Renard and Geach
[2013] FCCA 617
•5 July 2013
FEDERAL CIRCUIT COURT OF AUSTRALIA
| RENARD & GEACH | [2013] FCCA 617 |
| Catchwords: FAMILY LAW – Financial agreements– independent legal advice. |
| Legislation: Family Law Act 1975, s.90G |
| Ruane & Bachmann-Ruane [2009] FamCA 1101 Parker & Parker [2012] FamCAFC 33 Senior & Anderson [2011] FamCAFC 129(2011) FLC 93-470 Hoult & Hoult [2011] FamCA 1023; [2011] FLC 93-489 |
| Applicant: | MR RENARD |
| Respondent: | MS GEACH |
| File Number: | MLC 6887 of 2012 |
| Judgment of: | Judge Small |
| Hearing dates: | 9 & 13 May 2013 |
| Date of Last Submission: | 13 May 2013 |
| Delivered at: | Melbourne |
| Delivered on: | 5 July 2013 |
REPRESENTATION
| Counsel for the Applicant: | Ms Paull |
| Solicitors for the Applicant: | Waters & Co |
| Counsel for the Respondent: | Mr Duckett |
| Solicitors for the Respondent: | Konfir Kabo & Associates |
ORDERS
DECLARATION
The court declares that the financial agreement signed by the parties on [date omitted] 2008 is not binding upon the parties.
ORDERS
Within 14 days of the date of these orders the husband shall file and serve an Amended Initiating Application, with an Affidavit and Form 13 Financial Statement in support, setting out the orders he seeks.
Within 14 days of service of the husband’s documents as set out in paragraph 1 hereof the wife shall file a Response, and an Affidavit and Form 13 Financial Statement in support, setting out the orders she seeks.
The matter be otherwise adjourned to this court for mention in the Duty List on 18 September 2013 at 9:45 a.m.
IT IS NOTED that publication of this judgment under the pseudonym Renard & Geach is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT MELBOURNE |
MLC 6887 of 2012
| MR RENARD |
Applicant
And
| MS GEACH |
Respondent
REASONS FOR JUDGMENT
Introduction
The question for the court in this matter is whether a Financial Agreement signed by the parties on [date omitted] 2008 (“the Agreement”) is binding upon them pursuant to Section 90G of the Family Law Act 1975 (“the Act”).
The husband seeks a declaration under Section 90G(1)(b) and (c) of the Act that the Agreement is not binding because he did not receive the requisite independent legal advice before he signed it, and did not receive a copy of the Agreement afterwards. In the alternative, he seeks an order that the Agreement be set aside as being void for duress under Section 90K(1)(b) of the Act.
The Wife seeks a declaration that the Agreement is binding, being a Financial Agreement under s.90C and complying with the provisions of s.90G(1) of the Act.
Background
The parties were married at [omitted] on [date omitted] 2008 (“the Australian marriage”). Mr Renard, who is now 49 years old, is an Australian citizen and Ms Geach, who is 42, is an Indonesian citizen with permanent resident status in Australia.
The parties finally separated in January 2012 and were divorced on 14 March 2013.
The marriage was the third for Mr Renard and the second for
Ms Geach although she had also been involved in a previous de facto relationship.
It is the evidence of both parties that the Australian marriage was kept secret for at least the next six months because the wife did not want her family to know about it.
The wife is [family details omitted].
The parties were to marry in Bali on [date omitted] 2008 according to Balinese custom and Indonesian law, and it was the husband’s evidence, that the wife had told him that her family would be angry and upset if they knew the couple had already married under Australian law.
The wife’s evidence was that she had told her mother of the Australian marriage in or before September 2008.
In any event, the parties signed the Agreement on [omitted] 2008, the day before they flew out to Bali to prepare for their Bali wedding.
These proceedings
The Husband initiated these proceedings by way of an Initiating Application filed on 8 October 2012 in which he seeks a property settlement under Section 79 of the Act, although that is not how the Application is worded.
The Initiating Application does not refer to the Agreement at all, although the Affidavit sworn 26 September 2012 and filed with the Initiating Application does mention a “Pre-nuptial Agreement”.
The Wife’s Response filed 9 November 2012 seeks an order that the Agreement “be held binding on the parties pursuant to Section 90C of the Family Law Act”.
The Husband’s Amended Initiating Application filed 24 April 2013 seeks, inter alia, and as an interim order:
4. That the Binding Financial Agreement (BFA) dated the [omitted] 2008 and the “PreNuptial Agreement” (sic) executed in Indonesia on the [date omitted] 2008 BE SET ASIDE (sic) pursuant to s.79A of the Act on the grounds they are invalid in that s()G(1A)(c) (sic) applies to the BFA and that as a consequence the applicants (sic) was not provided with independent legal advice on his rights, advantages or disadvantages in signing either or both document(s).
Discussions between the bench and the bar at the beginning of the trial led to a common understanding that what the husband actually seeks is that the Agreement be declared not to be binding because it does not comply with the requirements of s.90G(1)(b) and (c) of the Act.
However, in her closing submissions, counsel for the husband stated that in the alternative, he seeks an order that the Agreement be set aside because the husband was under duress when he signed it. I will therefore need to address that issue, should I find that the Agreement is binding on the parties.
The issue of the validity of the document which all parties agree was signed at the home of the wife’s parents in Bali on the morning of [date omitted] 2008 (“the Bali document”), was not specifically agitated at trial, although the circumstances under which that document was signed were raised by counsel for the husband as an indication of the duress the husband was allegedly under at that time.
It was inferred that the husband claims that those circumstances had a bearing on whether the husband was acting under duress when he signed the Agreement some nine days earlier, although that was never stated explicitly.
For the sake of clarity, I find that as there were no lawyers admitted in an Australian jurisdiction present when the Bali document was signed, that document is not enforceable as a Financial Agreement made under s.90G(1) of the Act.
In the matter of Ruane & Bachmann-Ruane [2009] FamCA 1101, Cronin J held that only advice from a lawyer qualified to practise in Australia is capable of satisfying s.90G(1). If the wife seeks to enforce the provisions of the Bali document, she will need to do so in Indonesia.
I will therefore treat the Husband’s Application for Interim Orders as if it contained a properly drafted order seeking that the Agreement be declared non-binding on the parties as not complying with s.90G (1)(b) and/or (c), or, in the alternative, an order that it be set aside as being void for duress under the provisions of s.90K(1)(b).
That is, this hearing is to determine the interim issue of whether the Agreement is binding on the parties. If it is, then that is the end of the matter and the Agreement must be complied with. Only if it is declared not to be binding will the further matters set out in the Husband’s Amended Initiating Application be considered, and those at a later date.
The Agreement
Late on the afternoon of [omitted] 2008, the parties attended at the offices of Kabo Lawyers, a Melbourne law firm. Before leaving Kabo Lawyers that afternoon, the parties signed an Agreement relating to certain property matters arising out of their marriage.
The essential part of the Agreement is to be found in paragraphs 3 to 6, which I set out here in full.
Assets of the parties
The parties covenant and agree that in the event that a separation occurs:
(a)the Husband shall be entitled to keep all items listed in the attached Schedule A,
(b)the Wife shall be entitled to keep all items listed in the attached Schedule B,
(c)The Wife shall continue to reside in the Matrimonial Home, and
(d)The Husband shall vacate the Matrimonial Home within 7 days of the Separation Date.
The parties further covenant and agree that, if a Separation Date occurs:
4.1the parties shall be entitled to keep all their own business enterprises and their respective company’s assets, to the exclusion of the other,
4.2all shares and other securities haled by either party or by them jointly at the Separation Date shall be valued at the Separation Date and divided equally between them;
4.3all sums held in joint personal bank accounts of a party or both parties at the Separation Date shall be divided equally between them;
4.4all credit card and other personal debts of the parties or either of them at the Separation Date, and the balance outstanding on the investment loan described in the Schedule, shall be shared equally between them;
4.5each of them, except as provided in this clause, shall be declared the sole legal and beneficial owner, to the exclusion of the other, of all other property registered in his or her name or in his or her current possession or control.
Superannuation Agreement
The parties further covenant and agree that, if a Separation Date occurs:
5.1 this deed also comprises a superannuation agreement as provided for in s90MH(2) of the Act;
5.2this particular covenant has effect only in accordance with Pt VIIIB of the Act;
5.3for the purposes of s90MJ(1) of the Act, that
(a) in respect of the superannuation interest applicable to the Husband, the Husband shall be entitled to retain the whole of the interest;
(b) in respect of the superannuation interest applicable to the Wife, the Wife shall be entitled to retain the whole of the interest;
5.4subject to s90MV, that this covenant continues to apply to the superannuation interests, even if the other covenants of this deed cease to remain in force.
Spousal Maintenance
Neither party is to pay the other party any amount of spousal maintenance.
The Recitals of the Agreement include the following clause:
E.Each of the parties has received separate legal advice before executing this deed (as certified in the certificates annexed to this deed) concerning the following matters:
· The effect of this deed upon the rights of the parties to apply for any order under Pts VIII and VIIIB of the Act;
· Whether or not at the time it is to the advantage, financially or otherwise, of each party to enter into this deed;
· Whether or not it is prudent for each party to enter into the deed;
· Whether or not at the time and in the light of such circumstances as they are at the time reasonably foreseeable, the provisions of this deed are fair and reasonable.
Annexed to the signed Agreement are two pages: one signed by Neil Arthur Young of NA Young & Co Solicitors of 14 Hamilton Street Mont Albert 3127; and one signed by Konfir Kabo of Kabo Lawyers of Level 5, 100 Collins Street Melbourne. These pages are identical in their terms and say as follows:
I, [name of lawyer] of [name and address of firm], solicitor hereby certify that in relation to a deed proposed to be entered into between the Husband and the Wife (“the parties”) I advised the Wife/Husband (“my client”) independently of the other party and before the time at which my client signed the deed, as to the following matters:
· The effect of the deed on the rights of the parties to apply for an order under Pt VIII of the Family Law Act 1975.
· Whether or not at the time it was to the advantage, financially or otherwise of my client to enter into the deed.
· Whether or not at the time it was prudent for my client to enter into the deed.
· Whether or not at the time and the light of such circumstances as they were at the time reasonably foreseeable, the provisions of the deed were fair and reasonable.
The law
The law in relation to the requirements necessary for a Financial Agreement to be binding on the parties is found in Section 90G(1) of the Act:
SECTION 90G WHEN FINANCIAL AGREEMENTS ARE BINDING
90G(1) Subject to subsection (1A), a financial agreement is binding on the parties if, and only if (emphasis added) :
(a)the agreement is signed by all the 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 © 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 or set aside by a court.
The Full Court addressed the meaning of Section 90G(1) in the case of Parker & Parker [2012] FamCAFC 33.
In that case, Murphy J set out with great erudition the position in relation to the interpretation of s.90G(1)(b) after the introduction of the Federal Justice System Amendment (Efficiency Measures) Act (No. 1) 2008 (Cth) and the Federal Justice System Amendment (Efficiency Measures) Act (No. 2) 2009 (Cth). In doing so, he reiterated and affirmed the views he had previously set out in Senior & Anderson [2011] Fam CAFC 129; (2011) FLC 93-470, and in Hoult & Hoult [2011] FamCA 1023; [2011] FLC 93-489.
Having decided that s.90G(1) should now be interpreted using a “consolidated form” of the section that incorporates two alternative versions of s.90G(1)(b) (at 169) , Murphy J said (at 212):
The questions required of the paragraph are relatively straightforward: once there is an agreement, what was the advice given as to the effect of the agreement on the party’s rights; what advice was given as to the advantages and disadvantages at the time of signature….and was that advice given before the party signed it.
But that is not the end of the matter. S.90G(1A) says as follows:
90G(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)
(d)the court makes an order under subsection (1B) 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.
That is, if a Court finds that an Agreement is prima facie unenforceable because of deficiencies under s.90G(1)(b), (c) and (ca), it must then consider whether it would be unjust and inequitable if the agreement were not binding on the parties.
This is in some ways a more difficult decision. The question is not whether it would be just and equitable if the Agreement were binding on the parties, but whether it would be unjust and inequitable if it were not binding. And I must make that determination without regard to any change in circumstances since the Agreement was made.
Section 90G(1A) was introduced into the Act to ensure that mere technical and trivial breaches of subsection (1) do not render an otherwise just and equitable Agreement unenforceable.
The events of [date omitted] 2008
It is common ground that Kabo Lawyers were acting for the wife on [date omitted] 2008, and that they had previously taken instructions from her to draft a Financial Agreement between the parties.
It is the evidence of all witnesses that they arrived at the offices of Kabo Lawyers late in the afternoon, and that there was an initial meeting at which the participants were the wife, her lawyer, the husband, and Mr Neil Young, a lawyer in private practice in the Melbourne suburb of Mont Albert. There may have been other staff members of Kabo Lawyers at that meeting but that is neither here nor there.
The wife then met separately with Mr Kabo, and the husband with Mr Young, before returning to the conference room for a second joint meeting at which the Agreement was signed. The amount of time each of the parties spent separately with the lawyers is a matter of dispute which I will address later in these reasons.
It was the evidence of both the husband and Mr Young that [date omitted] 2008 was the first time they had ever met, and that apart from seeing each other at various court hearings as part of these proceedings, they did not see or communicate with each other again until the date of this hearing on 9 May 2013.
The husband’s evidence
The husband’s evidence was that he arrived at the offices of Kabo Lawyers on [date omitted] 2008 having been told by the wife that he had to sign a “Pre-Nup” before the Bali wedding or her parents would not allow the Bali wedding to go ahead. He said that if the wedding did not go ahead, the wife would lose about $25,000 that she had paid in preparation for the wedding, which was to take place nine days later, that is, on [date omitted] 2008.
He said that the wife had told him that her parents were concerned that the husband might have some claim to their property should the marriage break down, and that the wife wished to safeguard the family’s property in Indonesia. He said that the wife told him that her parents’ concern arose from the fact that the wife had “lost property” in a previous settlement with a previous partner, and they wanted to safeguard all property owned by the wife and her family at that time.
His evidence was that he was happy to sign an agreement to that effect and that he went to the offices of Kabo Lawyers on [date omitted] 2008 with that intent. In fact, he said that he was determined to sign the Agreement when he went to Kabo Lawyers on that day, no matter what happened. Under cross-examination he told counsel for the wife:
..my intention was always from that moment I walked in there that I was signing it no matter what was written on it because we were getting married in nine days’ time. It didn’t really matter. Her mother wouldn’t let the wedding go ahead. So it didn’t mean that – I never read it and went, “OK. What does it all mean?” I just knew – come to the bit at the end where I needed to sign, my signature was going there. That was it. So now you’re asking me do I understand it now. No, I still don’t understand it now.
The husband said that he had not seen any draft or copy of the Agreement before he arrived at Kabo Lawyers on [date omitted] 2008.
His evidence was that there were essentially three parts to the meeting at Kabo Lawyers on [date omitted] 2008: one part including all parties that lasted approximately twenty minutes, one part where Mr Young left him alone with a copy of the draft Agreement for about twenty minutes before coming back into the room and asking him if he had any questions, and a third part consisting of a second meeting of all parties together where the Agreement was signed, that meeting too lasting about twenty minutes.
The husband says that when the parties separated to speak to the lawyers, Mr Young gave him a copy of the Agreement and told him to read it. He says that Mr Young then left the room for about twenty minutes before returning and asking him if he had any questions, to which he replied that he needed to speak to his wife. The husband says that the reason for that is that he was alarmed that the Agreement referred to the parties as being married, as he thought the Australian marriage [date omitted] 2008 was a secret. He says he was concerned that the wife might get into trouble with her mother and wanted to speak to her about that. He says that he was not able to speak to the wife before signing the Agreement.
After the Agreement had been signed, it is the husband’s evidence that he was not given a copy of the Agreement. He conceded that the wife may have been given two copies, one for him and one for her, but he insisted that he never saw a copy of the Agreement after he signed it until it was obtained by his lawyers and attached to his Affidavit sworn 11 February 2013. He says he never received any correspondence or other documents from either Kabo Lawyers or Mr Young after [date of meeting omitted] 2008.
Mr Renard said that he had not understood the full implications of the Agreement when he signed it and that he had thought it would cover Ms Geach’s family properties in Indonesia and the property at [V], which also belonged to Ms Geach’s parents. He conceded that he had told Mr Young that the wife’s furniture should also be covered by the Agreement.
Mr Young’s evidence
Mr Young said in evidence that he had been contacted by Mr Konfir Kabo of Kabo Lawyers and asked to attend their offices on [date omitted] 2008 “for the purposes of a binding financial agreement, that the husband didn’t have a lawyer and would I mind acting for him?”
His evidence was that he knew Mr Kabo because he had been Mr Kabo’s first employer in the law, and that this was not the first time he had responded to such a request from Mr Kabo.
Under cross-examination he denied that Mr Kabo had indicated that there was any urgency to the matter.
However, he also said that when he arrived at the offices of Kabo Lawyers, he introduced himself to Mr Renard, told him he was there by reason of the urgency of the matter, and asked him if he wanted him (Mr Young) to act for him (Mr Renard). There was no evidence adduced as to how or indeed whether the husband replied to that question.
When Mr Young was asked, he said that while he would have expected that he (the husband) had a copy of the Agreement, he (Mr Young) had proceeded on that basis that he did not. Under cross-examination he said further that he was not in a position to disagree with the husband’s statement that he had not seen any version of the document before that afternoon.
Mr Young said that from that moment on he was taking instructions from Mr Renard and making sure that he understood the matters set out in the “certificate”, by which I took him to mean the signed statement of advice required by s.90G(1)(c) and which bears his (Mr Young’s) signature
Mr Young said that he spent “probably a little less than an hour” alone with Mr Renard, and when asked what he and Mr Renard talked about he said the following:
Well, I rely on the document, because this is what I work on. I go through each clause, absolutely thoroughly, and make sure that the client responds to me in a manner that shows me he understands what it is about. Then I ask questions about the assets. In this case I spoke to him about why he was entering into it. And he told me that his wife had assets in Indonesia and (her) parents required her to enter into it.
However, Mr Young made no file notes of that meeting other than to place a tick next to each clause of the draft Agreement, to write on the draft Agreement the husband’s correct age and date of birth, and to add the word “joint” to the clause relating to bank accounts. He also asked Mr Kabo to move the reference to the furniture being retained by the wife from the substantive Agreement to Schedule B.I infer that from the difference in the draft and executed versions and from Mr Young’s oral evidence.
Mr Young’s evidence is that his entire file in relation to this matter consists of a copy of the executed Agreement, and the draft with the ticks, the husband’s age and the word “joint” on it. The file was the subject of a subpoena and it is true that there is no other document on the file at all.
In answer to the question: “Where are the file notes?” Mr Young replied “The file notes are the document”. Later he said that “there’s no need for notes” in situations where he has ticked the clauses on the draft, which he said was his common practice in these matters.
In other words, Mr Young says that the ticks on the draft Agreement are evidence that he gave the advice required by s.90(G)(1)(b). He also signed the statement of advice as required by s.90(1)(c) and saw that as evidence in itself that he had provided the requisite advice. Indeed he stated in the context of not having made any file notes:
Well, I didn’t need to. I gave a certificate. That’s what I was there to do.
When asked whether a prudent lawyer would write notes in their file and whether that would be the sensible thing to do, he replied
Not when you’re charging $440.
A little while later he said
An hour and a half plus travel, for $440 is pretty close to community service. There’s no need for notes when I’m clear in what I’ve said.
Under cross-examination Mr Young denied that he had left the husband alone to read the Agreement saying
No. I didn’t. I was with him all the time.
He also denied that he had spent only between 10 and 20 minutes alone with Mr Renard.
He further denied that he had not asked Mr Renard if he understood the Agreement, and answered in the affirmative the question whether he had “gone through the pros and cons of him agreeing or not agreeing to this document” However, Mr Young agreed that he had not gone through with Mr Renard his assets and liabilities in relation to the document.. He said further that he could not recall the husband asking to speak to the wife before the Agreement was to be signed.
Mr Young said that his memory of these events, which occurred four-and-a-half years before trial, had been jogged by the fact that
Mr Renard had made a complaint about him in relation to this matter to the Legal Services Commissioner earlier in 2013. It was said that the Legal Services Commissioner is awaiting the outcome of these proceedings before determining that complaint.
Some of Mr Young’s evidence was inconsistent. When describing what he would do when asked to provide advice to a client who was about to sign a Financial Agreement, Mr Young said that it was his practice to ask questions about the assets, but when questioned by counsel for the husband, he conceded that he had not asked the husband any questions about his assets and liabilities on [omitted] 2008.
He denied that Mr Kabo had told him the matter was urgent, but then said that he had told the husband that he was there because of the urgency of the matter.
Much of Mr Young’s evidence was of what it is his practice to do in matters such as this, rather than what he actually did on [omitted] 2008. This is not surprising given the passing of time and his lack of file notes from that day, but it adds an element of doubt in relation to the certainty of what was said on that day.
The Wife’s evidence
The wife’s evidence is that she instructed Kabo Lawyers by telephone to prepare a Financial Agreement for her and the husband to sign. She said she did not see the actual draft Agreement before attending at Kabo Lawyers on [omitted] 2008.
She said that the reason she wanted the husband to sign the Agreement was that her mother wished to give her some money to buy a property for her and the husband to live in, and she wanted to ensure that the husband would not be able to claim that money in any future property settlement.
Her evidence was that the Australian marriage was a secret from her family only until she and the husband had decided to make the Agreement, and that she had told her mother of the Australian marriage in [omitted] 2008, at about the same time as she engaged Mr Kabo. She denied that she had only sought the Agreement after she had told her mother of the Australian marriage, or that the Agreement was her mother’s suggestion.
She said that the husband knew the detail, or at least the general thrust of the Agreement, before [omitted] 2008 as they had discussed it several times in the months prior to the [omitted] meeting.
She stated further
..we spoke of this before – when I first met him in 2007, I guess, yes, and then first thing that I discuss with him was I lost my property with my ex-husband, and then he concerned about that. And then when he proposed me to marry him I said to him “Well, I’m a bit afraid about, you know, about all this stuff again. I don’t want to stuff up again”. And he understands my situation at that time, and we discuss about agreements long time before that Agreement.
Under cross-examination, Ms Geach said that the date of [omitted] was chosen because it was the only day the parties were available to attend Kabo Lawyers. She denied that there was a hurry to sign the Agreement before the Bali wedding on [omitted], or that she had told the husband that the Bali wedding could not go ahead unless he signed the Agreement.
In relation to the amount of time that the husband spent alone with Mr Young on [omitted] 2008, the wife’s evidence on Affidavit was that the husband was with Mr Young for about twenty minutes .Under re-examination by her counsel, she said it was 30 minutes.
Evaluation of the evidence
The husband says that he did not receive any advice from Mr Young on [date omitted] 2008; and that Mr Young merely left him to read the Agreement and came back about ten or twenty minutes later to see if he had any questions.
Were I to accept the husband’s version of events at its highest, it would be obvious that the provisions of s.90G(1)(b) had not been satisfied.
Mr Young says that he did provide advice as set out in the statement of advice he signed on [date omitted] 2008. He says that the evidence of that advice is found first in the statement of advice itself, and second in the ticks on the draft copy of the Agreement, in the handwritten amendments to the Agreement in the form of a changed age of the husband, in the addition of the word “joint”, and in the removal of the clause relating to the wife’s furniture from the Agreement itself to the attached Schedule.
Having inspected the document, I note that those amendments were noted in handwriting on the draft version of the Agreement.
Therefore I infer that some discussion took place between Mr Young and the husband, as evidenced by the amendments to the original draft, but I can make no comment as to the nature, or the depth or the quality of any advice given, or even whether it was sufficient in the circumstances for Mr Renard to fully appreciate his position before he signed the Agreement. Mr Renard is adamant that his experience was that he received no advice, or at very least, no advice that he understood, and I have no reason to doubt that experience.
A lawyer should always make clear and contemporaneous notes of any advice given to a client, and for exactly the reason that has led to this litigation – that is, to support any assertion that such advice has been given and to refute any assertion that it has not.
Mr Young’s view that he did not need notes of the conversation and advice when he had placed ticks next to each clause of the draft Agreement, does not in my view pass muster as prudent practice in this situation. Indeed, it could be said that his view indicates a rather cavalier and even lazy approach to his responsibilities under the Act.
This is particularly so when Mr Young had been brought in by the wife’s lawyer to provide a one-off advice that was necessary before the Agreement could be signed by the parties. Far from that fact allowing him to provide the bare minimum as he understood the Act to require, such a retainer would in my view require him to be particularly careful in the advice he gave and would necessitate clear and comprehensive notes being made.
Mr Young’s role on [omitted] 2008 was not, as he seems to have thought, to “give a certificate”. His role was to provide the husband with independent legal advice in the terms set out in s.90G(1)(b).
It is difficult to see how that role could be fulfilled in even a 50 minute interview, as it would require detailed instructions being taken as to the assets and liabilities of the marriage, the husband’s current position, and the history of the relationship before even looking at the draft Agreement. I therefore consider that I do not need to make a finding on the exact length of time Mr Young spent alone with the husband on [date omitted] 2008, as even on Mr Young’s evidence, it was not in my view long enough to take comprehensive instructions and give detailed and comprehensive advice about the Agreement.
In this case, the evidence in relation to what was said between Mr Young and the husband is in the form of competing sworn testimony, and I am unable to make a finding of fact that one of the witnesses is telling an untruth, or is wrong in his interpretation of events. In these circumstances, I find that there is insufficient evidence to conclude whether the advice Mr Young says he gave Mr Renard on [omitted] 2008 complies with the requirements of s.90G(1)(b).
I therefore find that there has been a breach of s.90G(1)(b) in that I cannot be satisfied that the interaction between Mr Young and
Mr Renard on [omitted] 2008 complied with the requirements of the section.
As to the issue of Mr Young being brought into the case by the wife’s lawyer, it is my view that Mr Kabo would have served his client better by informing the husband that he needed to obtain independent legal advice before signing the Agreement, and referring him to the Law Institute of Victoria for the names of appropriate lawyers who might assist him.
The question of the Agreement’s compliance with Section 90G(1) having been answered in the negative, s.90G(1A) requires me to address the issue of whether it would be unjust and inequitable to the parties to hold the Agreement not to be binding notwithstanding that s.90G(1) has not been complied with.
The failure to provide (or doubt as to the failure to provide) independent legal advice to a party to an Agreement which ousts the jurisdiction of the courts is, in my view, not a mere technical breach which can be overlooked in deciding whether an Agreement is enforceable.
The right to independent legal advice before entering any contract or agreement which alters the usual property rights of the parties is a fundamental right of any party to such an agreement.
In this case, I cannot be certain that such advice was given, and therefore I find that it would not be unjust and inequitable if the Agreement were not binding on the parties.
The fact that I must disregard any change in circumstances since the Agreement was signed means that any issues in relation to the property at [Y] must not form part of my decision.
It also means that submissions made by counsel for the wife in relation to the husband’s likely current position under s.79 of the Act must also be disregarded.
In those circumstances, I am bound to declare that the Financial Agreement signed by the parties on [omitted] 2008 is not binding on the parties.
Having found that the Agreement is not binding on the parties, it then follows that I do not need to decide whether to set the Agreement aside under the provisions of s.90K.
This means that the husband is now at liberty to pursue his claim upon the assets of the marriage under Section 79 of the Act, and I will make orders in those terms.
I certify that the preceding ninety-five (95) paragraphs are a true copy of the reasons for judgment of Judge Small
Date: 5 July 2013
Key Legal Topics
Areas of Law
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Family Law
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Contract Law
Legal Concepts
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Contract Formation
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Remedies
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Procedural Fairness
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