Raimo and Brogden

[2020] FamCA 536

FAMILY COURT OF AUSTRALIA

RAIMO & BROGDEN [2020] FamCA 536

FAMILY LAW – BINDING FINANCIAL AGREEMENT – Whether the parties’ marriage in France was a valid marriage – Where the marriage was not valid – Where the applicant contends the binding financial agreement should be set aside – Where no grounds were established to set aside the binding financial agreement – Application dismissed.

Family Law Act 1975 (Cth) ss 90UC, 90UJ, 90UJ 90UM

Derry v Peek (1889) 14 App Casa 337
Banditt v The Queen (2005) 224 CLR 262
Thorne v Kennedy (2017) 263 CLR 85

APPLICANT: Ms Raimo

RESPONDENT: Mr Brogden

FILE NUMBER: SYC 4121 of 2019

DATE DELIVERED: 3 July 2020

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGMENT OF: Stevenson J

HEARING DATE: 4-6 March 2020

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Gould

SOLICITOR FOR THE APPLICANT: Crawford Ryan Lawyers Pty Ltd

COUNSEL FOR THE RESPONDENT: Mr Jackson

SOLICITOR FOR THE RESPONDENT: Rivera Legal

Orders

1. That the Initiating Application filed 26 June 2019 is dismissed.

Note: The form of the order is subject to the entry of the order in the Court’s records.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Raimo & Brogden has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER: SYC 4121 of 2019

Ms Raimo

Applicant

And

Mr Brogden

Respondent

REASONS FOR JUDGMENT

The proceedings

1. Ms Raimo and Mr Brogden are parties to litigation in relation to financial issues arising from the breakdown of their seven-year relationship.  They began to live together in August 2013 and separated in February 2019.  On … June 2016 they participated in a ceremony in France, which was described as and bore some resemblance to a marriage.  It became clear from expert evidence received on 2 March 2020, however, that this ceremony was not a valid marriage.

2. The parties entered into two Financial Agreements, the first dated February 2014 and the second 3 March 2016.  The applicant, Ms Raimo, ("the applicant") sought orders to set aside these two financial agreements.  The respondent, Mr Brogden, ("the respondent") sought orders for enforcement of the agreement of 3 March 2016.

3. Both of these agreements were expressed to be entered into by the parties pursuant to section 90UC of the Family Law Act 1975 (Cth) ("the Act"). This section is entitled "Financial Agreements during a de facto relationship". In each case Recital J provided that, if the parties married subsequently, the agreement would cease to be binding in accordance with section 90UJ of the Act.

4. Section 90UJ was relevant to the proceedings until the eve of the trial, which commenced on 4 March 2020. As noted, the parties engaged in a ceremony in France which was organised by a wedding planning company. During this ceremony, the words "husband", "wife" and "marriage" were used by the parties and the celebrant. The parties exchanged rings and were issued with a document in English entitled "Certificate of Marriage". The words "this is not a legal document" appeared in very small print at the bottom left-hand corner of this "Certificate".

5. The applicant had contended that the parties entered into a valid marriage on … June 2016 and thus each of the two agreements ceased to be binding as a consequence.  The respondent contended that the parties had a “very romantic time in France" but did not enter into a valid marriage.

6. This issue was put to rest by expert evidence from a French lawyer, Mr F, who provided a report dated 28 February 2020.  Mr F set out an analysis of the conditions for a valid marriage ceremony in France, none of which were fulfilled in the present case.  His conclusion was as follows:

   A.The marriage celebration of the Parties that took place at the location in France is not a valid marriage under French law.  The failure for the Parties to have complied with the formalities that are required under the French Civil Code makes the marriage celebration at the location invalid under French law.

   B.Exhibit N is not a marriage certificate under French law.

7. Accordingly, the applicant abandoned her contention that the financial agreements of February 2014 and 3 March 2016 were rendered invalid by the provisions of section 90UJ(3) of the Act.  Her case then appeared essentially to be as follows:

   1.the respondent's conduct was such that it would be unconscionable for him to rely upon a "technicality" and that he should be estopped from denying the validity of a marriage

   2.the 2014 Financial Agreement was not properly terminated within the requirements of section 90UL

   3.both agreements should be set aside for want of compliance with the technical requirements of section 90UJ

   4.either or both of the agreements should be set aside pursuant to section 90UM(1)(a), in that the respondent failed to make disclosure of his interest in a trust and hence the agreement/s was or were obtained by fraud

   5.either or both agreements should be set aside as void, voidable or unenforceable for the purposes of section 90UM(e)

   6.either or both agreements should be set aside on the basis that the respondent engaged in unconscionable conduct for the purposes of section 90UM(h).

Background

1. The applicant and the respondent, who are aged 40 and 43 respectively, began a relationship in 2012 and commenced cohabitation in August 2013.  On 29 January 2019 the respondent gave notice by email and text message to the applicant that he required her to vacate the family home, in accordance with clause 4(d) of the agreement dated 3 March 2016.  The applicant and her two children moved out of the home on 22 February 2019.

2. Prior to the relationship of the parties, the respondent was married to Ms Brogden.  They have two children, B and C, who are currently about 12 and 11 years of age.  The respondent and his ex-wife engaged in acrimonious litigation after the breakdown of their marriage.

3. The applicant had been married twice prior to the relationship of the parties.  She has two children, D and E, whose father is her ex-husband Mr Raimo.  D and E are approximately 12 and 9 years of age.  They lived with the parties during their relationship and spent regular time with their father.

4. The applicant had reached a financial settlement with her ex-husband Mr Raimo when the parties commenced cohabitation.  They entered into consent orders on 25 July 2013, pursuant to which the applicant received a lump sum of $400,000 and the benefit of a superannuation splitting order of $75,000.

5. Annexure B to the 2014 agreement set out the assets of the applicant as follows:

1.     Superannuation	$100,000.00
2.     Cash at Bank in term deposit account with ANZ Bank	$300,000.00
3.     Furniture (specify)	$10,000.00
4.     Motor Vehicle 1	$ 50,000.00

There was no reference to any liability of the applicant.

1. In January 2014 the respondent purchased in his sole name the property G Street, Suburb H.  Annexure A to the February 2014 financial agreement listed the assets and liabilities of the respondent as follows:

1.        G Street, Suburb H NSW being the whole the land contained in Folio Identifier …	$1,750,000.00
2.        Shares in J Pty Limited ACN …	$1,600,000.00
3.        The whole of the business known as ‘K’ owned by K Pty Limited ACN …	$500,000.00
4.        The whole of the business known as ‘L Pty Limited’ owned by Mr Brogden and/or K Pty Limited A.C.N …	$0
5.        Superannuation	$70,000.00
6.        Cash at Bank in Account Nos …61, …27, …61 and term deposit …71 with the Commonwealth Bank of Australia	$135,000.00
7.        Motor Vehicle 2	$50,000.00
Total assets	$4,105,000.00
Liabilities of Mr Brogden
1.         Mortgage G Street, Suburb H NSW	$1,193,000.00
2.        Mortgage M Street owned by J Pty Limited	$1,040,000.00
3.        Loan against Motor Vehicle 2	$18,000.00
Total liabilities
Total net assets of Mr Brogden	$2,251,000.00

1. The applicant is a therapist and the respondent an allied health professional.  The applicant maintained that she worked in the respondent's business during the relationship and was paid a maximum of $200 per week.  The respondent agreed that the applicant undertook some work in his business as a sub-contractor.  He contended that she was paid $30 per hour for this work and received a total in excess of $200 per week.

2. The parties established a business in a commercial property owned by the respondent's family trust known as J Trust.  The applicant contended, and the respondent disputed, that she spent approximately $10,000 from her property settlement funds to establish this business.

3. The applicant maintained that she applied her property settlement money to day- to-day living expenses and holidays for the respondent and their family unit.  She gave uncontradicted evidence that she had spent all of her property settlement funds by the time of the parties' separation.

4. The respondent maintained that he wished to "update" the 2014 agreement after the parties had lived together for two years.  The applicant contended, and the respondent denied, that he asked for a new agreement because the parties intended to marry each other.  The respondent denied that he said to the applicant that a new agreement was required because of an impending marriage.

5. The applicant alleged that the respondent directed angry abuse at her in the period leading up the execution of both agreements.  She contended that, in relation to the 2014 agreement, the respondent said to her "if you don't sign it, you can get out."  In relation to the 2016 agreement, she deposed that he said "if you don't sign it, we won't get married".  The respondent denied that he made any such statements to the applicant or that he directed verbal abuse at her.

6. The applicant deposed that the respondent presented her with a diamond ring and asked her to marry him during a holiday in the United States in 2014.  The respondent denied that he ever proposed marriage to the applicant and maintained that he gave her "a commitment ring".  The applicant deposed, and the respondent did not deny, that she gave him a "commitment ring" prior to the trip to the United States.

7. It appeared to be common ground that, after the US event, the parties discussed a plan to marry in Bali.  There was a dispute as to whether there was any discussion between them about a wedding in France.

8. The parties entered into a second Financial Agreement on 3 March 2016.  Annexure A listed the assets and liabilities of the respondent as follows:

Assets of Mr Brogden	Agreed Estimated Value
1.      G Street Suburb H NSW being the whole the land contained in Folio Identifier …)	$2,450,000.00
2.      Shares in J Pty Limited ACN …	$2,300,000.00
3.      The whole of the business known as 'L Pty Limited' owned by Mr Brogden and/or K Pty Limited A.C.N …	$1,000,000.00
4.     Superannuation	$80,000.00
5.      Cash at Bank in Account Nos. …161, …627, …861 and Term Deposit …671 with the Commonwealth Bank of Australia	$85,000.00
6.     Motor Vehicle 2	$70,000.00
Total Assets:	$5,985,000.00
Liabilities of Mr Brogden	Agreed estimated value
1.      Mortgage G Street, Suburb H NSW	$1,098,825.00
2.      Mortgage M Street owned by J Pty Limited	$1,040,000.00
3.      Loan against Motor Vehicle 2	$35,000.00
Total Liabilities	$2,173,825.00
Total Net Assets of Mr Brogden	$3,811,175.00

1. Annexure B to the financial agreement of 3 March 2016 listed the assets and liabilities of the applicant as follows:

Assets of Ms Raimo	Agreed Estimated Value
1.      Superannuation	$100,000.00
2.      Cash at Bank with ANZ Bank	$150,000.00
3.      Jewellery (specify)	$7,500.00
4.     Furniture (specify)	$10,000.00
5.      Motor Vehicle 1	$45,000.00
Total Assets:	$312,500.00
Liabilities of Ms Raimo	Agreed estimated value
1.
2.
3.
4.
5.
6.
Total Liabilities	Nil
Total Net Assets of Ms Raimo	$312,500.00

1. In support of her contention that the respondent subjected her to family violence during the relationship, the applicant relied on documents produced by the New South Wales Police Force (Exhibit 8).  This allegation of family violence was an element of her case that she entered into one or both of the Financial Agreements due to unconscionable conduct and/or undue influence on the part of the respondent.  I will consider the relevance of these police documents below in these reasons.

2. On 21 February 2020 the respondent caused a Statement of Claim to be issued by the company K Pty Ltd against the applicant (Exhibit 1).  The company sought an order that the applicant return a laptop computer and pay its costs.  The respondent caused this Statement of Claim to be served upon the applicant at her workplace.  The applicant claimed that she was embarrassed and upset and that she considered this service in her workplace as a form of harassment by the respondent.

3. The applicant wrongfully received social security benefits throughout the relationship of the parties.  She claimed, and the respondent denied, that he was aware of and encouraged her to continue to claim these benefits.  This issue is not apposite to the outcome of the proceedings but, on balance, I prefer the evidence of the applicant.  It seems to me to be inherently unlikely that the respondent was at all times unaware of an income stream into the household of the parties.

Consideration

1. I will consider in turn each of the elements of the applicant's case as outlined above in these reasons.  Some aspects of the evidence are relevant to more than one of these suggested grounds for setting aside the agreement/s.

1. The Respondent should be "estopped" from denying the validity of the marriage

1. This submission can be disposed of shortly. There was unchallenged and uncontradicted expert evidence to the effect that the ceremony in France on … June 2016 was not a valid marriage. For the purposes of section 90UJ(3) of the Act, the state of mind or belief of either of the parties as to the existence of a valid marriage is an irrelevant consideration.

1. The 2014 agreement was not properly terminated within the requirements of section 90UL

1. I was taken to no evidence referring to this issue. No submissions were put on behalf of the applicant which related to the valid termination of the 2014 financial agreement.

1. The 2014 agreement should be set aside for lack of compliance with section 90UJ

1. The only evidence relied upon by the applicant as to non-compliance with section 90UJ in relation to the 2014 agreement consisted of two paragraphs in her affidavit of 22 November 2019. She deposed:

   28.I have examined the file held by Crawford Ryan Lawyers with respect to the Financial Agreement which was prepared in 2014 and say that there is no record in Crawford Ryan Lawyer’s file of receiving the Agreement, accompanied by a Certificate signed by Mr Brogden's legal representative as to the provision of advice prior to entering into the Agreement.

2. This statement goes no further than hearsay or a conclusion on the part of the applicant. The entire file of Crawford Ryan was available at the trial but only selected documents were tendered in evidence. I find that this evidence of the applicant is insufficient to establish a lack of compliance with the technical requirements of section 90UJ in respect of the 2014 agreement. Accordingly, the 2014 agreement cannot be set aside on this basis.

3. In her affidavit of 22 November 2019 the applicant deposed further:

   29.I have been informed and accept that a search has been undertaken of incoming email correspondence or other correspondence from 12 March 2014 onwards and there is no record of an email being received from [N Lawyers], until 2016 by Crawford Ryan Lawyers.  I have not received a copy of the Agreement signed by Mr Brogden nor a Certificate confirming that he had received certain advice before entering into the Agreement.  In the letter from Crawford Ryan Lawyers to [N Lawyers], dated 12 March 2014, they request the provision of a copy of the Agreement, together with a receipt and informing that I would sign a receipt once the document was received back from [N Lawyers].  I am informed and accept that no document was forwarded by [N Lawyers] to my Solicitors and indeed, I have no recollection of signing a receipt of the document signed by Mr Brogden.

4. This evidence must be hearsay and/or a series of conclusions on the part of the applicant.  I am satisfied that this evidence cannot constitute a basis for the setting aside the 2014 agreement.  For clarity, I am satisfied that these two paragraphs of the applicant's affidavit taken together cannot constitute a basis for the setting aside of the 2014 agreement.  Notably, this suggested limb of the applicant's case was not advanced to any significant extent in final submissions on her behalf.

5. A copy of the agreement of 3 March 2016, apparently signed by the respondent and his solicitor, was exhibited to his affidavit sworn on 20 September 2019.  The respondent's solicitor signed a certificate of independent legal advice in the same document.

6. Neither party tendered in evidence a copy of the agreement signed by the applicant, nor a certificate of independent legal advice by her solicitor.  The applicant's written evidence in relation to the execution of the 2016 agreement was difficult to reconcile with solicitors' correspondence exhibited to her affidavit.  The applicant deposed:

   37.I would confirm that I instructed my solicitors that I wanted to sign the Agreement and have it forwarded to N Lawyers as quickly as possible as I was fearful of dealing with Mr Brogden's repeated enquiry as to my signature of the Agreement and his ongoing aggravation that I had not signed the document.

   38.After forwarding the Agreement, my solicitors received a letter dated 3 March 2016 from [N Lawyers] and a copy of that letter is exhibited Exhibit "I".  The Agreement which was returned did not bear my signature, nor was the Certificate of Advice provided by my solicitor attached to it.

   39.At no time prior to entering into the second Agreement in 2016 was there disclosure as to Mr Brogden's financial position by way of provision of documents or a signed Financial Statement.  I did not instruct my solicitors to make such enquiries as I was fearful of Mr Brogden's response if I had done so.

   40.After the receipt of the letter from [N Lawyers] dated 3 March 2016, I did not provide my solicitors with any further instructions with respect to the provision of an incomplete Agreement in circumstances where Mr Brogden had ceased harassing me as to my signature of the Agreement.  I did not provide a receipt acknowledging I had received a copy of the Financial Agreement.

7. In a letter dated 12 February 2016, the applicant's solicitor wrote inter alia to the respondent's lawyer as follows:

   Enclosed with this correspondence is the financial agreement pursuant to Section 90UC, which you had submitted to us, so that we might obtain instructions from our client and which is now executed.

   We have provided a letter of advice to our client.

   Of concern is that the Agreement does not properly terminate the previous Agreement.

   We have been instructed by our client that she was anxious to sign the Agreement and have us forward it to you.

   You will note that the writer has executed the Statement pursuant to Section 90UJ(1) of the Family Law Act.

   Subject to you receiving further instructions, would you please obtain instructions from your client and if he elects to sign the Agreement, would you please provide us with a copy of the Agreement together with the Statement of Advice.

   It has become customary for parties to exchange receipts acknowledging that they have each received a copy of the Agreement and we would be grateful if you would provide us with a receipt from your client acknowledging that he holds the Agreement and Statement of Advice, as well as providing a document which our client can execute when we receive a copy of the Agreement and Statement of Advice.

1. On 3 March 2016 the respondent's lawyer wrote inter alia to the applicant's solicitor as follows:

   We refer to your letter of 12 February 2016 from which we note that:

   ·Ms Raimo has signed the binding financial agreement forwarded to you on 5 February 2016 ("the Agreement");

   ·On 11 February 2016, David Leslie Crawford provided your certificate of independent legal advice in relation to the Agreement; and

   ·Both the Agreement and the annexures have all been signed by both Ms Raimo and by David Leslie Crawford.

   A counterpart has now been signed by Mr Brogden in duplicate and we have provided him with independent legal advice in relation to it and the writer has provided the usual certificate to that effect.

   The Agreement signed by Mr Brogden and the writer is dated today and enclosed, together with a signed acknowledgement as requested in your letter.

2. In these circumstances, it seems to me that section 90UJ(1A)(c) would operate to render the agreement of 3 March 2016 binding upon the parties albeit that the evidence did not establish strict compliance with the requirements of section 90UJ. It seems clear that both parties intended to enter into a Binding Financial Agreement, with the benefit of appropriate legal advice. In my view it would be unjust and inequitable, for the purposes of section 90UJ(1A)(c), if the agreement were not binding upon the parties.

1. The respondent failed to disclose his interest in a trust, thus the agreement of the applicant to both the 2014 and 2016 agreements was obtained by fraud for the purposes of section 90UM(1)(a)

1. Section 90UM(1)(a) provides as follows:

   90UM Circumstances in which court may set aside a financial agreement or termination agreement

   (1)A court may make an order setting aside, for the purposes of this Act, a Part VIIIAB financial agreement or a Part VIIIAB termination agreement if, and only if, the court is satisfied that:

   (a)the agreement was obtained by fraud (including non‑disclosure of a material matter);

   ...

2. The respondent provided copies of Deeds of Trust to the applicant and her lawyers for the first time during the trial (Exhibit 6).  The first deed established a trust named K Trust.  The respondent was the appointor and the trustee of a company known as "[J] Pty Limited".  The specific beneficiaries were the respondent and his then wife, Ms Brogden.

3. A company search dated 29 May 2019, exhibited to the affidavit of the applicant, showed that the respondent was the sole director and shareholder of the company J Pty Limited as at that date.  The respondent and his ex-wife previously had been directors and shareholders.  The respondent's ex-wife ceased to hold one ordinary share in the company and resigned as a director on 12 January 2015.  Presumably, the respondent's former wife transferred her interest in this trust to him as the component of their property settlement.

4. On 20 May 2005 the respondent and J Pty Ltd entered into a Deed of Trust.  Recital A to this deed recorded that the company J Pty Ltd was the current trustee of a trust known as K Trust.  An undated deed changed the name of this entity to O Trust.

5. Annexure A to the 2014 agreement set out the assets and liabilities of the respondent.  These assets included "shares in J Pty Ltd" at a value of $1,600,000.  The list of assets also included "the whole of the business known as K owned by K Pty Limited" and "the whole of the business known as L Pty Limited owned by Mr Brogden and/or K Pty Limited", at values of $500,000 and nil respectively.

6. Annexure A to the 2016 agreement listed as assets of the respondent "shares in J Pty Limited" and "the whole of the business known as ‘L Pty Limited’ owned by Mr Brogden and/or K Pty Limited" at values of $2,300,000 and $1,000,000 respectively.  The respondent accordingly disclosed his shareholding in J Pty Ltd in both agreements.

7. The applicant caused no further enquiries to be made in relation to the company J Pty Ltd in either 2014 or 2016.  It was always open to her to seek clarification in relation to this company but she elected not to do so.  Her solicitors advised her to cause further enquiries into the respondent's corporate entities and financial position in both 2014 and 2016.

8. In a letter to the applicant dated 4 March 2014, her solicitors wrote inter alia:

   We strongly recommend that you are fully aware of Mr Brogden's financial position, including his income and details of his assets ...

   This letter stated further:

   It would also be beneficial for you to instruct us to perform ASIC searches with the companies that Mr Brogden lists in his schedule, being both J Pty Ltd and K Pty Ltd.

9. The applicant's solicitors provided similar advice to her in relation to the 2016 agreement.  In a letter dated 11 February 2016, the applicant's lawyers set out detailed advice in relation to proper financial disclosure by the respondent.

10. In the well-known authority of Derry v Peek (1889) 14 App Casa 337 at 374, Lord Herschell said as follows:

    ... [Fraud] is proved when it is shewn that a false representation is being made (1) knowingly, or (2) without belief in its truth, or (3) recklessly, careless whether it be true or false.  Although I have treated the second and third as distinct cases, I think the third is but an instance of the second, for one who makes a statement under such circumstances can have no real belief in the truth of what he states.  To prevent a false statement being fraudulent, there must, I think, always be an honest belief in its truth.  And this probably covers the whole ground, for one who knowingly alleges that which is false, has obviously no such honest belief.

11. In Banditt v The Queen (2005) 224 CLR 262, Gummow, Hayne and Heydon JJ said as follows:

    ... to sustain an action in deceit, fraud is proved when it is shown "that a false representation has been made (1) knowingly, or (2) without belief in its truth, or (3) recklessly, careless whether it be true or false."  But (3) is an instance of (2) ...

12. It is trite but true to say that an allegation of fraud is a serious matter and should not be made lightly.  In the present case, the reality is that the respondent effectively disclosed the assets of the trust in both 2014 and 2016.  I see nothing inherently unlikely or unbelievable in his evidence that he relied upon the advice of his accountant in completing the schedule of his assets and liabilities on both occasions.  Experience indicates that the use of family trusts is a common financial planning device utilised by small business proprietors, as was the case with the respondent.

13. I am not satisfied that the respondent failed to disclose a material matter in his schedule of assets and liabilities in either 2014 or 2016.  I am not satisfied that the applicant established any other basis upon which either or both agreement/s should be set aside pursuant to section 90UM(1)(a).

1. Either or both agreements should be set aside as void, voidable or unenforceable pursuant to section 90UM(e)

1. The Outline of Case document submitted on behalf of the applicant read inter alia:

   7.... s90UM(1)(e) makes reference to an agreement being void, voidable or unenforceable and, subject to the admission of certain evidence, it may be argued on behalf of the Wife that the agreement falls into this category.

   The foreshadowed evidence to justify the setting aside of the agreement/s was not identified at any stage of the trial.

2. The final submissions on behalf of the applicant made reference to section 90UM(1)(e) but did not identify any basis for the setting aside of either agreement pursuant to this subsection.  For these reasons, I conclude that the applicant failed to make out a case for the setting aside of either agreement pursuant to section 90UM(1)(e).

1. Either or both agreements should be set aside pursuant to section 90UM(1)(h) on the basis that the respondent engaged in unconscionable conduct

1. Section 90UM(1)(h) provides as follows:

   90UM Circumstances in which court may set aside a financial agreement or termination agreement

   (1)A court may make an order setting aside, for the purposes of this Act, a Part VIIIAB financial agreement or a Part VIIIAB termination agreement if, and only if, the court is satisfied that:

   ...

   (h)in respect of the making of a Part VIIIAB financial agreement—a party to the agreement engaged in conduct that was, in all the circumstances, unconscionable; or

2. In Thorne v Kennedy (2017) 263 CLR 85 at 99-102 the plurality of the High Court of Australia (Kiefel CJ, Bell, Gageler, Keane and Edelman JJ) said:

   Undue influence

   [30]     In Allcard, Lindley LJ said that "no Court has ever attempted to define undue influence".  One reason for the difficulty of defining undue influence is that the label "undue influence" has been used to mean different things.  It has been used to include abuse of confidence, misrepresentation, and the pressure which amounts to common law duress.  Each of those concepts is better seen as distinct.  Nevertheless, the boundaries, particularly between undue influence and duress, are blurred.  One reason why there is no clear distinction is that undue influence can arise from widely different sources, one of which is excessive pressure.  Importantly, however, since pressure is only one of the many sources for the influence that one person can have over another, it is not necessary that the pressure which contributes to a conclusion of undue influence be characterised as illegitimate or improper.

   ...

   [32]     The question whether a person's act is "free" requires consideration of the extent to which the person was constrained in assessing alternatives and deciding between them.  Pressure can deprive a person of free choice in this sense where it causes the person substantially to subordinate his or her will to that of the other party.  It is not necessary for a conclusion that a person's free will has been substantially subordinated to find that the party seeking relief was reduced entirely to an automation or that the person became a "mere channel through which the will of the defendant operated".  Questions of degree are involved.  But, at the very least, the judgmental capacity of the party seeking relief must be "markedly sub-standard" as a result of the effect upon the person's mind of the will of another.

   ...

   [34]     There are different ways to prove the existence of undue influence.  One method of proof is by direct evidence of the circumstances of the particular transaction.  That was the approach relied upon by the primary judge in this case.  Another way in which undue influence can be proved is by presumption.  This presumption was relied upon by Ms Thorne in this Court as an alternative.  A presumption, in the sense used here, arises where common experience is that the existence of one fact means that another fact also exists.  Common experience gives rise to a presumption that a transaction was not the exercise of a person's free will if (i) the person is proved to be in a particular relationship, and (ii) the transaction is one, commonly involving a "substantial benefit" to another, which cannot be explained by "ordinary motives", or "is not readily explicable by the relationship of the parties".  Although the classes are not closed, in Johnson Latham CJ described the relationships that could give rise to the presumption as including a parent and child, guardian and ward, trustee and beneficiary, solicitor and client, physician and patient, and cases of religious influence.  Outside recognised categories, the presumption can also be raised by proof that the history of the particular relationship involved one party occupying a similar position of ascendency or influence, and the other a corresponding position of dependency or trust.  In either case, the presumption is rebuttable by the other party proving that the particular transaction or transfer, in its particular circumstances, was nevertheless the result of the weaker party's free will.

3. In Thorne v Kennedy at 103 their Honours said further:

   Unconscionable conduct

   ...

   [38]     A conclusion of unconscionable conduct requires the innocent party to be subject to a special disadvantage "which seriously affects the ability of the innocent party to make a judgment as to [the innocent party's] own best interests".  The other party must also unconscientiously take advantage of that special disadvantage.  This has been variously described as requiring "victimisation", "unconscientious conduct", or "exploitation".  Before there can be a finding of unconscientious taking of advantage, it is also generally necessary that the other party knew or ought to have known of the existence and effect of the special disadvantage.

4. The applicant deposed as follows in relation to her execution of the 2014 agreement:

   18.Shortly after Mr Brogden and I commenced living at G Street, Suburb H, Mr Brogden said to me words to the effect of

   "I need you to sign a document."

   to which I replied

   "What about?"

   to which he said,

   "So that everything I've worked for stays mine"

   I said "OK."

   At this stage I did not disagree with Mr Brogden or argue with him.

   ...

   22.It is my recollection that during the period between when Crawford Ryan Lawyers received the agreement from Mr Brogden's lawyers until I signed the Agreement that Mr Brogden would repeatedly say to me "Have you signed that Agreement yet?" 

   Mr Brogden became increasingly agitated when he would enquire of me as to whether I had signed the Agreement.  He started shouting at me at various times and he used offensive language, such as

   "You're a cunt"

   And

   "You're a fuckwit"

   And

   "You're trying to fuck me over"

   And

   “Are you trying to do something to me.” 

   Mr Brogden would also say to me "If you don't sign it you can get out".

   23.At that stage we had newly moved into the premises at G Street, Suburb H and I had spent money acquiring furniture and working at improving the premises by interior decoration.  Both D and E had settled into their new home.  I did not wish to have to move and find alternative accommodation."

5. In cross-examination the applicant gave evidence to the following effect in relation to the 2014 agreement:

   "I had no fears of [the respondent] at that time"

   "I did not fear signing the first agreement.  I was fearful that if I did not sign, he would tell me to get out."

   The applicant stated:

   "[The respondent] also said "we are both out of divorces so it makes sense that we have a cohabitation agreement.  And I said "Okay".

6. The applicant said that she chose her lawyer for the agreement and that the respondent "told" her to "see Crawford Ryan".  This firm had acted for her in relation to her separation from Mr Raimo.  The applicant said that she made her own appointments with them in 2014 and 2016 and that she was never accompanied by the respondent.

7. The applicant deposed as follows in relation to her execution of the 2016 agreement:

   31.In early 2016 Mr Brogden became agitated after appearing to search through his paperwork.  He raised his voice and was shouting at me words to the effect of:

   "What have you done with the papers?  You've stolen it."

   I did not know what he was referring to and he would not tell me.

   32.Shortly thereafter Mr Brogden said to me words to the effect of:

   "We need to upgrade the agreement.  Things have changed.  We are getting married."

   I said:

   "Really?  Are we going to go through this again?"

   to which Mr Brogden replied:

   "If you don't sign it, we won't get married."

   ....

   35.At about this time, Mr Brogden repeatedly said to me:

   "Have you signed the Agreement?"

   I said to Mr Brogden words to the effect of:

   "I'm waiting on my solicitors."

   Mr Brogden became increasingly angry and kept saying:

   "What's the hold up?"

   Mr Brogden kept making enquiry of me and became increasingly angry when I could not inform him that I had signed the Agreement.  He said words to me such as:

   "I don't trust you."

   or

   "What are you up to?"

   Mr Brogden would say words such as:

   "Why haven't you signed it?"

   and would then act out by slamming doors about the house and walk about the house in an agitated manner shouting.  Amongst the words he shouted:

   "Why won't you fucking sign it?"

   ...

   37.I would confirm that I instructed my solicitors that I wanted to sign the Agreement and have it forwarded to N Lawyers as quickly as possible as I was fearful of dealing with Mr Brogden's repeated enquiry as to my signature of the Agreement and his ongoing aggravation that I had not signed the document."

8. The applicant contended that this conduct of the respondent occurred within a history of family violence directed at her.

9. She alleged that the respondent began to subject her to family violence after they moved into the home in G Street, Suburb H.  She deposed that he shouted and swore at her, on occasions in the presence of her children.  She alleged that he pushed her, causing her to fall over three times and to tumble down the stairs on one occasion.

10. The respondent denied all of these allegations and suggested in cross- examination that the applicant was the aggressor in their confrontations.  Some of these denials appear to sit uncomfortably with the contents of police documents produced on subpoena and tendered in evidence (Exhibit 8).

11. The applicant deposed that police officers attended their home on at least three occasions, in response to calls by neighbours.  The respondent deposed that he recalled two occasions when police officers attended the home in approximately August 2018.  He maintained that the officers left the premises without taking any action.

12. A COPS entry dated 11 March 2016 described a police attendance at the home as a result of an anonymous report of an argument between the parties about "a prenuptial agreement prior to getting married".  This report stated that neither party was fearful for his or her safety.

13. A COPS entry dated 2 July 2018 described a report of "extremely heated voices" at the home of the parties from an unidentified caller.  No police action was taken and each of the parties blamed the ex-wife of the respondent for repeated reports to police.

14. Exhibit 8 contains several references to incidents between the respondent and his ex-wife and COPS entries dating back to 2007, both of which I consider to be irrelevant for present purposes.  It is certainly the case that some of these COPS entries describe aggressive and ugly conduct on the part of the respondent toward other people.

15. Notably, the contents of these COPS entries were untested and not put to the respondent. In my view, it would be inappropriate that an inference be drawn from these police records that the respondent has a propensity to act aggressively toward others and thus is likely to have subjected the applicant to family violence. 

16. It seems to me that no finding can be made safely, to the effect that the respondent subjected the applicant to family violence.  There was no evidence that she ever complained to a third party about his alleged treatment of her, although corroboration is not a necessary component of a finding of family violence.  The applicant called evidence from several witnesses, all of whom described her happiness in the period leading to and following the ceremony in France in 2016.

17. During her oral evidence the applicant stated several times that she loved the respondent and wanted to spend her life with him.  The applicant seemed to have a clear wish to marry the respondent.  She relied in part on his alleged statement "If you don't sign it, we won't get married" as an element of her case of undue influence and/or unconscionable conduct.  The applicant said also that she "trusted him at the time" when she entered into both agreements.

18. It is noteworthy, however, that each of the two agreements expressly stated that the parties were contracting with each other pursuant to section 90UC, which applies to "parties to a de facto relationship". I accept the submission on behalf of the respondent to the effect that the 2016 agreement at least would have been entered into pursuant to section 90B, if a subsequent marriage had been their intention. The applicant stated in cross-examination that she was unaware that a subsequent marriage would mean that the 2016 agreement would cease to have effect.

1. It seems to me to be more probable than not that the parties did discuss marriage at various times during their relationship. It also appears to me to be more probable than not that the respondent encouraged the applicant to believe that the parties would enter into a ceremony of marriage. I consider, however, that the prospects of marriage do not assist the applicant's case for setting aside the agreements pursuant to section 90UM(1)(h).

2. There was no evidence of an extant plan for the parties to marry, which the respondent threatened to abandon if the applicant failed to sign a Financial Agreement. There was no evidence of a particular disadvantage which would be suffered by the applicant, if the respondent reneged on a plan for marriage. The parties had lived in a de facto relationship prior to the execution of both agreements which, as noted, were entered into pursuant to section 90UC. Notably, the 2016 agreement was stated to be entered into pursuant to section 90UC rather than section 90B.

3. The applicant alleged that the respondent said to her, prior to the execution of the 2014 agreement "If you don't sign it you can get out".  The applicant relied upon this alleged threat, which was denied by the respondent, as an element of her case of undue influence and/or unconscionable conduct.

4. At the time of execution of the 2014 agreement, the applicant had approximately $300,000 in cash.  It seems to me, therefore, that she had a realistic choice as to whether she entered into the agreement or established her own accommodation.  Similarly, she had some $150,000 in cash at the time of the 2016 agreement and could have rented her own accommodation.

5. The applicant's solicitors advised her, in a letter dated 4 March 2014, that "there is no real advantage to you in entering into the agreement as proposed by Mr Brogden."

6. There is no doubt that the applicant's solicitors advised her not to enter into the 2016 agreement.  In a letter dated 11 February 2016 the applicant's solicitors advised her "We confirm that there is no advantage to you in entering into the agreement as proposed by Mr Brogden."  The applicant's solicitors concluded their letter to her by stating:

   We would ask you to carefully consider your position and make such enquiry as you may wish with respect to the Agreements both past and proposed before entering into such Agreement which we must reiterate is against your interest.

   The applicant signed a copy of this letter, which included a handwritten statement "I acknowledge I have read and understood the within letter and wish to sign the financial agreement notwithstanding advice received to the contrary."

7. In Thorne v Kennedy, Gordon J said inter alia (at p 586):

   [103]The critical element for relief on the ground of undue influence is the impairment of the will of Ms Thorne.  Undue influence does not protect against bad deals.  Here, the equitable jurisdiction will be engaged if entry into the agreements was "the outcome of such an actual influence over the mind of [Ms Thorne] that it cannot be considered [her] free act" (emphasis added).  Put another way, when Ms Thorne signed the agreements, was her capacity to make independent judgments impaired so that she was not acting in the free exercise of her independent and voluntary will?

8. Gordon J said also (at p 589):

   [115]Although the doctrine of unconscionable conduct bears some resemblance to the doctrine of undue influence, there is an important difference between the two doctrines.  As Mason J explained in Amadio, that difference concerns the will of the innocent party.  For unconscionable conduct, "the will of the innocent party, even if independent and voluntary, is the result of the disadvantageous position in which [the innocent party] is placed and of the other party unconscientiously taking advantage of that position".  By contrast, for undue influence, "the will of the innocent party is not independent and voluntary because it is overborne.

9. I have no doubt that the applicant entered into a "bad deal" in both 2014 and 2016. She did so against competent and thorough legal advice. I can identify no proper basis for a finding that her entry into either agreement was anything other than an act of "the free exercise of her own independent and voluntary will." I can identify no proper basis for a finding that the respondent unconscientiously took advantage of a disadvantageous position of the applicant, when she entered into either or both agreements. In these circumstances, it seems to me and I find that the applicant failed to establish that either or both agreements should be set aside pursuant to section 90UM(1)(h) of the Act.

Conclusion

1. I am thus obliged to dismiss the Initiating Application of the applicant filed on 26 June 2019.  I see no necessity for a declaration that the agreement of 3 March 2016 is binding upon the parties.  I decline to make an order in terms of paragraph 3 of the Response, which is so loosely worded as to be unenforceable in any sense.

I certify that the preceding eighty (80) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Stevenson delivered on 3 July 2020.

Associate: 

Date:  3 July 2020