding one within the meaning of s.90G of the Act. No reference was made by the Wife’s solicitor during the course of the proceedings to the terms of s.90K of the Act. The authorities relied upon by the Wife’s solicitor were authorities which only concerned the operation of s.90G of the Act. There was a fleeting reference during the submissions of the Wife’s solicitor to the question of duress, the submission being that there was a level of threat and force at the time of the parties entering the Financial Agreement and therefore that duress was applied upon the Wife by the Husband to sign the Financial Agreement. The evidence relied upon by the Wife’s solicitor to support this submission (Affidavit of the Wife filed on 11 August 2017 at [176]), however, was not put to the Husband in cross-examination. Accordingly, I have proceeded in this decision on the basis that the Wife seeks a declaration that the Financial Agreement is not a binding financial agreement within the meaning of s.90G of the Act.
The matter was listed for final hearing on 17 August 2017 with an estimated hearing time of two days in relation to the disputed parenting and property matters. Final Consent Orders were made in relation to parenting arrangements for the parties’ two children, X born (omitted) 2006 (“X”) and Y born (omitted) 2008 (“Y”) (collectively “the children”), on 17 August 2017. This decision concerns only the Wife’s application for a declaration with respect to property matters.
The Wife relies on her Outline of Case filed on 15 August 2017 and her affidavits filed on 13 October 2016 and 11 August 2017. The Husband relies on his Outline of Case filed on 14 August 2017 and his affidavits filed on 11 November 2016 and 19 July 2017. Both parties were cross-examined at the hearing.
At the hearing held on 17 August 2017, the Husband informed the Court that he had attempted to contact a Ms J (“Ms J”), whom the Husband said was the lawyer the Wife attended for the purpose of obtaining independent legal advice in relation to the Financial Agreement. The Husband indicated that he wished for Ms J to give evidence in support of his case. The Husband provided the Court with Ms J’s contact details.
Ms J attended the hearing by telephone and gave oral evidence on 17 August 2017. During the course of her evidence, Ms J said that she kept file notes of the meeting she had with the Wife on 16 September 2014. Ms J said that she had retained these file notes and that the file containing the file notes was in a storage facility.
The Wife’s solicitor called for the file notes of Ms J’s meeting with the Wife to be produced by Ms J. Ms J consented to swearing an affidavit annexing a copy of any file notes and documents relating to the invoicing and payment of the fee for the Wife’s attendance upon her on 16 September 2014. Ms J said that as the file was in storage, she would require at least two weeks to prepare said affidavit. An order was made on 17 August 2017 that Ms J produce by way of affidavit all file notes recorded by her in relation to the Wife’s attendance on her on 16 September 2014, including information regarding the payment of fees for the meeting and those attending the meeting, on or before 31 August 2017.
An affidavit of Ms J sworn on 30 August 2017 was filed by the Husband on 30 August 2017. The hearing resumed part-heard on 4 October 2017.
Background
The Husband was born in (country omitted) on (omitted) 1974 (currently aged 43 years) and the Wife was born in (country omitted) on (omitted) 1984 (currently aged 33 years). The Husband became an Australian citizen in 2002. The parties married in (country omitted) on (omitted) 2003, after which the Husband returned to Australia. The Wife immigrated to Australia on a spousal visa in (omitted) 2005. The Wife is now an Australian citizen. The parties lived together in Sydney, the Husband working full-time as a (occupation omitted) mainly in the afternoons and on weekends. There are two children of the relationship, X and Y.
The Husband sustained injuries in a motor vehicle accident on (omitted) 2010 (“the accident”).
Both parties agree that from (omitted) 2011 to (omitted) 2011 the Wife travelled with the children to and lived in (country omitted). The Husband alleges that the parties separated in February 2011 when the Wife took the children to (country omitted) for seven months and that the parties then resumed their relationship when the Wife returned to Australia. The Wife denies this. The Wife says that the Husband told her to go and live with the children in (country omitted) with her parents so that the Husband could save money. The Husband, whilst denying the Wife’s version of the circumstances under which she left for (country omitted), gave evidence at the hearing that during the time the Wife and the children were in (country omitted) he was able to work longer hours.
On (omitted) 2011, the Husband received a lump sum payment of $275,000 for lost income and lost earning capacity arising out of the accident (“the compensation payment”). The Husband says that, after repaying his Centrelink debt, his legal fees and his medical fees, he received a net amount of $190,000.
In (omitted) 2011, the Husband purchased a property in his name situated at Property A, New South Wales (“the former matrimonial home”) for $360,000. The Husband paid $255,993 towards the purchase price. A mortgage was taken out by the Husband in the amount of $100,000 from (omitted) Bank. Both parties agree that the purchase of the former matrimonial home was funded by a combination of the compensation payment, money in savings and a $7,000 First Home Buyers Grant. The parties disagree about the amount of the compensation payment that was applied to the purchase. The Wife alleges that the Husband transferred $25,000 to $35,000 of the compensation payment to (country omitted) in 2011. The Husband says that he applied most of the compensation payment to the deposit on the former matrimonial home and used the remainder of the compensation payment to renovate the property. The parties agree that savings of $100,000 were applied to the deposit. The Wife alleges that the savings were joint savings. The Husband alleges that the savings were his savings only.
The Wife commenced attending English language classes when she arrived in Sydney in (omitted) 2005. The Wife says she studied English classes in (omitted) 2005, but ceased studying when she became pregnant. The Wife says she then recommenced her English studies in 2009 for two to three months and again in 2010 for two months. The Wife says that in (omitted) 2014, she commenced studying for a Technical and Further Education (“TAFE”) diploma in (omitted), but ceased studying towards the end of the year. The Wife says that she was advised by her TAFE teachers that she should continue her studies at a (qualifications omitted) level as her English was not proficient enough to study at the diploma level. The Wife stopped studying altogether in late 2014. The Wife says she can communicate in every day English and understand and complete basic sentences, but that she cannot easily understand more complex English, including legal language.
The Husband ceased working full-time in 2010 after the accident, but says that he continued to work part-time. In (omitted) 2014, the Husband underwent spinal surgery for his injuries, following which the Wife cared for him for a period of three months. The Wife received a Carer Payment from Centrelink for the time that she cared for the Husband after both the accident and the Husband’s surgery. The parties agree that the Carer Payment received by the Wife was applied to the payment of the mortgage over the former matrimonial home. Following his recovery, the Husband returned to part-time work. The Husband says he has been unable to work full-time since his surgery.
In (omitted) 2014, the Wife commenced a home-based (omitted) business. The Wife said the (business omitted) were from (country omitted) and communicated with her in the (omitted) language. The Wife said she ceased operating her (omitted) business when she stopped studying at TAFE.
On 16 September 2014, the parties signed and executed the Financial Agreement.
On 26 September 2014, the parties separated when the Wife moved out of the former matrimonial home with the children.
In early 2015, the Husband sold the former matrimonial home, relocated to Melbourne and purchased a two bedroom unit in (omitted). In (omitted) 2015, the Husband met his second wife, Ms M (“Ms M”) while holidaying in (country omitted). On (omitted) 2016, the Husband and Ms M’s first child, A (“A”), was born in (country omitted). Ms M and A travelled to Australia on (omitted) 2016.
The Financial Agreement
The Financial Agreement commences by defining the separate property of the Husband and the Wife by reference to Annexures A and B of the Financial Agreement (Annexure C to the Wife’s affidavit filed on 11 August 2017 at 43).
The separate property of the Husband is identified in Annexure A of the Financial Agreement as follows (Annexure C to the Wife’s affidavit filed on 11 August 2017 at 49):
Assets (of Husband)
Agreed Estimated Value
Property A, New South Wales
$550,000
Toyota (omitted), Registration Number (omitted)
$5,500
(omitted) Bank Account
$351.11
Total Assets (of Husband)
$555,851.11
Liabilities (of Husband)
Agreed Estimated Value
Mortgage
$93,939.52
Total Net Assets (of Husband)
$461,911.59
The separate property of the Wife is identified in Annexure B of the Financial Agreement as follows (Annexure C to the Wife’s affidavit filed on 11 August 2017 at 50):
Assets (of Wife)
Agreed Estimated Value
Toyota (omitted), Registration Number (omitted)
$5,500
(omitted) Bank Account
$167.16
Total Assets (of Wife)
$5,667.16
Liabilities (of Wife)
NIL
Total Net Assets (of Wife)
$5,667.16
The joint property of the parties is identified in Annexure C of the Financial Agreement as follows (Annexure C to the Wife’s affidavit filed on 11 August 2017 at 51):
Joint Assets
Agreed Estimated Value
Furniture
$4,000
White Goods
$6,000
Total Joint Assets:
$10,000
Joint Liabilities
NIL
Total Net Joint Assets
$10,000
At [4] of the Financial Agreement (Annexure C to the Wife’s affidavit filed on 11 August 2017 at 44), the date of the parties’ separation is specified as 6 July 2014. This date contradicts the agreed evidence of both the Husband and the Wife that the parties separated on 26 September 2014.
Paragraph 5 of the Financial Agreement sets out the division of property in the event of breakdown of the marriage as follows (Annexure C to the Wife’s affidavit filed on 11 August 2017 at 44-45):
(a) Each party will remain individually entitled to their separate property and to their interest in joint property to the exclusion of the other and have the right inter vivos or by will to dispose of any such property as they see fit;
(b) With respect to the Joint property, Ms Millington would within 183 days from the date of this Agreement do all things necessary to take full possession and control of them and to remove them from the property;
(c) Mr Purdey continue to pay as they fall due all regular instalments in respect of the mortgage, council rates and water rates in respect of the property;
(d) Mr Purdey would pay Ms Millington the sum of $25,000 the earlier of Six (6) months from the date of this Agreement or the settlement date on the sale of the property;
(e) The property will be placed on the market by Mr Purdey with the intention that it would be sold and all the sales proceeds would be payable to Mr Purdey except the sum of $25,000.
The Wife was paid $25,000 following the sale of the former matrimonial home.
Paragraph 6 of the Financial Agreement provides that “…the parties each state and warrant to the other party that…he or she was provided with independent legal advice from a legal practitioner…” on “…[t]he effect of the agreement on the rights of that party…” and “…[t]he advantages and disadvantages, at the time that the advice was provided, to the party of making the agreement” (Annexure C to the Wife’s affidavit filed on 11 August 2017 at 45).
On the execution page of the Financial Agreement under the heading “Executed As An Agreement” (Annexure C to the Wife’s affidavit filed on 11 August 2017 at 48), there are signatures by the Husband and the Wife together with the signatures of a Mr K (“Mr K”) and Ms J who are identified as the witnesses for the Husband and the Wife respectively to the execution of the Financial Agreement.
Annexed to the Financial Agreement are two statements said to be made under s.90G of the Act. The first statement is made and signed by Mr K, solicitor of Machiao Lawyers, and dated 16 September 2014 (Annexure C to the Wife’s affidavit filed on 11 August 2017 at 52). Mr K states that he is a solicitor and was independently instructed by the Husband and certifies that he had provided the Husband with independent legal advice prior to entering into the Financial Agreement as to the following matters (Annexure C to the Wife’s affidavit filed on 11 August 2017 at 52):
1)the effect of the Financial Agreement on the rights of the parties; and
2)the advantages and disadvantages, at the time that the advice was provided, to the Husband of making the Financial Agreement.
The second statement annexed to the Financial Agreement is made and signed by Ms J, solicitor of Sydney Legal House, and dated 16 September 2014 (Annexure C to the Wife’s affidavit filed on 11 August 2017 at 53). Ms J states that she is a solicitor and was independently instructed by the Wife and certifies that she had provided the Wife with independent legal advice prior to entering into the Financial Agreement as to the following matters (Annexure C to the Wife’s affidavit filed on 11 August 2017 at 53):
1)the effect of the Financial Agreement on the rights of the parties; and
2)the advantages and disadvantages, at the time that the advice was provided, to the Wife of making the Financial Agreement.
The parties were married at the time the Financial Agreement was executed.
Statutory Provisions
Section 90C(1) of the Act provides that:
(1) If:
(a) the parties to a marriage make a written agreement with respect to any of the matters mentioned in subsection (2); and
(aa) at the time of the making of the agreement, the parties to the marriage are not the spouse parties to any other binding agreement (whether made under this section or section 90B or 90D) with respect to any of those matters; and
(b) the agreement is expressed to be made under this section;
the agreement is a Financial Agreement . The parties to the marriage may make the Financial Agreement with one or more other people.
(Emphasis in original)
There is no dispute that the Financial Agreement signed and executed on 16 September 2014 by the parties to these proceedings is a financial agreement within the meaning of s.90C(1) of the Act.
Section 90G of the Act provides that:
(1) Subject to subsection (1A), a Financial Agreement is binding on the parties to the agreement if, and only if:
(a) the agreement is signed by all parties; and
(b) before signing the agreement, each spouse party was provided with independent legal advice from a legal practitioner about the effect of the agreement on the rights of that party and about the advantages and disadvantages, at the time that the advice was provided, to that party of making the agreement; and
(c) either before or after signing the agreement, each spouse party was provided with a signed statement by the legal practitioner stating that the advice referred to in paragraph (b) was provided to that party (whether or not the statement is annexed to the agreement); and
(ca) a copy of the statement referred to in paragraph (c) that was provided to a spouse party is given to the other spouse party or to a legal practitioner for the other spouse party; and
(d) the agreement has not been terminated and has not been set aside by a court.
Note: For the manner in which the contents of a Financial Agreement may be proved, see section 48 of the Evidence Act 1995.
(1A) A Financial Agreement is binding on the parties to the agreement if:
(a) the agreement is signed by all parties; and
(b) one or more of paragraphs (1)(b), (c) and (ca) are not satisfied in relation to the agreement; and
(c) a court is satisfied that it would be unjust and inequitable if the agreement were not binding on the spouse parties to the agreement (disregarding any changes in circumstances from the time the agreement was made); and
(d) the court makes an order under subsection (1B) declaring that the agreement is binding on the parties to the agreement; and
(e) the agreement has not been terminated and has not been set aside by a court.
(1B) For the purposes of paragraph (1A)(d), a court may make an order declaring that a Financial Agreement is binding on the parties to the agreement, upon application (the enforcement application) by a spouse party seeking to enforce the agreement.
(1C) To avoid doubt, section 90KA applies in relation to the enforcement application.
(2) A court may make such orders for the enforcement of a Financial Agreement that is binding on the parties to the agreement as it thinks necessary.
(Emphasis in original)
In deciding whether the Financial Agreement is binding on the parties in the circumstances of this matter, there are two limbs to s.90G of the Act which the Court must consider. These limbs are:
1)whether the Financial Agreement and the circumstances in which it was made meet the mandatory provisions of s.90G(1) of the Act; and
2)in circumstances where the Court finds that the Financial Agreement does not meet one of more of the mandatory provisions as set out by s.90G(1)(b), (c) and (ca) of the Act, whether it would be unjust and inequitable if the Financial Agreement were not binding on the parties to the Financial Agreement pursuant to s.90G(1A)(c) of the Act.
The Wife argues that the Financial Agreement is not binding on the parties because she was not provided with independent legal advice by a legal practitioner before she signed the Financial Agreement as required by s.90G(1)(b) of the Act. The Wife further argues that it would not be unjust or inequitable, having regard to the circumstances at the time the Financial Agreement was made, if the Financial Agreement were not binding on the parties to the Financial Agreement.
The Husband argues that the Wife was provided with independent legal advice by a legal practitioner before she signed the Financial Agreement. The Husband further argues that, in the event the Court finds that the Wife was not given independent legal advice in accordance with s.90G(1)(b) of the Act, it would be unjust or inequitable, having regard to the circumstances at the time the Financial Agreement was made, if the Financial Agreement were not binding on the parties to the Financial Agreement.
Was The Wife Provided With Independent Legal Advice?
In Hoult & Hoult [2013] FamCAFC 109 (“Hoult & Hoult”), Thackray J stated at [60] to [63]:
60. In my view, the onus of establishing that an agreement is binding falls upon the party asserting that fact because the legislation provides that an agreement is binding “if, and only, if” the prescribed matters are established. It follows that the party relying upon the agreement must establish the existence of all those matters, including the giving of the requisite legal advice to both parties.
61. I recognise the potential forensic difficulty faced by a party who seeks to uphold a Financial Agreement when the other party claims not to have received the prescribed legal advice. However, the fact there is difficulty in proving something within the knowledge of only the other party and their solicitor does not mean the legal burden of proof passes to the party who seeks not to be bound by the agreement.
62. Importantly, however, I consider that once the party seeking to rely upon the agreement produces in evidence the certificate signed by the other party’s solicitor, there is a forensic obligation on the other party to adduce evidence which would disprove, or at least throw into doubt, the inference or conclusion to be drawn from the certificate (especially when read with the recital in the agreement to the same effect).
63. This forensic obligation is properly conceptualised as the burden of introducing evidence and should not be confused with the burden of proof as a matter of law and pleading. For a discussion of the difference see Purkess v Crittenden (1965) 114 CLR 164 especially at 167-168 per Barwick CJ, Kitto and Taylor JJ and 170-171 per Windeyer J.
In Logan & Logan [2013] FamCAFC 151 (“Logan & Logan”), the Full Court of the Family Court of Australia referred to the decision in Hoult & Hoult and stated that (Logan & Logan at [49]-[51]):
49. Their Honours were ad idem that the certificate given by the solicitor must be treated at least as prima facie evidence of compliance with the requirement to provide legal advice. Further, that is bolstered by the presence in a Financial Agreement of recitals such as appeared in the agreement in this case, namely in recitals O, P, Q and R, which in effect confirmed that the requisite legal advice was given.
50. Applying the principles emanating from Hoult, what the reliance by the Husband on the certificate, and the recitals, does is satisfy the initial onus on the Husband, and passes the evidentiary burden to the Wife. The certificate gave rise to “an inference, a presumption of fact or a presumptio hominis” (paragraph 97) that the requisite advice has been. The question then becomes whether the Wife has adduced sufficient evidence to displace that inference.
51. As was explained in Hoult in paragraphs 101 and 279, that does not then require an inquiry into the content of the legal advice, but just as to whether the advice was given.
The Wife argues that the Financial Agreement is not binding on the parties because she was not provided with independent legal advice by a legal practitioner in accordance with s.90G(1)(b) of the Act prior to signing the Financial Agreement.
Attached to the Financial Agreement, however, is a statement signed by Ms J attesting her provision of legal advice to the Wife with respect to the Financial Agreement (Annexure C to the Wife’s affidavit filed on 11 August 2017 at 53). Consequently, there is an evidentiary onus or forensic obligation on the Wife to disprove or throw into doubt any inference or conclusion to be drawn from Ms J’s statement.
Evidence
The evidence in relation to the period immediately preceding
16 September 2014 and that day is as follows.
The Parties’ Evidence
Both parties agree that prior to 16 September 2014, the Wife had been pressing the Husband to agree to a separation and had been doing so for some time. The Husband had initially refused, but eventually agreed that the parties should separate. The Husband’s evidence is that, once he agreed to separation, the Wife insisted that they should sign a Financial Agreement before she moved out of the former matrimonial home and then “…[their] marriage would be finally over” (Affidavit of the Husband filed on 11 November 2016 at [31]). The Husband says that the Wife said to him she would take the children and that she did not want anything else from the Husband. The Husband says that the Wife then later said that she wanted the amount that she had contributed to the mortgage of the former matrimonial home, this being the Wife’s Carer Payments she received for caring for the Husband. The Husband says that the parties calculated that the Wife’s Carer Payments totalled $8,000 each year for a period of three years and that he said that he would therefore pay the Wife $25,000. The Husband says that he and the Wife agreed that the Wife would also take the furniture and her car.
The Wife agrees that she informed the Husband that she wanted to separate, but denies that she pressed the Husband to enter into a financial agreement. The Wife’s evidence is that when the Husband talked to her about seeing solicitors to sign agreements, she thought that this was in relation to signing a separation agreement. The Wife agreed that she was happy to be paid the $25,000, but said that the parties did not discuss the former matrimonial home, only her contribution to the mortgage repayments.
The Wife said that her English reading and speaking abilities were limited in September 2014. The Wife further said that she did not have the assistance of an interpreter during her meeting with Ms J on 16 September 2014 and therefore did not understand the contents of the Financial Agreement when she signed it. The Wife says that she was not even aware that she was signing a Financial Agreement. The Wife agreed that she signed papers at the meeting with Ms J, but said that she thought that she was signing separation documents because she believed that in Australia, when parties wished to separate, they had to sign papers in front of lawyers to effect a legal separation. The Wife said that the Husband had told her there was a legal way of separating and that’s why she referred to the Financial Agreement as “separation documents”.
The Wife’s evidence was that she only realised that she had signed a Financial Agreement when she went to Legal Aid in 2016 seeking advice in relation to the Husband’s initiation of these proceedings and gave the lawyer the document she signed on 16 September 2014. The Wife said that after the Financial Agreement was signed by both parties she was not given a copy of the Financial Agreement. The Wife said that upon separation, the Husband gave her various documents that he said were relevant to her which she put together in a bag. The Wife said that she did not look at the Financial Agreement until she attended upon Legal Aid for the purposes of these proceedings.
The Husband said that two to three days prior to 16 September 2014, having looked up various solicitors in the phone book, he contacted Mr K of Machiao Lawyers and explained that he wanted to reach a financial agreement with his Wife. The Husband said that Mr K advised him that the parties would require two independent solicitors – one for himself, who would be Mr K, and one for the Wife. The Husband said that Mr K gave him the contact details for Ms J of Sydney Legal House. When asked why it was that the Husband still had in his possession Ms J’s business card from when she was still employed by Sydney Legal House, the Husband said he believed that he was either given it by Mr K or picked it up when he was waiting in the reception area of Sydney Legal House on 16 September 2014. The Husband conceded in cross-examination that the Wife said at some time preceding the meetings on 16 September 2014 that she wanted to see her own lawyer.
There is a dispute about who arranged the Wife’s appointment with Ms J. Both parties deny that they were the one who made the appointment.
The parties agree that on 16 September 2014 the Husband attended upon Mr K and that the Wife was present during that meeting. Both parties describe sitting around a table whilst Mr K drafted a document on his computer. The Wife says that she said nothing during the meeting and that the Husband did all the talking. The Husband said that he provided to Mr K a valuation of the former matrimonial home given to him by a real estate agent, but that he brought no other documents to the meeting in relation to the assets and liabilities identified in Annexures A and C to the signed Financial Agreement (Annexure C to the Wife’s affidavit filed on 11 August 2017 at 49, 51). The Husband said that he provided the valuations of said assets and liabilities verbally to Mr K. The Husband says that whilst he gave that information directly to Mr K, he confirmed the information with the Wife. The Husband agreed that a copy of the valuation of the former matrimonial home was not given to Ms J. The Husband signed the Financial Agreement whilst the Wife was still present. This process is said by the parties to have taken approximately a few hours.
The parties agree that after their meeting with Mr K, they then proceeded to the offices of Sydney Legal House. The Husband says that they did this together because the Wife did not know how to get there. There was some confusion in the evidence of the Husband at the hearing about whether Ms J was provided with the original Financial Agreement signed by the Husband and witnessed by Mr K or whether she was provided with a copy of the original Financial Agreement. I am satisfied, in the absence of any evidence to the contrary, that it was the original Financial Agreement that was provided to Ms J and that the Wife signed during the Wife’s attendance upon Ms J on 16 September 2014.
The Wife’s evidence is that the Husband did not inform her that Ms J was her solicitor and that the Husband was present during the meeting with Ms J when the Wife signed the document, which she believed to be legal separation papers. The Husband initially denied being present at all during the time the Wife attended upon Ms J, but later conceded in his oral evidence that he may have come into Ms J’s room at the beginning and at the end of the attendance. The Husband said that he was not present when Ms J gave “legal advice” to the Wife or when the Wife signed the Financial Agreement. I have considered the Husband’s changing evidence on this point. There is no reason for the Husband to have entered Ms J’s office at the beginning or at the end of her meeting with the Wife. On the balance of probabilities, I have formed the view that it is more likely than not that the Husband was present for the entire duration of Ms J’s meeting with the Wife.
The Wife says that her meeting with Ms J took around ten minutes. The Husband says that the meeting was 20 minutes.
The Husband agrees that he paid the fee for the Wife’s attendance on Ms J. The Husband said that he did this because the Wife said to him words to the effect of “I am not getting any property, so you should pay the fee.” This evidence given by the Husband at the hearing about what the Wife said to him regarding Ms J’s fee was not put to the Wife in cross-examination.
Ms L's Evidence
The Wife attached to her affidavit filed on 11 August 2017 a copy of an email dated 23 January 2017 from Ms L (“Ms L”) of Sydney Legal House to the Wife’s solicitor (Annexure E to the Wife’s affidavit filed on 11 August 2017 at 58-59). This email was responsive to communications from the Wife’s solicitor to Ms L enquiring as to whether there was a file in the name of the Wife at Sydney Legal House and whether a copy of said file could be sent to the Wife’s solicitor.
Ms L replied to the enquiry as follows (Annexure E to the Wife’s affidavit filed on 11 August 2017 at 58):
I have searched through our client database and confirmed that we did not act for Ms Millington. Hence, we do not have the file.
Ms L attended the hearing by telephone on 17 August 2017 and gave oral evidence. Ms L’s evidence was as follows:
1)she is an assistant at the offices of Sydney Legal House;
2)upon receiving the email from the Wife’s solicitor referred to in [54] above, Ms L sought instructions from a principal lawyer of Sydney Legal House who instructed her to search the computer system of the firm and all physical files held by the firm for a file in the name of the Wife. Ms L searched but did not find any record of a file in the Wife’s name;
3)she agreed that the offices of Sydney Legal House were relocated from Sydney to Chatswood. Ms L said that all physical files in the possession of Sydney Legal House were transferred to the new location;
4)she confirmed that Ms J previously worked for Sydney Legal House;
5)she stated that any file that existed in the name of the Wife would have remained with the firm;
6)all files opened in relation to clients of Sydney Legal House are recorded on the computer system and the computerised database has been in existence since the firm opened;
7)she confirmed that clients can make appointments with solicitors of Sydney Legal House directly;
8)in searching the firm’s database, Ms L also searched for a file in the Husband’s name and did not locate such a record.
Ms L gave evidence in a straightforward manner and I accept that her evidence was truthful.
Ms J's Evidence
Ms J attended the hearing by telephone on 17 August 2017 and gave oral evidence. Ms J’s evidence was as follows:
1)
she signed and executed a statement under s.90G of the Act on
16 September 2014;
2)on 16 September 2014 she was a solicitor employed by Sydney Legal House and held a valid practising certificate at the time;
3)the Wife made an appointment directly with her to attend upon her to discuss a “deed”;
4)the Wife said Mr K had referred her to Ms J because she needed independent legal advice regarding the Financial Agreement;
5)the Wife attended the offices of Sydney Legal House on 16 September 2014 with another person. Ms J could not recall if the Husband was in her office during her meeting with the Wife;
6)she had received a copy of the Financial Agreement two or three days prior to the meeting;
7)at the meeting with the Wife she went through the relevant provisions of the Act in relation to the effect of the deed and went through each page of the deed so that the Wife would understand what was “going on”. The Wife agreed to execute the Financial Agreement at that meeting, which Ms J witnessed;
8)she spoke to the Wife in English during the meeting. Ms J said that as the Wife had an accent, she spoke slowly. Ms J did not ask what language the Wife spoke as she formed the view that the communication between the Wife and herself was comfortable. Ms J did not ask the Wife whether she required the assistance of an interpreter at the meeting for the same reason;
9)at the meeting the Wife confirmed she had separated from the Husband;
10)she kept file notes of the meeting with the Wife which she estimated took around 30 to 40 minutes;
11)she could not recall how payment for the meeting was effected, that is, what the fee was or who paid the fee;
12)she did not have a current practising certificate at the time of the hearing as she had taken a break from work as a solicitor.
Ms J swore an affidavit on 30 August 2017, filed on the same day, however, failed to comply with the orders of the Court made on
17 August 2017 that Ms J produce file notes recorded by her in relation to the attendance by the Wife on her on 16 September 2014.
In her affidavit filed on 30 August 2017, Ms J deposed that (Affidavit of Ms J filed on 30 August 2017 at [1]):
…Ms Millington came to our office seeking to receive independent legal advice on her Financial Agreement under section 90C of the Family Law Act 1975. She was in the room with me and not accompanied by anyone at the time when legal advice provided.
Ms J further deposed that (Affidavit of Ms J filed on 30 August 2017 at [2]):
[The Wife] spoke English well…she understood what the documents were all about and agreed to execute it against my advice not to accept the terms and conditions contained in the deed. I had offered her to make changes but refused as she was happy to accept it.
Ms J also deposed that “[the Wife] paid me a fee of an agreed amount of $250 in cash and a hand written receipt was provided” (Affidavit of Ms J filed on 30 August 2017 at [3]). A copy of said receipt was not annexed to Ms J’s affidavit.
Ms J was telephoned at the adjourned hearing on 4 October 2017 and, when questioned, was unable to explain why she had not produced the file notes of her meeting with the Wife in accordance with the Court’s orders. The Wife was understandably concerned about incurring further legal costs and her solicitor asked for an extension of time for Ms J to produce the file notes. I was not satisfied that Ms J would comply with any further order of the Court and was conscious of the costs incurred by the Wife in the proceedings thus far, so declined to provide Ms J with additional time to produce any documents. Ms J was not otherwise cross-examined in relation to her affidavit. In submissions to the Court, the Wife’s solicitor asked that an inference be drawn, in circumstances where Ms J, a previously qualified solicitor, was ordered to produce file notes recorded by her of the attendance of the Wife on her on 16 September 2014 and failed to do so, that there were no file notes recorded by Ms J at all.
In my opinion, Ms J skated on the edge of propriety for a practising lawyer for the following reasons:
1)she met with the Wife to provide legal advice, yet Sydney Legal House, for whom Ms J worked, has no record on their comprehensive electronic and physical databases of the Wife ever being a client of their firm;
2)she gave sworn evidence that she retained the Wife’s file when she ceased working for Sydney Legal House;
3)she did not comply with the Court’s orders for the production of the file notes which Ms J said in her oral evidence she had taken during the course of her meeting with the Wife, even though Ms J had earlier given evidence that the file was in storage and was given an opportunity by an adjournment to obtain the file notes. In my opinion, either Ms J failed to take any notes of her meeting with the Wife or she subsequently destroyed them.
I found Ms J not to be a witness of truth. Ms J gave oral evidence that she took notes of her meeting with the Wife, which she retained together with other relevant documents in the Wife’s file and placed in storage, yet Ms J failed to produce these file notes when given ample opportunity to do so.
In many respects, Ms J’s evidence was also inconsistent with the evidence of both the Husband and the Wife.
In her affidavit filed on 30 August 2017, Ms J deposed that the Wife paid her a fee for the meeting they had on 16 September 2014 in the amount of $250 cash and that the Wife was provided with a handwritten receipt. Ms J failed to produce a copy of said receipt. Ms J’s evidence is also contrary to the evidence of the Husband who says that he was the one who paid the fee for the meeting.
Ms J deposed that the meeting went for a period of 30 to 40 minutes. The Wife says the meeting went for approximately ten minutes and the Husband says approximately 20 minutes.
Ms J gave oral evidence that she received a copy of the Financial Agreement two to three days prior to her meeting with the Wife on
16 September 2014. This evidence is inconsistent with the evidence of both the Husband and the Wife, which is that the Financial Agreement was drawn up by the Husband’s solicitor, Mr K, on 16 September 2014, a copy of which was then subsequently taken to the offices of Sydney Legal House and given to Ms J at her meeting with the Wife.
At the hearing on 17 August 2017, Ms J gave oral evidence that she could not recall if the Husband was in her office during her meeting with the Wife. In Ms J’s affidavit filed on 30 August 2017, however, Ms J deposed that the Wife was not accompanied by anyone when Ms J provided her legal advice. The Wife gave evidence that the Husband was present at all times during the meeting and the Husband conceded in cross-examination that he was present at the commencement and at the end of the meeting, although the Husband said that he was not present when the Wife was given legal advice or when she signed the Financial Agreement.
In circumstances where I have found that Ms J is not a witness of truth, I reject her evidence set out in her affidavit filed on 30 August 2017 that she advised the Wife not to sign the Financial Agreement and that the Wife refused to accept any changes to the Financial Agreement suggested by Ms J, stating instead that she was happy with the Financial Agreement.
Findings
The Wife’s evidence about her periods of attending English classes and the reasons for ceasing her studies at TAFE were not challenged by the Husband in cross-examination. The Husband also did not challenge the Wife’s evidence that she operated her home-based (omitted) business for (omitted) whose country of origin was (country omitted) and who communicated with her in the (omitted) language.
The Wife had not worked, apart from the limited period she was operating her home-based (omitted) business during the parties’ relationship. I am satisfied that the Wife was the primary carer of the children during the relationship. The evidence before the Court is that the Husband worked long hours as a (occupation omitted) before his injury and after the injury required the care of the Wife for a period of time.
Consequently, I accept the Wife’s evidence that when arrangements were made for the parties to attend solicitors for the purpose of seeking legal advice in relation to the Financial Agreement, the Wife’s English speaking and reading skills were limited and that she believed she was attending on a solicitor to sign a separation agreement.
I am satisfied on the evidence before the Court that it was the Husband who made the appointment for the Wife to attend on Ms J on
16 September 2014. In his affidavit filed on 11 November 2016, the Husband deposes that he contacted Mr K, his solicitor, that Mr K suggested Ms J as the independent solicitor for the Wife, and that “we” made appointments with Mr K and Ms J on the same day to sign the Financial Agreement (Affidavit of the Husband filed on 11 November 2016 at [34]). In my opinion, it seems very unlikely, given the Wife’s limited English speaking skills and exposure to the world outside her home life, that the Wife would have made an appointment to see Ms J on the same day that the Husband had made an appointment to attend upon Mr K.
The Husband called Ms J to appear at the final hearing as a witness in support of his case. On the first hearing date, the Husband had in his possession Ms J’s business card from the time she was working for Sydney Legal House. It is apparent that the Wife had no details for Ms J in her possession in preparation for trial or until the production of Ms J’s business card containing her contact details by the Husband at the hearing on 17 August 2017. In my opinion, Ms J’s business card was either provided to the Husband by Mr K for the purpose of arranging an appointment for the Wife with Ms J, or was given to the Husband by Ms J because it was the Husband who had arranged the appointment.
In my view, it is more probable than not that the Husband, knowing the date on which he had made an appointment with his own solicitor, then made an appointment for the Wife to see Ms J as suggested by Mr K.
The file notes of the meeting held on 16 September 2014 are not in evidence. Ms J was ordered by the Court on 17 August 2017 to produce these file notes and failed to do so. As a former qualified solicitor, Ms J understood the obligations to comply with Court orders. In these circumstances, I will draw an inference that a record of the meeting between Ms J and the Wife on 16 September 2014 was not taken by Ms J, and that there were in fact no file notes of this meeting or any records of the Wife being a former client of Sydney Legal House at all.
I am satisfied that the Financial Agreement was drawn up by Mr K upon receiving instructions from the Husband. I find that although the Wife was present during the meeting between Mr K and the Husband, the Wife made no contributions to the drawing up of the Financial Agreement. I do not accept the Husband’s evidence that the Wife was in a position to confirm his instructions to Mr K. It is most unlikely that the Wife was able to confirm, for example, the value of the former matrimonial home, the mortgage on the home or the values of the vehicles said to be the property of the Husband and the Wife respectively. The evidence before the Court is that other than a sworn valuation by a real estate agent, no documents were given to Mr K by the Husband in relation to the property of the parties at the time Mr K drafted the Financial Agreement.
I am satisfied that the original Financial Agreement was given to Ms J at the commencement of her meeting with the Wife on 16 September 2014.
I am satisfied that the meeting between Ms J and the Wife took place for around ten to 20 minutes and find that at the conclusion of the meeting the Husband paid the fees incurred for the meeting.
I find that the Husband was present during the course of the meeting between Ms J and the Wife. There is no logical reason for why the Husband would have been present at the commencement of the meeting, left the meeting and then returned at the end of the meeting. In my opinion, it is more probable than not that the Husband was present for the duration of the meeting between Ms J and the Wife.
Neither the Husband nor Ms J have given evidence that the Wife was provided a copy of the Financial Agreement after she signed it. I am therefore satisfied that the Wife was not given a copy of the Financial Agreement after she signed it at the offices of Sydney Legal House. I accept the Wife’s evidence that upon separation she was given documents by the Husband that she put in a bag and did not look at until she attended upon a solicitor following the institution of proceedings by the Husband in this Court in relation to the parenting arrangements for the children.
I find that the evidence before the Court is sufficient to throw into doubt the inference which can be drawn from Ms J’s statement attached to the Financial Agreement certifying that the Wife was given independent legal advice for the following reasons:
1)the arrangement for the Wife to be provided with legal advice was not independently made by the Wife. Rather, the Husband arranged for the Wife to attend on Ms J on the recommendation of Mr K, his solicitor, who drew up the Financial Agreement;
2)there is no record held by Sydney Legal House, the firm Ms J worked for when she met with the Wife, of the Wife as a client. The capacity in which Ms J acted on the 16 September 2014 is questionable;
3)Ms J received the Financial Agreement at the commencement of her meeting with the Wife and the meeting took no longer than 20 minutes. In my opinion, this was insufficient time for Ms J to have explained to the Wife, who had limited English speaking skills, the Wife’s rights under the relevant statute, the effects of the Financial Agreement on her rights and the advantages and disadvantages of the Financial Agreement. In Abrum & Abrum [2013] FamCA 897 (“Abrum & Abrum”), Aldridge J set out the obligations upon a legal practitioner purporting to give legal advice under s.90G(1)(b) of the Act (Abrum & Abrum at [35]-[45]). In my opinion, it would not have been possible for Ms J to have complied with these obligations in a time period of ten to 20 minutes;
4)the Husband was responsible for and paid the fee for the meeting between Ms J and the Wife;
5)the Husband was present for the duration of the meeting between Ms J and the Wife;
6)the absence of any file notes of the meeting support an inference that there was a lack of proper engagement by Ms J with the Wife, a lack of competent legal service and a lack of the provision of any legal advice at all.
Having regard to the evidence before me, I am not satisfied that the Wife received independent legal advice from a legal practitioner and am therefore not satisfied that the mandatory requirement under s.90G(1)(b) of the Act is met.
Consequently, I am not satisfied that the financial agreement made between the Husband and Wife on 16 September 2014 is a financial agreement that is binding for the purposes of s.90G(1) of the Act.
Would It Be Unjustified Or Inequitable If The Financial Agreement Was Not Binding On The Husband And The Wife?
In Hoult & Hoult, the Full Court of the Family Court of Australia, referring to an earlier Full Court decision in Parker & Parker [2012] FamCAFC 33 (“Parker & Parker”), said as follows (Hoult & Hoult at [288]-[291], [307], [309]-[310]):
288. The interpretation of s 90G(1A)(c) was considered by the Full Court in that case. We need not repeat Justice Thackray’s summaries of the three judgments given, but we agree that the most that can be gleaned from that decision is that first, the fact that a party has not received the prescribed legal advice does not alone render s 90G(1A) inapplicable, and second, it is authority for the proposition that the operation of the discretion in paragraph (c) is not confined to “technical” breaches. The trial judge here also adopted that interpretation and we find no error in that approach.
289. However, as identified by Justice Thackray, the decision in Parker provides no assistance in understanding what the discretion does entail, and in particular in identifying the factors to be taken into account in exercising the discretion. It is to these issues that this aspect of this appeal is directed.
290. The trial judge correctly identifies in paragraph 9 of his reasons for judgment that the plain words of s 90G(1A) “envisage a broad discretion vested in the Court in circumstances where the pre-conditions to the exercise of that discretion prescribed otherwise in s 90G(1A)(a) to (e) are established”.
His Honour continued, again correctly in our view, that “[o]nce that discretion is enlivened, nothing within the section suggests, in terms, any restriction on the matters that might inform it.”
291. We are also ad idem with the trial judge that “the Court is required to inquire into the facts and circumstances surrounding the agreement so as to arrive at a conclusion as to whether those facts and circumstances justify the Court exercising the discretion inherent in paragraph (c) of [s 90G(1A)]” (paragraph 8 reasons for judgment). We would only add the necessary rider that it is the facts and circumstances surrounding the making and performance of the agreement which are relevant…
(Emphasis in original)
…
307. We have referred to the fact that his Honour in paragraph 57 provided a range of factors that it would be appropriate to consider when exercising the discretion. The only factor that we suggest is not available is the last one, but if there is to be a list of factors identified we would prefer the following, all of which are to be found in his Honour’s reasons:
· The terms of the section, the nature of a Financial Agreement as a creature of the Act, and the place of Part VIIIA within the overall scheme of the Act.
· The nature and extent of the non-compliance with the requirements of s 90G(1).
· The facts and circumstances surrounding the making of the agreement including, in particular, if one of the parties has complied with all of the mandatory requirements necessary to render the agreement binding.
· How the parties have acted subsequently in relation to the agreement (bearing in mind that changes of circumstances cannot be considered).
…
309. Secondly, it is suggested that “[a]lthough the Act now undoubtedly allows parties to enter into bad or grossly unfair bargains, it is perfectly consistent for the legislation to permit consideration of the fairness of the bargain (judged at the date of execution) in cases where the safeguards ins 90G(1) have not been met”.
310. Again with the greatest of respect to his Honour we fail to see how that can be. The point of the legislation is to allow the parties to decide what bargain they will strike, and provided the agreement complies with the requirements of s 90G(1) they are bound by what they agree upon. Significantly, in reaching agreement, there is no requirement that they meet any of the considerations contained in s 79 of the Act, and they can literally make the worst bargain possible, but still be bound by it. Thus, again, rhetorically, how can the fairness of the bargain be an enquiry that the court can make when it is seized of a matter under s 90G(1A)? Furthermore, it is not the case that to fail to consider the fairness or injustice of the bargain does not mean that “the discretion is exercised in a vacuum”. The factors set out in paragraph 307 above will be those that are addressed.
In Raleigh & Raleigh [2015] FamCA 625 (“Raleigh & Raleigh”), Watts J said in relation to the Full Court of the Family Court of Australia’s observation at [310] in Hoult & Hoult that (Raleigh & Raleigh at [139]):
139. As the Full Court records in Wallace & Stelzer at [22]-[24], prior to the Matrimonial Causes Act 1959 (Cth), agreements which ousted the jurisdiction of the court to deal with financial matters were void as being against public policy. Section 87(1)(k) of the Matrimonial Causes Act and s 87 of the Family Law Act (which replaced the Matrimonial Causes Act in 1976) allowed the court to approve agreements that did oust the jurisdiction of the court. That approval involved careful judicial scrutiny of the terms of the agreement and the financial circumstances and history of the parties. When, in 2000, legislation was introduced for “private ordering” by agreements, which ousted the jurisdiction of the court (s 71A of the Act), s 90G (as well as s 90K and s 90KA) provided a check and balance. Yes, a party was free to make a bad bargain (or to use the words of the plurality in Hoult [310] “they can literally make the worst bargain possible”) but only if the parties are properly advised and do so with their eyes wide open.
I am not satisfied that it would be unjust and inequitable if the Financial Agreement were not binding on the Husband and the Wife for the following reasons:
1)the Wife was disadvantaged in negotiating the Financial Agreement by her limited English speaking and reading skills and by the fact that she was unassisted by an interpreter during her meeting with Ms J;
2)the Husband arranged the appointment for the Wife to attend upon a solicitor who was suggested by the Husband’s solicitor;
3)the Wife was under the misapprehension when the Husband arranged the appointments with his and the Wife’s respective solicitors that the Financial Agreement was a separation agreement required under Australian law;
4)the Financial Agreement was drafted by the Husband’s solicitor with no input from the Wife or the Wife’s solicitor. The Wife therefore did not negotiate the Financial Agreement. Although the Wife was present at the meeting between the Husband and his solicitor, I am satisfied that the Wife did not contribute to the discussions;
5)the Wife was not given an opportunity to read the Financial Agreement or have the Financial Agreement read or interpreted to her prior to signing the Financial Agreement;
6)aside from operating a home-based (omitted) business for (omitted) who only spoke the (omitted) language for a limited period of time, the Wife had not worked prior to signing the Financial Agreement. Until separation, the Wife was entirely dependent on the Husband. On the face of the Financial Agreement, it appears that the parties had separate financial accounts;
7)the Wife was not given a copy of the Financial Agreement after she signed it, nor was she aware that the Husband had given her a copy of the Financial Agreement when she left the former matrimonial home. The Wife was only aware she had a copy of the Financial Agreement and of its contents upon attending a solicitor to obtain legal advice regarding the Husband’s institution of proceedings in this Court for parenting orders in relation to the children;
8)the fact that the Wife was not given independent legal advice is a relevant fact and an important consideration in the exercise of my discretion.
I have taken into account that the Wife was paid $25,000 in accordance with the Financial Agreement. However, the fact that this payment complies with the Financial Agreement does not outweigh the considerations I have set out in [89] above.
Conclusion
For the reasons I have set out in this judgment, I shall make a declaration that the financial agreement made between the Husband and the Wife on 16 September 2014 is not a binding financial agreement within the meaning of s.90G of the Act.
Such a declaration will have the effect that the parties are not constrained by s.71A of the Act in relation to property proceedings and are therefore subject to threshold provisions in relation to the institution of proceedings (for example, s.44 of the Act provides that the parties may exercise any rights they may have under s.79 of the Act).
I certify that the preceding ninety-two (92) paragraphs are a true copy of the reasons for judgment of Judge Jones
Date: 1 February 2018
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