Scott & Scott (No.3)
[2019] FamCA 936
•6 December 2019
FAMILY COURT OF AUSTRALIA
| SCOTT & SCOTT (NO. 3) | [2019] FamCA 936 |
| FAMILY LAW – COURTS AND JUDGES – Disqualification – Application by wife seeking disqualification of a judge on the ground of alleged bias – Where the wife’s application to have the disqualification application heard by another judge is refused – Where the wife’s allegations of actual bias were unsustained and the application confined to apprehended bias – Where principles in Ebner v Official Trustee in Bankruptcy (2000) 205 CLR 337 are applied – Where it is determined the judge’s interaction with the wife during previous Court events was no more than the proper discharge of judicial duty – Where the application for disqualification is dismissed. FAMILY LAW – PROPERTY SETTLEMENT – Financial Agreement – Where the financial agreement purports to be made pursuant to s 90C of the Family Law Act 1975 (Cth) – Where the wife seeks a declaration under Part VIIIA of the Act that the financial agreement is either not binding or set aside – Where the husband opposes the wife’s application and seeks a declaration the financial agreement is binding – Where the husband has the onus of proving the binding nature of the agreement – Where the certificate of independent legal advice provided by the wife’s solicitor and the recital within the agreement on their face satisfy s 90G(1)(b) of the Act – Where the evidentiary burden falls to the wife to demonstrate some deficiency in the nature of the legal advice she received – Where the wife failed to established that the independent legal advice was deficient – Where the wife pleads the financial agreement was vitiated by duress, undue influence, and unconscionable conduct by the husband – Where Thorne v Kennedy (2017) 263 CLR 85 is considered – Where the wife fails to prove she was acting under duress when she signed the agreement – Where the wife fails to establish she entered the agreement due to the husband’s undue influence – Where the wife was not subject to some special disadvantage and even if she was, her evidence does not prove the husband’s unconscionable conduct – Where the wife contends the agreement is void or impracticable to implement under s 90K(1) of the Act because the agreement failed to take into account future liabilities of the parties – Where the wife fails to establish how the existence of debts accumulated after the agreement was made renders it void or impracticable to implement – Where the wife’s assertion that it is impracticable to split the parties’ superannuation interests is rejected – Where the wife’s contention that the agreement is unenforceable under the equitable doctrine of laches fails – Where the agreement is binding on the parties and should not be set aside – Where Part VIII of the Act does not apply – Application dismissed – Costs reserved. FAMILY LAW – PRACTICE AND PROCEDURE – Application of s 102NA of the Family Law Act 1975 (Cth) – Where allegations of family violence – Where the wife is unrepresented – Where none of the first three conditions of s 102NA(1)(c) of the Act was engaged – Where no embargo to prevent the wife’s cross-examination of the husband – Where no order sought by the wife to prevent cross-examination – Where no compelling reason for the Court to voluntarily act under s 102NA(3) of the Act – Where the wife declined alternative strategies pursuant to s 102NB of the Act – No orders made. |
| Evidence Act 1995 (Cth), s 122 Family Law Rules 2004 (Cth), rr 1.04, 1.06, 1.07, 1.08 |
| Australia & New Zealand Banking Group v Karam (2005) 64 NSWLR 149; [2005] NSWCA 344 Bainton v Rajski (1992) 29 NSWLR 539 Browne v Dunn (1893) 6 ER 67 Concrete Pty Ltd v Parramatta Design and Development Pty Ltd (2006) 229 CLR 577; [2006] HCA 55 Crawley v Short (2009) 262 ALR 654; [2009] NSWCA 410 Ebner v Official Trustee in Bankruptcy (2000) 205 CLR 337; [2000] HCA 63 Hawker Pacific Pty Ltd v Helicopter Charter Pty Ltd (1991) 22 NSWLR 298 Hoult & Hoult (2013) FLC 93-546; [2013] FamCAFC 109 Johnson v Johnson (2000) 201 CLR 488; [2000] HCA 48 Kuhl v Zurich Financial ServicesAustralia Ltd (2011) 243 CLR 361; [2011] HCA 11 LC v TC (1998) FLC 92-803; [1998] FamCA 47 Logan & Logan (2013) FLC 93-555; [2013] FamCAFC 151 R v Australian Stevedoring Industry Board; Ex parte Melbourne Stevedoring Co Pty Ltd (1953) 88 CLR 100; [1953] HCA 22 R v Watson; Ex parte Armstrong (1976) 136 CLR 248; [1976] HCA 39 Re F: Litigants in Person Guidelines (2001) FLC 93-072; [2001] FamCA 348 Re Minister for Immigration and Multicultural Affairs; Ex parte Applicant S20/2002 (2003) 198 ALR 59; [2003] HCA 30 Saintclaire & Saintclaire (2015) FLC 93-684; [2015] FamCAFC 245 Scott & Scott (No.2) [2019] FamCA 599 Thorne v Kennedy (2017) 263 CLR 85; [2017] HCA 49 Webb v The Queen (1994) 181 CLR 41; [1994] HCA 30 |
| APPLICANT: | Ms Scott |
| RESPONDENT: | Mr Scott |
| FILE NUMBER: | CRC | 105 | of | 2016 |
| DATE DELIVERED: | 6 December 2019 |
| PLACE DELIVERED: | Newcastle |
| PLACE HEARD: | Newcastle |
| JUDGMENT OF: | Austin J |
| HEARING DATE: | 4, 5 & 6 November 2019 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Not Applicable |
| SOLICITOR FOR THE APPLICANT: | Not Applicable |
| COUNSEL FOR THE RESPONDENT: | Mr Carolan |
| SOLICITOR FOR THE RESPONDENT: | Green & McKay |
Orders
The Application in a Case filed by the applicant on 31 October 2019 is dismissed.
The Amended Initiating Application filed by the applicant on 17 October 2019 is dismissed.
Declaration that the financial agreement executed by the applicant on 20 December 2010 and by the respondent on 4 February 2011 is a binding financial agreement within the meaning of Part VIIIA of the Family Law Act 1975 (Cth).
The parties shall forthwith do all acts and things necessary to implement the binding financial agreement and in aid thereof and without implying limitation:
(a)The applicant shall transfer all her right, title and interest in the real property and improvements comprising 1 & 2 Q Street, R Town NSW, being Folio Identifier … and Auto Consol …, to the respondent in accordance with clause 9 of the binding financial agreement;
(b)The respondent shall transfer all his right, title and interest in the real property and improvements comprising Y Street, M Town NSW, being Folio Identifier …, to the applicant in accordance with clause 10 of the binding financial agreement;
(c)The respondent shall sell the real property and improvements comprising EE Street, GG Town, NSW, being Folio Identifier … and Auto Consol … and apply the proceeds of sale in accordance with clauses 11 and 12 of the binding financial agreement; and
(d)The parties shall, as directors of E Pty Ltd, the trustee of the Scott Family Trust, wind-up the Scott Family Trust in accordance with Clause 13 of the binding financial agreement.
In the event of either party refusing or neglecting to sign within 7 days of a written request to do so any document necessary to implement the terms of these orders the Registrar of the Family Court of Australia at Newcastle is empowered to execute such documents on behalf of the parties pursuant to s 106A of the Family Law Act 1975 (Cth).
Otherwise, save as to costs, the Response to an Amended Initiating Application filed by the husband on 13 September 2019 is dismissed.
Costs are reserved for 28 days.
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 Scott & Scott (No. 3) 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 NEWCASTLE |
FILE NUMBER: CRC 105 of 2016
| Ms Scott |
Applicant
And
| Mr Scott |
Respondent
REASONS FOR JUDGMENT
During their marriage, the parties executed a financial agreement which made provision for the manner in which their property would be divided in the event of their subsequent separation (the “agreement”). They are now in dispute about it.
The agreement purports to be made pursuant to s 90C of the Family Law Act 1975 (Cth) (“the Act”), rendered binding upon them by the observance of the conditions found within s 90G of the Act, such that the Court’s discretionary property settlement jurisdiction is ousted pursuant to s 71A of the Act.
The parties separated in June 2015 and the wife commenced these proceedings in May 2016. She now seeks relief against the husband in two respects: first, to obtain a declaration under Part VIIIA of the Act that the agreement is either not binding or is set aside; and secondly, if successful in the first instance, to then have the parties’ property interests adjusted under Part VIII of the Act.
The husband opposes the relief sought by the wife in all respects. He instead seeks a declaration that the agreement is binding upon the parties, together with ancillary orders to compel the implementation of the terms of the agreement.
The parties agreed their competing applications over the characterisation and implementation of the agreement should be determined separately since, if found to be binding and enforceable, it will govern their rights and obviate the need for a more protracted hearing over their property entitlements under Part VIII of the Act. These reasons therefore only determine the preliminary dispute about the binding quality of the agreement and the husband’s associated claim for its enforcement.
Disqualification application
The wife filed an Application in a Case on 31 October 2019, several days before the trial was due to commence on 4 November 2019, seeking my disqualification from determining any further applications in the proceedings between the parties, and further, for the disqualification application to be determined by another judge.
The disqualification application was heard before the trial commenced. Once heard, the wife was informed her disqualification application would be dismissed, but the dismissal order would be made and the reasons for it delivered later, contemporaneously with the judgment arising out of the trial. The appeal limitation periods for the dismissal order (s 94(1AA)) and the substantive orders (s 94(1)(a)) then run concurrently.
Disqualification applications are properly heard and determined by the judge whom the litigant wants disqualified (Ebner v Official Trustee in Bankruptcy (2000) 205 CLR 337 (“Ebner”) at [74]; Bainton v Rajski (1992) 29 NSWLR 539 at 544, 548), so the wife’s application to have her application heard by another judge was refused.
The wife acknowledged understanding the distinction between claims of actual bias and claims of apprehended bias, but she was reluctant to clarify the nature of her claim of bias in this instance. She was not forced to do so and the distinction was not then addressed in her submissions.
Claims of judicial bias should be confined to ostensible bias and not extend to actual bias (see R v Watson; Ex parte Armstrong (1976) 136 CLR 248 at 258), at least not without compelling evidence to vindicate a claim of actual bias. An allegation of actual bias is serious because it amounts to a contention the judge knowingly or subconsciously acted contrary to his or her duty to decide cases impartially, the evidentiary bar for which claim is set high. To make out the claim it must be shown the bias is real and the judge’s conduct was such that a high probability arises of bias inconsistent with the fair performance of the judicial duty (see R v Australian Stevedoring Industry Board; Ex parte Melbourne Stevedoring Co Pty Ltd (1953) 88 CLR 100 at 116). In other words, it must be demonstrated by inference that the judge’s mind was committed to a conclusion already formed and incapable of alteration (see Re Minister for Immigration and Multicultural Affairs; Ex parte Applicant S20/2002 (2003) 198 ALR 59 per Kirby J at [101]).
The only evidence adduced in support of the disqualification application was the wife’s affidavit sworn on 30 October 2019, in which she referred to appearances before me in these proceedings on five occasions between May and August 2019. Transcripts of those appearances were referred to as annexures to the affidavit, but they were not annexed and were separately tendered.[1] The wife’s oral submissions in support of the application did not amplify the commentary contained in her affidavit. As it transpired, neither her evidence nor her submissions were capable of sustaining an allegation of my actual bias and so her application must be confined to an allegation of apprehended bias.
[1] Exhibit A in the disqualification application
The principle governing disqualification for apprehended bias is well known (see Ebner at 344-345; Johnson v Johnson (2000) 201 CLR 488 (“Johnson”) at 492):
…a judge is disqualified if a fair-minded lay observer might reasonably apprehend that the judge might not bring an impartial mind to the resolution of the question the judge is required to decide. That principle gives effect to the requirement that justice should both be done and seen to be done, a requirement which reflects the fundamental importance of the principle that the tribunal be independent and impartial. It is convenient to refer to it as the apprehension of bias principle.
(Footnotes omitted)
Application of the principle entails two distinct steps, as was explained in Ebner (at 345):
…First, it requires the identification of what it is said might lead a judge… to decide a case other than on its legal and factual merits. The second step is no less important. There must be an articulation of the logical connection between the matter and the feared deviation from the course of deciding the case on its merits. The bare assertion that a judge…has an ‘interest’ in litigation, or an interest in a party to it, will be of no assistance until the nature of the interest, and the asserted connection with the possibility of departure from impartial decision making, is articulated. Only then can the reasonableness of the asserted apprehension of bias be assessed.
There are four distinct but overlapping categories of cases covered by the doctrine of apprehended bias upon which it may be alleged a judge may be perceived to decide a case other than on its merits (see Webb v The Queen (1994) 181 CLR 41 at 74; Ebner at 348-349). The first is disqualification by interest, the second is disqualification by conduct, the third is disqualification by association, and the fourth is disqualification by extraneous information.
In this instance, the wife relied upon my conduct, in so far as it was revealed by the transcripts, as the evidentiary basis for her application. The content of her affidavit was, in effect, merely her commentary on the transcripts, describing her perceptions and feelings on those occasions she appeared before the Court. The wife commented pejoratively upon some particular interchanges during the appearances, claiming she was interrupted, unfairly challenged, belittled, and deprived of an equal opportunity to contribute to the discourse. By implication, her submission was that my conduct during those Court events was liable to cause an independent and reasonable observer to apprehend the prospect of my favouritism towards the husband.
The wife presents as an intelligent and confident person. The transcripts reveal her nimble capacity to deal with abstract concepts and her ability to engage in frank debate. While it is sincerely regretted the wife feels as though she was unfairly treated, it is nonetheless important to recognise that the honesty of her impressions is not proof of the facts. The test for disqualification is objective, not subjective. Having considered the transcripts dispassionately, including those parts she extracted in the body of her affidavit (which she said entirely encapsulated the evidence of her complaint about lack of impartiality), the hypothetical fair-minded lay observer would not question my impartiality. The content and manner of my interaction with the wife on those five occasions was no more than the proper discharge of the judicial duty to:
(a)encourage the parties to consider settlement of the dispute before proceeding blindly to a defended hearing (rr 1.04, 1.06, 1.07 of the Family Law Rules 2004 (Cth) (“the Rules”));
(b)identify only those issues really in dispute between the parties and invite their focus upon only those issues (rr 1.04, 1.06 of the Rules);
(c)ensure the proceedings are conducted justly, in a timely manner, without undue cost, without undue formality, and without unnecessary protraction (s 97(3) of the Act; rr 1.04, 1.07, 1.08 of the Rules); and
(d)provide practical information to the wife, as a self-represented litigant, to enable her informed and efficient conduct of the litigation (see Re F: Litigants in Person Guidelines (2001) FLC 93-072).
Modern judges, responding to the need for more active case management, intervene in the conduct of cases to an extent that may surprise litigants who expect silence and implacability until the moment of pronouncement of judgment. The expression of tentative views by judges are not, on that account alone, to be taken to indicate prejudgment. Judges are not expected to wait until the end of a case before they start thinking about the issues, nor to sit mute while cases are managed, evidence is adduced, and arguments are advanced (see Johnson at 493, 504-505; Concrete Pty Ltd v Parramatta Design and Development Pty Ltd (2006) 229 CLR 577 at [111]-[112]).
The wife’s disqualification application is dismissed.
Background
The parties married in 2005 and finally separated in June 2015.
The agreement was signed by the wife on 20 December 2010 and by the husband on 4 February 2011.
Relevantly, the agreement recorded the parties’ intention to preclude claims between them under the Act in the event of their separation (Recital B), purported to be made pursuant to s 90C of the Act (Recital D), and confirmed the parties’ receipt of independent legal advice about the agreement (Recital F). The certificates of independent legal advice, signed by the solicitors who separately advised the parties about the agreement, were appended as the last page.
The agreement identified the parties’ assets, superannuation interests and financial resources and recited the estimated net values of those assets, superannuation interests and financial resources (Recital E, Schedule 1). The agreement provided for the manner in which, upon separation, the parties would divide their superannuation interests (clauses 5-8), the parcels of real property they own (clauses 9-12), the income and capital derived from a family trust (clause 13), their bank accounts and shares (clause 14), and their personal property (clause 15).
The proceedings have had a long and tortuous history, which need not be repeated at length. The litigation was commenced in the Federal Circuit Court in May 2016, but later transferred to this Court in November 2017. Thereafter, progress to trial was halted by a successful appeal against interim property orders made by another judge. Then, in May 2019, I separately determined the parties’ dispute over their child under Part VII of the Act.
The trial of this property dispute was originally fixed before me in August 2019. In order to try and refine the contentious issues between the parties about the status and enforceability of the agreement, procedural orders were made for the wife to plead and particularise her claim for relief, which she duly did by filing her Points of Claim on 27 May 2019. Although intelligent and capable, the wife was self-represented in the litigation and her lack of familiarity with legal procedure hampered her ability to articulate her claim with precision. Rather than being confined to pithy allegations of fact, the Points of Claim was prepared in the form of an argumentative narrative.
The imprecision of the wife’s contentions became even more problematic when she later filed her Case Outline just in advance of trial, on 14 August 2019, because it contained submissions attacking the validity and enforceability of the agreement on more and much wider bases than were pleaded and particularised in her Points of Claim. The trial was therefore vacated with costs and the wife was ordered to file and serve fresh particulars of her claim for relief in readiness for the re-scheduled trial in November 2019. Those procedural orders were made on 22 August 2019 and ex tempore reasons for such orders were delivered (see Scott & Scott (No.2) [2019] FamCA 599).
Pursuant to those procedural orders, the wife filed Amended Points of Claim on 6 September 2019. Even the amended particulars were loquacious and inexact but, in an attempt to do them justice, it seems the wife’s claim comprised the following alternative grounds of attack upon the agreement:
(a)The agreement is not binding upon the parties within the meaning of Part VIIIA of the Act because:
(i)the independent legal advice provided to the wife about the agreement was deficient for several reasons;[2] and
[2] Amended Points of Claim filed 6/9/19, para 6.1
(ii)the text of the agreement, including the schedule of assets set out within it, omitted any reference to the parties’ liabilities.[3]
(b)Alternatively, if the agreement is binding upon the parties, it should nonetheless be set aside because:
(i)she signed the agreement under duress, since she was the victim of family violence perpetrated by the husband from as early as 2006, thereby rendering the agreement void, voidable or unenforceable pursuant to ss 90K(1)(b), 90K(1)(e) or 90KA of the Act.[4]
(ii)the husband was the stronger party, she was vulnerable and at significant disadvantage, and she had inferior bargaining power to the husband, of which he knowingly took advantage and so the agreement is void due to the husband’s undue influence or unconscionable conduct.[5]
(iii)the agreement did not deal with the parties’ existing or future liabilities, thereby rendering the agreement void ab initio under ss 90K(1)(aa)(ii) or 90K(1)(b) of the Act, or alternatively, impracticable to carry out.[6]
(iv)the agreement is now impracticable to carry out and so should be set aside under s 90K(1)(c) of the Act due to the way in which the parties’ self-managed superannuation fund subsequently acquired proprietary interest in a unit trust.[7]
(v)the agreement is unenforceable due to the husband’s laches.[8]
(vi)the husband, in numerous different ways, acted contrary to or inconsistently with the terms of the agreement after the parties’ separation and so it is now impracticable to carry it out.[9]
[3] Amended Points of Claim filed 6/9/19, para 6.2
[4] Amended Points of Claim filed 6/9/19, paras 4, 7, 8.7, 9, 10, 12, 13
[5] Amended Points of Claim filed 6/9/19, paras 8, 9, 10, 11, 12, 13, 14
[6] Amended Points of Claim filed 6/9/19, paras 19, 20, 21, 22, 25, 26, 29
[7] Amended Points of Claim filed 6/9/19, paras 23, 24
[8] Amended Points of Claim filed 6/9/19, paras 16, 17
[9] Amended Points of Claim filed 6/9/19, paras 15, 31, 32, 33, 34, 35, 36, 37, 38, 39
At the commencement of the fresh trial the wife conceded the accuracy of that summary of her claims. That particularised pleading explains the relief she seeks in her Amended Initiating Application filed on 17 October 2019 (Orders 1-3).
The husband relied upon his Response to an Amended Initiating Application filed on 13 September 2019.
Evidence
The wife relied upon:
(a)her primary affidavit filed on 24 June 2019, the intended annexures to which were separately tendered as an exhibit;[10]
(b)numerous identified paragraphs from an affidavit she previously filed on 30 April 2019, which were adopted by her primary affidavit;[11]
(c)her supplementary affidavit filed on 26 July 2019 in reply to the husband’s affidavit; and
(d)another affidavit she filed on 18 October 2019.
[10] Exhibit W1
[11] Wife’s affidavit filed 24/6/19, para 15
The husband relied upon:
(a)his primary affidavit filed on 12 July 2019, the intended annexures to which were separately tendered as an exhibit;[12]
(b)his earlier affidavit affirmed (but apparently not filed) on 3 May 2019,[13] which was adopted by his primary affidavit;[14] and
(c)the affidavit of Ms DD, solicitor, filed on 15 October 2019.
[12] Exhibit H1
[13] Exhibit H2
[14] Husband’s affidavit filed 12/7/19, para 48
Although directed to file self-contained primary affidavits for the trial of this dispute,[15] neither party complied. In respect of the alleged occurrence of family violence and its alleged adverse effects upon the wife, she referred to and purported to incorporate numerous identified paragraphs from an affidavit she previously filed on 30 April 2019.[16] The husband also sought to adopt the contents of his earlier affidavit affirmed on 3 May 2019.[17] Both affidavits were previously relied upon in respect of the parenting dispute between the parties, which dispute was finalised by orders made on 17 May 2019. With the parties’ consent, that evidence was taken into account.
[15] Orders 4, 5 and 6 made on 30 May 2019
[16] Wife’s affidavit filed 24/6/19, para 15
[17] Husband’s affidavit filed 12/7/19, para 48
Objections were taken and sustained to various parts of the affidavits relied upon by both parties.
The husband sought leave to rely upon two additional affidavits sworn by receivers, attesting to their willingness to be appointed in that capacity in the event the husband’s application for their appointment was successful, but leave to rely upon the affidavits was refused. The affidavits were only sworn on 30 October 2019 and so the wife had little notice of them. The husband’s application for supplementary relief in the form of the appointment of receivers has been extant since he filed his Response on 13 September 2019, but he failed to file and serve the affidavits of the receivers in a timely way in accordance with procedural orders.[18] The receivers were formerly appointed by a different judge in May 2018 and their appointment was the subject of a successful appeal. The receivers currently have an application pending against the parties seeking orders compelling the parties’ payment of their costs incurred following their appointment pursuant to the appealed orders,[19] so the wife’s objection to their renewed appointment was plainly foreseeable by the husband. The lateness of their affidavits could not, therefore, be satisfactorily explained.
[18] Orders made 30/5/19 and 22/8/19
[19] Application in a Case filed on 28/10/19
Is the agreement binding?
On its face, the agreement purported to be binding under the Act.
The husband contended all requirements of s 90G(1) of the Act were satisfied so as to render the agreement binding. However, the wife contended it was deprived of its binding quality because the advice she received about it was deficient.
Since the husband seeks refuge in the agreement and the consequent protection from operation of Part VIII of the Act, he bears the burden of proving the binding nature of the agreement (see Hoult & Hoult (2013) FLC 93-546 (“Hoult”) at [60]-[62], [249], [254]; Logan & Logan (2013) FLC 93-555 (“Logan”) at [44]-[45], [49]-[50]).
Section 90G(1) of the Act stipulates the mandatory requirements for an agreement to be binding but, because the section has been amended over time, it is important to identify the iteration in which it stood at the time of the relevant agreement. For the period encapsulating the dates upon which both parties executed the agreement, s 90G(1) relevantly provided:
(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.
…
The parties agreed all but one of those pre-requisites was fulfilled: they signed the agreement; they were each provided with a signed statement by their respective solicitor stating they were provided with the requisite independent advice; copies of those signed statements were exchanged; and the agreement has not been terminated or set aside. The single point of conflict concerning the binding nature of the agreement was the sufficiency of the independent legal advice provided to the wife (s 90G(1)(b)).
The wife consulted Ms DD to receive the requisite independent legal advice about the agreement. The certificate of independent advice provided by Ms DD and the recital within the agreement of the wife’s receipt of such advice (Recital F), on their face, satisfied the requirements of s 90G(1)(b) and so the husband thereby discharged his burden of proving compliance with the Act (see Hoult at [101], [279]). Accordingly, the evidentiary burden falls to the wife to demonstrate some deficiency in the nature of the advice she received from Ms DD (see Hoult at [62]-[63], [249], [254]; Logan at [45], [49]-[50]).
The wife pleaded in her Amended Points of Claim that Ms DD’s independent legal advice was deficient because of her failure to:
(a)advise the wife about her rights under the agreement or the advantages and disadvantages to her of the agreement;[20]
(b)identify and correct the omission from the agreement of the parties’ existing liabilities;[21] and/or
(c)ascertain whether the wife was in a position of vulnerability, with unequal bargaining power, or subject to undue influence.[22]
[20] Amended Points of Claim filed 6/9/19, para 6.1.1
[21] Amended Points of Claim filed 6/9/19, para 6.1.3
[22] Amended Points of Claim filed 6/9/19, para 6.1.4
The wife’s evidence covered wider ambit, but she should be confined to the case as pleaded, particularly since her failure to adhere to her pleadings caused the first trial in August 2019 to be vacated. The wife asserted in evidence that:
(a)Ms DD did not write to her confirming the advantages and disadvantages of the draft agreement before their meeting on 20 December 2010, when she signed the agreement;[23]
(b)her personal conference with Ms DD on 20 December 2010 lasted between 20 and 30 minutes and involved only a “simple discussion”;[24]
(c)her “recollection” was that the advantages and disadvantages of the draft agreement were not discussed in that conference;[25]
(d)she was not “provided the opportunity” to explore amendment of the draft agreement;[26]
(e)Ms DD did not ask her whether she was under any pressure, coercion or duress to execute the agreement;[27]
(f)Ms DD did not identify the omission of any liabilities from the terms of the draft agreement;[28]
(g)Ms DD failed to identify that the husband’s ex-wife was still “listed as a default beneficiary in the family trust deed”;[29]
(h)Ms DD did not take her through the documents with which she was furnished as background to the draft agreement;[30] and
(i)Ms DD did not encourage her to take time to consider the agreement in light of the advice she received in their meeting on 20 December 2010 before signing it.[31]
[23] Wife’s affidavit filed 24/6/19, para 28
[24] Wife’s affidavit filed 24/6/19, para 29
[25] Wife’s affidavit filed 24/6/19, para 30
[26] Wife’s affidavit filed 24/6/19, para 31
[27] Wife’s affidavit filed 24/6/19, para 32; Wife’s affidavit filed 18/10/19, para 7
[28] Wife’s affidavit filed 24/6/19, para 33; Wife’s affidavit filed 18/10/19, para 8
[29] Wife’s affidavit filed 24/6/19, para 34; Wife’s affidavit filed 18/10/19, para 9
[30] Wife’s affidavit filed 18/10/19, para 10
[31] Wife’s affidavit filed 24/6/19, para 35; Wife’s affidavit filed 18/10/19, para 10
Ms DD was called by the husband as a witness to refute the wife’s assertions about the insufficiency of her independent advice. The wife was well aware of the client legal privilege she enjoys in her confidential communications with Ms DD,[32] but the privilege was exclusively the wife’s to relinquish. The point was not argued by the parties but, given the wife’s willingness to give evidence about and criticise the content of the advice she received from Ms DD, the client legal privilege she enjoyed in the solicitor/client conversations was most probably waived (s 122 of the Evidence Act 1995 (Cth)). Following such waiver, it was permissible for the husband to call Ms DD to respond to the wife’s version of their private discussions. The wife said she tried unsuccessfully to contact Ms DD,[33] presumably for corroboration of her evidence, and the husband even tried to help her.[34] Since Ms DD was called by the husband as his witness, the wife was free to cross-examine her and was not disadvantaged.
[32] Wife’s affidavit filed 26/7/19, para 13
[33] Wife’s affidavit filed 24/6/19, para 36; Wife’s affidavit filed 26/7/19, paras 11-12
[34] Exhibit H1, Tab 24
The effect of Ms DD’s evidence, in conjunction with other documents in evidence, was that:
(a)She received a “large bundle” of documents to review before meeting with the wife to advise her on the draft agreement, which she read;[35]
(b)She discussed the draft agreement with the wife at least once before their meeting on 20 December 2010 when the wife signed the agreement, since their discussion of it prior to 4 November 2010 resulted in her advice and the wife’s instructions to have the draft agreement amended;[36]
(c)She does not recall asking the wife whether the draft agreement fully disclosed the parties’ assets and liabilities, but it was her practice to always do so;[37]
(d)It was her practice to explain the process by which a court decides property settlement disputes under Part VIII of the Act and to contrast that with the ouster of the court’s jurisdiction by the binding financial agreement, the terms of which govern resolution of the parties’ financial affairs;[38]
(e)She has no “recollection” of the wife telling her she felt coerced or of the wife signalling that she was unhappy about the draft agreement, though it was her practice to be alert to those possibilities and she did not entertain any such suspicion;[39]
(f)She provided “legal advice” to the wife in relation to the agreement,[40] which was verified at the time by her certifying she advised about the effect of the agreement on the wife’s rights and on the advantages and disadvantages of the wife making the agreement,[41] and the wife executed the agreement in which she acknowledged she received advice to that effect (Recital F); and
(g)She rendered a tax invoice to the wife in the sum of $1,000 for her fees in advising the wife on the agreement,[42] which she said amounted to between three and four hours work in all.
[35] Ms DD’s affidavit, paras 2, 4; Exhibit H1, Tab 17
[36] Exhibit H1, Tab 19; Ms DD’s affidavit, para 14
[37] Ms DD’s affidavit, para 5
[38] Ms DD’s affidavit, paras 6, 7
[39] Ms DD’s affidavit, para 8
[40] Ms DD’s affidavit, paras 9, 15, 19;
[41] Exhibit H1, Tab 1, page 40; Ms DD’s affidavit, para 17
[42] Exhibit W2, T ab A
In reality, there is very little conflict, if any, between the evidence of the wife and Ms DD. Neither gave evidence of the actual conversation between them, which is unsurprising when their conversations were about nine years ago. They each relied upon their eroding memory. At the time of their meeting on 20 December 2010, Ms DD certified she advised the wife, consistently with her practice of doing so, about the effect of the agreement upon her and the advantages and disadvantages of her entry into the agreement. The wife did not deny it. She only said she has no recollection of it now, so her evidence did not contradict either the content of Ms DD’s certificate or Ms DD’s evidence of her expectation of compliance with her usual practice to give legal advice which corresponded with the description in her certificate.
While the wife’s meeting with Ms DD on 20 December 2010 might not have exceeded 30 minutes in duration, Ms DD spent about another three hours familiarising herself with the draft agreement and the background documents so she could independently advise the wife about the agreement. Such work led to Ms DD recommending an amendment to the draft agreement in November 2010 and the agreement was then amended, as proposed, before the wife executed it in final form.
While Ms DD perceived no reluctance on the wife’s part to enter the agreement, she did not directly ask the wife if she was reluctant and the wife did not volunteer she was. In any event, the wife’s alleged reluctance to sign the agreement pertains to her claims of duress, undue influence, and unconscionable conduct by the husband, which are yet to be addressed. Those claims do not reflect upon the quality or sufficiency of Ms DD’s independent legal advice for the purpose of meeting the requirements of s 90G of the Act. The Act deems the agreement to be binding if the wife is advised about the effect of the agreement on her rights and also about the advantages and disadvantages of her entry into the agreement (s 90G(1)(b)).
Similarly, the wife’s claims she suffered from unequal bargaining power[43] and had no time for “careful reflection” before signing the agreement[44] are not complaints which impugn the quality or sufficiency of the independent legal advice she received for the purposes of compliance with s 90G(1)(b) of the Act. Those claims fall for consideration as part of the wife’s application to set the agreement aside for undue influence or unconscionable conduct.
[43] Amended Points of Claim filed 6/9/19, para 6.1.4
[44] Amended Points of Claim filed 6/9/19, para 6.1.2
Although the wife alleged Ms DD failed to alert her to the fact that the husband’s ex-wife was still “listed as a default beneficiary in the family trust deed”, the allegation of such failure to advise is futile if the wife fails to prove the underlying fact. Aside from the wife’s bare assertion,[45] which the husband refused to admit, there is no evidence that his ex-wife was still a beneficiary (of any particular type) under the family trust at the time the parties executed the agreement. The wife admitted there was no evidence to prove the fact. Even if the fact had been proved, the wife failed to explain how it was a disadvantage to her under the agreement, in which case the failure to draw it to her attention did not vitiate Ms DD’s independent legal advice. There were, and still are, numerous beneficiaries under the family trust. As the wife was impelled to admit, from a point in time well before the parties executed the agreement, she and the husband were the joint directors and equal shareholders of the corporate trustee[46] and the appointors of the family trust.[47] She has had as much power and control over the trust and its corporate trustee as the husband. No beneficiary of the trust can be favoured with a distribution without her consent and no provision of the agreement diminished her equal control over the trust.
[45] Wife’s affidavit filed 24/6/19, para 34
[46] Exhibit H3; Exhibit H1, Tab 9
[47] Exhibit H1, Tabs 11, 13, 14, 17
The wife’s allegation that Ms DD failed to identify the omission from the draft agreement of the parties’ liabilities proved to be false. There were none, apart from a mortgaged loan which was disclosed in the agreement. The wife’s assertion that the agreement did not deal with the parties’ existing liabilities assumes the parties were actually liable to one or more creditors, jointly or severally, at the time the agreement was struck. The assumption was wrong and the wife’s evidence was incorrect for the following reasons, which she eventually accepted during her final submissions.
The wife deposed that, following the parties’ final separation in June 2015, she noticed that some liabilities which existed when the agreement was made were not covered by the terms of the agreement.[48] More specifically, the liability she identified was debt due to the W Bank, secured by mortgages,[49] which debt was later increased in April 2011 and re-financed in 2014.[50] The husband, on the other hand, asserted any liabilities which existed when the agreement was struck were, in fact, the liabilities of the corporations or trusts in which the parties had an interest and such liabilities were factored into the values ascribed to the corporations and trusts disclosed in Schedule 1 to the agreement.[51]
[48] Wife’s affidavit filed 24/6/19, paras 22, 25, 28, 33
[49] Wife’s affidavit filed 24/6/19, paras 23, 33; Exhibit W1, Tab 5
[50] Wife’s affidavit filed 24/6/19, paras 41-45; Exhibit W1, Tabs 9, 10, 11
[51] Husband’s affidavit filed 12/7/19, paras 38, 69
The wife admitted, inferentially in her affidavit[52] and expressly during her cross-examination, that the existing debt was indeed owed by E Pty Ltd to the W Bank. The parties’ personal liabilities to the W Bank did not arise until the re-finance in 2014. The husband was therefore proven correct. The wife’s pleading that “the parties” entered into the loan with the W Bank in December 2009 was wrong.[53] Save for the mortgage mentioned below, there is no evidence the parties had any other personal debt at the time the agreement was executed.
[52] Wife’s affidavit filed 26/7/19, para 36
[53] Amended Points of Claim filed 6/9/19, para 19
The wife undoubtedly owed money to a mortgagee in respect of a parcel of property in which she held exclusive legal title.[54] However, both the property and the mortgaged loan were disclosed in Schedule 1 to the agreement.[55] It was common ground the wife later sold the property. While the agreement required that the net proceeds of the sale be divided equally between the parties (clauses 11 and 12), they were not. The wife deposed how she applied the net proceeds of sale towards the purchase of another property[56] and, while the husband alleged the wife appropriated the net proceeds,[57] he did not contend the wife’s breach of the agreement affected the controversy currently before the Court.
[54] Husband’s affidavit filed 12/7/19, para 65; Exhibit H1, Tab 28
[55] Item 1.2
[56] Wife’s affidavit filed 26/7/19, para 26
[57] Husband’s affidavit filed 12/7/19, para 65; Exhibit H1, Tab 28
It follows that the wife failed to establish any of the three grounds upon which she pleaded the deficiency of the independent legal advice she received from Ms DD in advance of signing the agreement.
She also failed to establish her subsidiary claim that the agreement is not binding on account of its alleged omission of personal liabilities.[58] Even if personal liabilities did exist and were omitted from the agreement, the wife failed to explain how that would deprive the agreement of its binding quality under s 90G of the Act instead of bearing only upon the alternate question of its enforceability.
Should the agreement be set aside?
[58] Amended Points of Claim filed 6/9/19, paras 6.2, 20
Duress
The wife pleaded the agreement was vitiated by duress, undue influence, and unconscionable conduct, though the factual premise of each ground differed. As the High Court has said, the foundational facts upon which an applicant relies for relief must be closely scrutinised to determine which, if any, of those doctrines apply to vitiate the subject agreement (Thorne v Kennedy (2017) 263 CLR 85 (“Thorne”) at [41]-[43]).
To establish duress, the wife had to prove she was the subject of threatened or actual unlawful conduct, which applied illegitimate pressure upon her and caused her to capitulate and execute the agreement against her better judgment (Thorne at [26]-[29], [57]; Australia & New Zealand Banking Group v Karam (2005) 64 NSWLR 149 at [66]).
Although she expressed it in a variety of ways, in essence, the wife contended the relevant unlawful conduct which vitiated her voluntary entry into the agreement was the threat of her assault or intimidation if she did not do so.
There was no evidence of the husband making any express threat to assault or intimidate the wife if she refused to enter the agreement, but there was no need for it since the threat of unlawful conduct may be implied and need not be express. However, if implied, the implication must be objectively reasonable (see Hawker Pacific Pty Ltd v Helicopter Charter Pty Ltd (1991) 22 NSWLR 298 at 301-303). Subjective belief in the existence of the implied threat, no matter how genuine, will not suffice if the threat cannot be objectively and reasonably discerned.
Although not articulated in these precise terms, it may reasonably be imputed the wife’s case was that her fear of being assaulted or intimidated if she declined to execute the agreement on the husband’s terms was reasonably implied from her past violent treatment by him. Against that history, she apprehended some form of physical or psychological retribution or reprisal if she prevaricated about executing the agreement.
The wife deposed (allowing for those parts rejected after successful objection):[59]
I did not feel free to refuse to sign the agreement nor initiate a request for significant amendments without fear of retribution from [the husband]. Moreover I felt pressure to sign an agreement that, as presented to me, would serve to reduce or eliminate conflict that may arise between [the husband] and I should we separate, without proper consideration of my interests and the freedom to seek amendments without fear of reprisal from [the husband].
(Emphasis added)
[59] Wife’s affidavit filed 24/6/19, para 40
The wife deposed how her fear arose in this way:[60]
During the course of our marriage I was regularly subjected to incidents of family violence commencing as early in our relationship as 2006, inclusive of physical violence and psychological abuse.
[60] Wife’s affidavit filed 24/6/19, para 14
Clearly enough, such evidence was merely an expression of the wife’s perceptions, which served her interests in the litigation and was difficult to objectively test. It was liable to carry limited probative weight in isolation from primary facts about what she saw, what she heard, and what was done to her. Much like the situation in Saintclaire & Saintclaire (2015) FLC 93-684 (“Saintclaire”) at [24], though the Full Court was there referring to pleadings and particulars rather than to evidence, the wife’s evidence was unparticularised, undated, and temporally unconnected to the agreement she signed in December 2010, meaning it was of little, if any, assistance to her case.
The factual evidence which the wife did adduce, from which her alleged fear of retribution or reprisal might be implied, may be accurately summarised as follows.
On an occasion “within the first few years” of the parties’ relationship, they attended a social function in Melbourne during which the husband allegedly angrily remonstrated with the wife, grabbed her by the shoulders, forcefully shook her, shouted in her face, and then punched her in the stomach. The next day, the wife confronted him about the incident, “stood [her] ground”, and “firmly” told the husband his behaviour was unacceptable.[61] In passing, it may be observed the wife had the fortitude to remonstrate with the husband and not meekly submit to him, at least on that occasion.
[61] Wife’s affidavit filed 30/4/19, paras 25-30
There were allegedly other incidents of abusive conduct between the parties, but the only other incident the wife particularised occurred sometime in 2010. On that occasion the parties argued and the husband made derogatory remarks towards her. She retreated to the bedroom, but the husband kicked the door in so the argument could continue. The wife then left the house and drove away in her car to avoid further confrontation, but the husband pursued her in his car and demanded she return home, which she then did.[62]
[62] Wife’s affidavit filed 30/4/19, paras 42-48
The husband denied all of the wife’s allegations of family violence and so the parties’ evidence on the issue was irreconcilable. While there might be room for honest differences of opinion about the severity of and the responsibility for their voluble and heated arguments, there was no such room for them to manoeuvre over the wife’s two core complaints of actual physical violence.
The trial of these proceedings in November 2019 post-dated the commencement of operation of Division 4, Part XI of the Act on 10 September 2019, following enactment of the Family Law Amendment (Family Violence and Cross-examination of Parties) Act 2018 (Cth). Given the wife’s allegations of family violence against the husband and her lack of legal representation in these proceedings, the question arose as to whether s 102NA of the Act applied so as to automatically preclude her personal cross-examination of the husband. It was common ground that none of the first three pre-requisites of s 102NA(1)(c) were engaged and so no embargo applied to prevent the wife’s cross-examination of the husband under s 102NA(1) of the Act. The wife cross-examined the husband without reluctance or difficulty on many issues of fact for nearly two hours. When reminded of the claim of her execution of the agreement under duress due to the alleged history of family violence and that she had not yet covered the contested allegations of family violence in cross-examination, the wife expressed her reluctance to confront the husband about those disputed allegations.
Although the automatic embargo upon the wife’s personal cross-examination of the husband did not apply, the Act still vests the Court with residual discretion to impose, by procedural order, the same embargo upon an unrepresented party’s cross-examination of the other party in proceedings involving allegations of family violence between them, if persuaded to do so (s 102NA(1)(c)(iv)). The wife did not seek such an order. Although one could still have been made, there was no apparent reason for the Court to act voluntarily (s 102NA(3)).
The wife declined to avail herself of numerous alternative strategies offered to ameliorate her discomfort. She did not wish to adjourn the trial to explore the prospect of her engagement of a legal representative to cross-examine the husband about the disputed allegations of family violence at a later time. Nor did she wish to cross-examine the husband by video-link or telephone link from another court room. Nor did she want to cross-examine him in the same court room with a screen placed between them. In the circumstances, no measure was imposed by procedural order to regulate her further cross-examination of the husband (s 102NB). None was sought. The wife affected her disinterest in any further cross-examination.
The failure to test the evidence about family violence was mutual. Not only did the wife not cross-examine the husband; his counsel did not cross-examine her. The husband abstained from cross-examination of the wife on the topic of family violence when his counsel must have known the repercussions of that forensic choice (see Browne v Dunn (1893) 6 ER 67; Kuhl v Zurich Financial ServicesAustralia Ltd (2011) 243 CLR 361 at 387-388), even though the inference usually arising from such abstention applies much more flexibly in this jurisdiction (see LC v TC (1998) FLC 92-803 at [38]-[39]).
But for concessions made by the husband’s counsel in final submissions, the failure by each party to cross-examine the other at all about the disputed allegations of family violence would have hampered any factual findings. The husband’s counsel conceded it was properly open, in the circumstances, to find the wife was treated by the husband in the manner she alleged on those occasions, and further, to infer such adverse experiences would be remembered by her and such memories might shape her behaviour in dealings with the husband.
Given such concessions, it is safe to find that the husband was physically violent towards the wife during the incident in Melbourne at the beginning of their relationship and that, during the later incident in 2010, he was physically aggressive and frightening, though not physically abusive to the wife. Notably, the wife alleged she took photographs of the bedroom door allegedly destroyed by the husband in 2010. Any challenge to her about the truth of that assertion in cross-examination may have resulted in her production of the photographs, to the husband’s consequent disadvantage.
However, proof of the husband’s violent conduct on those two past occasions is not dispositive of the central question of whether the agreement the parties later executed was vitiated by duress. Although the husband’s counsel conceded it was open to infer the wife might have shaped her behaviour in light of her past experiences with the husband and she might, therefore, have been wary about her negotiations with him, he contended other objective and incontrovertible evidence gave rise to a much stronger inference that the wife was acting free of any duress when she decided to negotiate and enter into the agreement.
The wife bore the burden of demonstrating a causal nexus between the past family violence and her alleged duress by the implied threat of reprisal – years after the first incident and months after the second. Most probably, as the husband submitted, such violence as was perpetrated by him upon and in the presence of the wife was not such as to cause her to execute the agreement in December 2010 under duress. Such finding is the product of the following facts and circumstances.
To begin with, the wife’s evidence was internally inconsistent. The success of her case of duress hinged upon proof of her feeling impelled by the threat of the husband’s physical abuse to sign the agreement against her wishes, but she contrarily admitted she was “highly motivated” to achieve an agreement to eliminate, or at least reduce, the prospect of conflict within their family or with the husband’s ex-wives and other children in the event of their marital separation or the husband’s death.[63] It is difficult, if not impossible, to reconcile the wife’s admitted eagerness to enter the agreement with her alleged reluctance to do so.
[63] Wife’s affidavit filed 24/6/19, paras 20, 21; Wife’s affidavit filed 26/7/19, para 8
While duress need not be the sole or principal cause of a party’s reluctant entry into a contract, it must at least be an influential factor. On the balance of probabilities, it was not. The wife’s desire to achieve the agreement was the singular influential reason for her execution of it. Her motivation to achieve the agreement for her own perceived benefit is evident from her integral involvement over a prolonged period in its conception, negotiation, amendment, and eventual execution, which involvement collectively tends to discount the effect of any implied improper pressure exerted by the husband’s unlawful conduct as an influential factor in her decision to enter into the agreement.
While the parties may now have different recollections about it, the process of preparing documents to implement their dual objective of a succession plan and an agreement about the division of their property in the event of their marital separation certainly began sometime in early 2008, shortly after they built and started the operation of the new business they controlled through their corporate and trust entities. The wife instructed the parties’ solicitors to prepare a draft agreement in November 2008, referring back to an initial consultation about it in May 2008.[64] The wife could not recall having done so in cross-examination but, when confronted with the email, she conceded she must have sent those instructions.
[64] Husband’s affidavit filed 12/7/19, para 9-10; Exhibit H1, Tabs 2, 3
The first draft of the agreement under Part VIIIA of the Act was produced to the parties by their solicitors in January 2009.[65] The solicitors chased the parties for a response in May 2009 and the wife replied by email telling the solicitors the parties were “still working on this”.[66] For several months thereafter, the parties appeared to be working with their accountants and solicitors to organise the affairs of the elaborate corporate and trust structure they created.[67] The wife admitted in cross-examination she met numerous times alone with the solicitors and accountants and, further, she did not challenge the husband’s evidence that she collated and provided many of the documents they required.[68]
[65] Husband’s affidavit filed 12/7/19, para 10; Exhibit H1, Tab 3
[66] Husband’s affidavit filed 12/7/19, para 11; Exhibit H1, Tab 4
[67] Exhibit H1, Tabs 5-9
[68] Husband’s affidavit filed 12/7/19, paras 15, 18
The second draft of the agreement was produced to the parties by their solicitors in January 2010.[69] The husband deposed he left the matter in the wife’s hands,[70] which seems correct because she emailed the solicitors in June 2010 seeking confirmation that certain changes to the corporate and trust structure had been implemented.[71] That enquiry stimulated more collaborative work between the solicitors and the accountants.
[69] Husband’s affidavit filed 12/7/19, para 27; Exhibit H1, Tab 10
[70] Husband’s affidavit filed 12/7/19, para 28
[71] Exhibit H1, Tab 11
The third draft of the agreement was produced to the parties by their solicitors in July 2010.[72] The wife emailed the solicitors in August 2010 telling them the agreement “looks fine”.[73]
[72] Husband’s affidavit filed 12/7/19, para 32; Exhibit H1, Tab 14
[73] Husband’s affidavit filed 12/7/19, para 34; Exhibit H1, Tab 15
The parties’ solicitors then advised them to make individual appointments with other solicitors to receive independent legal advice about the draft agreement.[74] The husband alleged, without contradiction, that the wife arranged to consult Ms DD and made an appointment for him to see Ms FF.[75] The wife admitted in cross-examination she could not remember, but probably did book the appointments for the parties.
[74] Husband’s affidavit filed 12/7/19, para 36; Exhibit H1, Tab 14 (page 90); Exhibit W1, Tab 6
[75] Husband’s affidavit filed 12/7/19, para 37
As earlier recorded, the wife conferred with Ms DD on one occasion before 4 November 2010, which resulted in the wife’s request for an amendment to the draft agreement being made. After receipt of Ms DD’s legal advice in a final consultation on 20 December 2010, the wife elected to sign the agreement.
As can be seen, the wife’s execution of the agreement in its final form in December 2010 was the culmination of a process of gradual evolution over a period of close to three years, beginning in May 2008.
All the while, the wife was the manager of a business in which the husband worked as a health professional. They built the business together, bringing it to fruition in late 2007. The wife said in cross-examination she managed the project. She had primary control over the day-to-day operation of the parties’ business affairs. She was installed as a joint director and shareholder of E Pty Ltd in 2009, which corporation operated the business on behalf of the family trust and was effectively at the apex of the business structure. She was also installed as a joint appointor of the family trust and was made a beneficiary of it. She also acquired an interest in a new self-managed superannuation fund, of which she and the husband were and remain the only beneficiaries, as well as the equal shareholders in and joint directors of its corporate trustee. The superannuation fund invested in another unit trust which owns the commercial premises from which the business is operated. E Pty Ltd is the corporate trustee of both the unit trust and the family trust. The wife acquired all of those interests and positions well before the agreement was executed. She confidently dealt with the parties’ business and legal advisers, often alone, to achieve those positions and roles in that economic empire and, displaying considerable business acumen, she kept it all running efficiently.
Although the wife contended in her affidavit in reply that at least some of those facts could be seen in a different “context”,[76] none of the facts summarised above was the subject of any direct dispute by her and she failed to persuade that some different context of her will being overborne by the husband was to be inferred. The wife failed to prove she was acting under duress when she signed the agreement in December 2010.
[76] Wife’s affidavit filed 26/7/19, para 4
Undue influence
Application of the doctrine of undue influence may be proven by either direct evidence or presumption (Thorne at [34] - [36], [84]). By reference to the wife’s final submissions, she tried to engage the doctrine either way.
Although the categories of the “particular relationship” to which the doctrine presumptively applies are not closed, marriages and marriage-like relationships are not among them (Thorne at [34]; Saintclaire at [14]). The wife’s submission that the doctrine applied presumptively in her favour in this case, thereby imposing the burden upon the husband to rebut it, is rejected. It follows that the burden rested with the wife to prove the husband’s undue influence upon her to execute the agreement.
The doctrine of undue influence has broad coverage and its intersection with the doctrine of duress is blurred (Thorne at [30], [83]). It does not require the exertion of pressure upon the subject party which is illegitimate or improper (Thorne at [30]), but it does require proof that the judgmental capacity of the party seeking relief was “markedly sub-standard” as a result of the effect upon that person’s mind by the will of another (Thorne at [32]). Stated another way, the wife needed to prove she was unable to make “clear, calm or rational decisions” about the agreement, free of influence exerted upon her by the husband (Thorne at [59], [87]).
Application of the doctrine of undue influence to the evidence is not an exercise of mathematical precision; questions of degree are involved (Thorne at [32], [62], [91], [95]). In the case of matrimonial agreements, the indicia of undue influence for which the High Court suggested the evidence should be searched are the opportunity for negotiation, the emotional circumstances in which the agreement was entered, whether threats of one kind or another were made, whether there was time for careful reflection, the parties’ relative financial positions, the receipt of independent advice, and the time available to reflect on that advice (Thorne at [60]).
Without repeating the findings already made, a summary of them will suffice: the wife was motivated to achieve the agreement; she was instrumental in its evolution through several different iterations over a period of more than two years; it was amended again at her instigation before execution; by the time the agreement was executed she had just as much control as the husband over their corporate and trust structure; she had years to contemplate entry into the agreement and her commitment to its achievement never wavered; and she received adequate independent legal advice about the agreement. Although the wife contended she had no time for “careful reflection” following her receipt of the legal advice, it cannot escape attention she signed the agreement some six weeks before the husband and she did not seek to resile from it during that interim period. She had plenty of time to reflect upon it.
There was no evidence from which to reasonably infer the wife’s decision to enter into the agreement was other than completely free and voluntary. She failed to establish she entered the agreement due to the husband’s undue influence. For abundant caution, had the presumption of undue influence applied in the wife’s favour, the facts as set out would have rebutted the presumption.
Unconscionable conduct
Again referring to Thorne, The doctrines of unconscionable conduct and undue influence are distinct, though the two doctrines may be engaged by the same facts (Thorne at [39], [40], [86], [94], [115]).
A conclusion of unconscionable conduct requires the innocent party to be the subject of special disadvantage which seriously affects that person’s ability to make a judgment about his or her best interests, of which special disadvantage the other party unconscientiously takes advantage, though not necessarily unlawfully (Thorne at [38], [74], [110]). The “special disadvantage” required for that purpose is impossible to identify exhaustively, but it must “seriously affect” the weaker party’s ability to safeguard their interests and requires more than a mere difference in bargaining power (Thorne at [64], [113]).
What then, it may be asked, was the wife’s alleged “special disadvantage”? She pleaded it was her economic dependence upon the husband, his greater commercial experience, his greater knowledge of family law, his greater familiarity with their business advisers, the inequality of their bargaining power, and her subjection to the husband’s violent and disrespectful behaviour. None of those contentions, either individually or in combination, are accepted as aptly characterising her predicament as being one of special disadvantage.
Her submission of economic dependence on the husband is rejected. She was just as important as the husband to the conduct of the business, which business was at the centre of their economic interests. In fact, she still operates the business alone following the husband’s departure from it, which vindicates her resilience and financial independence. The evidence shows those qualities were no less evident in the wife when she signed the agreement as they are now.
The evidence did not demonstrate the husband had greater commercial experience than the wife but, even if he actually did, it did not mean her own commercial experience was so lacking that it caused her to be at special disadvantage. They both demonstrated considerable commercial experience well in advance of the wife’s execution of the agreement in December 2010. In addition, by the time the wife executed the agreement in December 2010, she was as well familiar with the parties’ business advisers as the husband.
There was no evidence at all to establish the husband had more experience than the wife in family law litigation – certainly not such as to place her at special disadvantage.
The wife’s submissions of her vulnerability and of her inferior bargaining power are rejected. Mere inequality of bargaining power, even if she had proved it, does not manifest special disadvantage and is not enough to “seriously affect” her capacity to protect her own interests (Thorne at [64], [113]).
To the extent that the wife either expressly or impliedly relied upon her past victimisation by the husband’s violent and disrespectful treatment to make good on her argument of his unconscionable conduct, her submission is rejected. The nature of the family violence to which she was probably subjected did not place her in a position of special disadvantage. Such a finding does not trivialise family violence or the effects of family violence upon the victims of it. Factual allegations of family violence, regardless of the type of litigation in which they are made, must be assessed in the context of the legal issues requiring decision. For present purposes, it cannot be correct that the finding of some form of family violence occurred must necessarily mean that any subsequent legal dealings by the wife, as the victim of it, with the husband, as the perpetrator of it, are void or voidable. Any conclusion must rest with application of the factual findings to the legal doctrines sought to be invoked.
Here, the facts failed to prove the wife’s asserted vulnerability and special disadvantage, for any of the reasons she contended, when she engaged in negotiations with the husband about their future financial circumstances.
The wife’s ability to protect her own interests was not otherwise afflicted by illness, ignorance, inexperience, impairment, financial need, or strong emotional dependence upon or attachment to the husband, which the High Court identified as salient, though not exhaustive, considerations (Thorne at [113]).
It must follow that, if the wife was not subject to some special disadvantage, then it was impossible for the husband to have unconscionably taken advantage of her. However, even if she was at some special disadvantage, the evidence did not prove that any aspect of the husband’s conduct, in so far as it related to the preparation of the agreement and the wife’s execution of it, constituted him taking unconscionable advantage of her inferior position.
Liabilities
The wife originally asserted the agreement did not deal with the parties’ existing liabilities, which contention she abandoned during final submissions. The error of her original contention has already been explained.
However, the wife did not abandon her contentions that the agreement is now void or impracticable to implement because it failed to take into account future debts the parties might and have since incurred. The wife’s pleading in relation to the liabilities was that, because the agreement does not contemplate them, there was a “failure of consideration” and so the agreement should be declared void ab initio pursuant to ss 90K(1)(aa)(ii) or 90K(1)(b) of the Act,[77] or alternatively, set aside because it is now impracticable to implement.[78]
[77] Amended Points of Claim filed 6/9/19, para 20
[78] Amended Points of Claim filed 6/9/19, para 29
The wife correctly observed the agreement failed to deal with the distribution between the parties of any debt they incurred, either jointly or severally, during the remainder of their marriage or after their divorce. But that begs questions about what liabilities they now have, why the omission of them invalidates the agreement, and why the existence of such liabilities now makes it impracticable for the agreement to be implemented.
The evidence about the parties’ current liabilities was quite scant.
First, the wife deposed to the debt owed jointly by the parties to the receivers and managers who were appointed during these proceedings.[79] But they are costs connected to the conduct of the litigation and orders either have been,[80] or will likely be,[81] made about the parties’ liability for the payment of such costs. The parties’ decision to incur costs associated with the conduct of litigation under the Act surely cannot render it impracticable for the agreement to be implemented, for otherwise every Part VIIIA agreement would be susceptible to a declaration setting it aside for impracticability simply by the party challenging the agreement incurring the cost of litigating the agreement’s enforceability. That would be absurd. The wife did not willingly incur the receivers’ costs, because she opposed their appointment by the orders made in May 2018, but such costs are incidental to orders made during the currency of the dispute in which the wife is a willing party.
[79] Wife’s affidavit filed 24/6/19, paras 86-90; Wife’s affidavit filed 18/10/19, paras 14-17
[80] Wife’s affidavit filed 26/7/19, para 37
[81] Application in a Case filed by receivers on 28/10/19
Secondly, in February 2019, judgment was entered against the parties in the Supreme Court of NSW in favour of the W Bank in reliance upon their personal loan of $300,000 and their personal guarantees of E Pty Ltd’s financial performance.[82] They are jointly and severally liable for $685,925, together with any accrued interest.[83] Apparently, the debt remains outstanding and the W Bank has held off executing the judgment pending the decision in these proceedings.
[82] Exhibit W1, Tab 11
[83] Husband’s affidavit filed 12/7/19, para 51; Wife’s affidavit filed 24/6/19, para 90; Exhibit W1, Tab 25
Thirdly, the wife adduced evidence of other personal loans totalling $54,866, as at November 2017, but there was no evidence as to whether the debtor/s is or are her, the husband, or both of them.[84] Nor did the evidence reveal whether those debts have been enlarged, diminished, or discharged in the last two years.
[84] Wife’s affidavit filed 24/6/19, para 83; Exhibit W1, Tab 22
Having identified the liabilities incurred by the parties after they executed the agreement, it is necessary to analyse the wife’s claims about them.
Section 90K(1)(aa)(ii) of the Act provides that an order may be made to set the agreement aside if a party to the agreement entered into it with reckless disregard of the interests of a creditor of that party. The wife did not submit she entered the agreement with any such reckless disregard for the interest of a creditor, so she must have been directing the allegation at the husband. However, as has been explained, save for a loan owed by the wife which was secured by mortgage over real estate of which she was the sole legal owner (which property she has since sold and used the net proceeds of sale), neither party had any creditors when they entered the agreement. Their personal debts arose afterwards, in which case s 90K(1)(aa)(ii) is not engaged.
Section 90K(1)(b) of the Act provides that an order may be made to set the agreement aside if the agreement is void, voidable or unenforceable. The wife’s pleading – that the failure of the agreement to govern how the parties’ future debts would be borne between them upon their separation thereby amounted to a “failure of consideration” which rendered agreement void ab initio – was not elaborated in any meaningful way by reference to legal principles. It was a bare contention which is rejected. The parties’ mutual forbearance from resort to Part VIII of the Act for relief in the event of their separation was the consideration they each gave for entry into the agreement. The failure of the agreement to address a future possibility, namely the accrual of a liability, had no bearing upon the consideration given by the parties for their contract.
The wife’s final contention of impracticability was presumably intended to invoke the operation of s 90K(1)(c) of the Act, which provides that an order may be made to set aside the agreement if it is impracticable to carry out by reason of circumstances that have arisen since the agreement was struck. The personal debts to which the wife referred certainly arose after the agreement was struck, but she failed to satisfactorily explain how the existence of those debts now makes it impracticable for the agreement to be carried out. If implemented, the parties would each take their share of the assets in accordance with the provisions of the agreement and they would each bear liability, according to law, for the debts they incurred after they entered the agreement. Without more elaboration by the wife, nothing more can usefully be said in response.
The joint and several liability the parties now bear to the W Bank can be enforced by the judgment creditor in any way it sees fit, but that does not make it impracticable for the agreement to be carried out as between the parties. Regardless of whether the parties’ property is divided under the agreement or by subsequent order made under Part VIII of the Act (if the agreement is set aside), the judgment creditor will maintain keen interest in their real and personal property until the judgment debt is satisfied. Consequently, setting aside the agreement and instead resolving the parties’ financial affairs under Part VIII of the Act is no more practicable an outcome.
The judgment creditor holds security in the form of registered mortgages over several parcels of real estate jointly owned by the parties and over one other parcel of land owned solely by the husband.[85] The agreement makes provision for those parcels of real estate to be either transferred into the sole name of the husband (clause 9), transferred into the sole name of the wife (clause 10), or sold and the net proceeds of sale divided equally between the parties (clauses 11 and 12). It is possible the judgment creditor could obstruct the registration of such transfers of the parties’ proprietary interests in those properties under the Real Property Act 1900 (NSW), but that potentiality does not render the agreement’s implementation impracticable. Such obstruction by the judgment creditor seems improbable because, if the transfers were registered, the parties would then still hold full legal interest in the properties, albeit in different permutations, and the judgment creditor would still hold registered first mortgages over the properties, in which event its security is just as strong. Besides, the possibility of the judgment creditor’s obstruction is not lessened by setting aside the agreement and then enabling the parties to litigate their claims for property settlement relief under Part VIII of the Act. Any orders made under s 79 of the Act for the transfer of the properties between the parties would encounter the same problem.
[85] Exhibit W1, Tab 11
In any event, such analysis risks missing the point. The question is whether it is now impracticable to carry out the agreement; not whether it’s implementation will be simple; nor whether the division of the parties’ property interests under Part VIII of the Act might be easier than under the agreement; nor whether unilateral decisions made by a judgment creditor after implementation of the agreement will be perceived as unfair by one party or the other. Given the agreement’s binding nature, s 90K(1)(c) of the Act invokes impracticability, not simplicity or perceived unfairness, as the touchstone for the decision whether the agreement should be set aside.
There is no reason why the parties cannot sign registerable transfers of the real properties assigning their interests in such properties between themselves, consistently with the agreement. No doubt the judgment creditor, relying upon its mortgages, will seize upon the sale proceeds of any parcels sold by the parties. Nor is there any reason why the parties cannot transfer shareholdings between them or wind-up the trusts. The judgment creditor has no security over the parties’ superannuation interests, their underlying shares in corporations, or their beneficial interests in trusts.
The wife failed to establish how the existence of their current debts renders the agreement void or voidable or now makes it impracticable to carry out.
The self-managed superannuation fund
The parties set up their self-managed superannuation fund before they executed the agreement and they are the only members of the fund.[86] They are the joint directors of the corporate trustee of the self-managed superannuation fund. E Pty Ltd, of which the parties are also the joint directors and shareholders, is the sole shareholder in the corporate trustee.[87]
[86] Exhibit H1, Tab 25
[87] Exhibit H1, Tabs 8, 29
In or about June 2014, the trustee of the self-managed superannuation fund used assets under its control to acquire a proportional interest in the unit trust which beneficially owns the commercial premises in which the business operates, but only partly paid for the units it acquired in the unit trust.[88] The uncalled capital contribution for the self-managed superannuation fund’s acquisition of those units in the trust amounts to $220,516.[89]
[88] Amended Points of Claim filed 6/9/19, para 23; Wife’s affidavit filed 24/6/19, para 46; Exhibit W1, Tab 12
[89] Husband’s affidavit filed 12/7/19, para 57; Exhibit H1, Tab 26
The agreement provides that, upon separation, the parties will equalise and split their interests in the self-managed superannuation fund (clause 8).
The wife pleaded it is now impracticable to implement the agreement in light of those facts and circumstances because:[90]
The agreement does not accommodate the involvement of the [self-managed] superannuation fund in the joint ownership of the property in relation to the businesses with the family trust… In the circumstances that have arisen since the agreement was made it is therefore impracticable for the agreement to be implemented pursuant to section 90K(1)(c).
[90] Amended Points of Claim filed 6/9/19, para 24
Although the wife’s point was less than clear, to the extent she means it is impracticable to split the parties’ superannuation interests in the self-managed superannuation fund because of the capital invested in, and the unpaid capital still owed to, the unit trust, her assertion is rejected for two reasons.
First, the potential liability of the self-managed superannuation to the unit trust in respect of the partly-paid unit purchase has not yet crystallised as actual debt. It remains “uncalled” capital. E Pty Ltd, the trustee of the unit trust, has not yet made a call upon the corporate trustee of the self-managed superannuation fund to pay the residue purchase price. It is unlikely to do so, given the parties are the equal shareholders in and the joint directors of both E Pty Ltd and the trustee of the self-managed superannuation fund. The inchoate liability does not prevent extraction of the capital investment in the unit trust by the self-managed superannuation fund. The cash paid on the sale of the partly-paid units in the unit trust will form part of the liquid assets then available for distribution between the parties as the beneficiaries of the self-managed superannuation fund.
Secondly, the wife does not truly envisage encountering any impracticability when implementing the agreement. Her current proposal, if the agreement is set aside, is for orders requiring the self-managed superannuation fund to be paid back the money it invested in the unit trust (at the current value of the units), following which the husband acquires all of the superannuation interests held by the parties in the self-managed superannuation fund and she relinquishes her shares in and directorship of the corporate trustee.[91] If that can happen pursuant to orders made by the Court under Parts VIII and VIIIB of the Act, the division of the parties’ interests in the self-managed superannuation fund under the agreement can be implemented just as practicably.
[91] Amended Initiating Application filed 17/10/19, Orders 18, 21-25
Laches
The wife pleaded the husband had lost his right to insist on performance of the agreement due to “unreasonable delay and negligence”. She asserted she made decisions affecting her rights in reliance upon the husband’s acceptance that the agreement was not binding.
It will be remembered the parties separated in June 2015. Despite the marital separation, they remained intertwined in the complex business structure they had created. They struggled to continue working co-operatively within the business to maintain their income streams. The agreement envisaged they would try and keep the family trust, through which the business was run, functioning (clause 13). Neither party took steps to sell or transfer title in the parcels of real property they owned, as the agreement envisaged they would (clauses 9-12).
The wife commenced these proceedings in May 2016. The relief she then sought included the husband’s restraint from dealing with the corporations and the business and the appointment of an administrator. An administrator was appointed by interim order made in May 2016. The husband filed his original Response in June 2016. The relief he sought was an order to implement the agreement. Ever since, the parties have been in bitter dispute about the status and enforceability of the agreement.
The working environment obviously became untenable and the husband ceased working in the business in or about August 2016. Shortly thereafter, in September 2016, he served notice upon the wife of his demand for the family trust to be wound-up.[92] He gave that notice in reliance upon the terms of the agreement (clause 13). The wife refused to comply with the notice.
[92] Exhibit H1, Tab 31
Section 90KA provides that the question of whether an agreement made under Part VIIIA of the Act is enforceable is determined according to the principles of law and equity. The wife summoned the equitable doctrine of laches to her aid, contending the agreement is unenforceable due to the husband’s delay in asserting his reliance upon it.
The elements of the defence of laches are: knowledge of the wrong, delay, and unconscionable prejudice caused to the opponent of the delay (see Crawley v Short (2009) 262 ALR 654 at [1], [5], [163]-[165]).
Neither party expressly addressed the nature of the wife’s “wrong”, which she contended the husband unreasonably delayed taking action to enforce. The wife did not commit any “wrong”, by act or omission, to transgress the husband’s legal rights until she refused his entreaty to implement the agreement. That did not happen until she refused to submit to the relief he sought in the Response he filed in June 2016, in which case the wrong and the action to redress it occurred simultaneously and so there was no delay at all on the husband’s part. Upon that analysis, the wife’s laches defence must be dismissed.
However, the wife presumably asserted the “wrong” for present purposes was her failure to voluntarily implement the agreement immediately upon separation, which the husband did not take steps to cure until he sought declaratory relief under Part VIIIA of the Act in the Response he filed in June 2016.
In that event, the facts reveal the wife’s breach of the agreement was known to the husband by July 2015, because the agreement required the parties to transfer title in real properties they owned within 28 days of their separation (clauses 9 and 10) and they did not do so, even though they separated in June 2015. The husband delayed acting to implement the agreement, for which there is no satisfactory explanation in evidence. It was not until May 2016, when the wife commenced these proceedings, that the parties’ dispute over the status and enforceability of the agreement became live. Allowing for that delay, the material question is what “unconscionable prejudice” was caused to the wife by the husband not signalling his intention to rely upon and enforce the agreement until nearly a year after the parties’ separation? The evidence did not reveal any prejudice, let alone unconscionable prejudice. Inconvenience will not suffice.
In the period between June 2015 and May 2016, the parties tried to maintain the business operation, but they were unable to sustain the commitment. During that period they each continued to draw income for their labour. The wife refused to surrender her measure of control over the business operation and ultimately the husband departed in August 2016. She wanted to maintain control of the business operation and did so. The husband’s delay did not frustrate that objective.
Once the husband’s position was clear, the wife continued to conduct the business alone. Although the responsibility may have been burdensome, she has steadfastly refused to relinquish it. Retention of control over the business must suit her. She refused to accede to the husband’s formal notice, given in September 2016, to wind-up the family trust and she resisted the husband’s attempt to install receivers by successfully appealing the interim orders made in May 2018 in that respect. The relief she ultimately hopes to achieve under Part VIII of the Act includes her effective control of the corporate and trust structure,[93] so that objective has not been frustrated by the husband’s delay between June 2015 and the filing of his Response in June 2016. Under the agreement, the parties would retain equal shares of the corporations and trusts which, although less than she now seeks, does not render its implementation impracticable.
[93] Amended Initiating Application filed 17/10/19, Orders 9-19
As for the parties’ other property interests, the wife still occupies the jointly-owned property which the agreement requires be transferred to her and the husband still occupies the jointly-owned property which the agreement requires be transferred to him. The parties otherwise maintain their own bank accounts and personal property, so enforcement of the agreement would now only formalise that status quo. No impracticability is revealed.
The practicability of equalising and splitting the parties’ superannuation interests under the terms of the agreement has already been addressed.
On the evidence, even by analysing equity principles on the wife’s terms, she lost nothing by the husband’s failure to try and enforce the agreement within the first year following their separation and so her laches submission fails.
The husband’s contrary conduct
This complaint by the wife follows on from her claim of the husband’s laches. She alleged that, even after expressly asserting his reliance upon the agreement from May or June 2016, the husband has failed to implement parts of the agreement. She cited his failure to transfer one parcel of real property to her (clause 10), his failure to sell another parcel of property and share the net proceeds with her (clauses 11 and 12), and his frustration of her attempts to continue running the business efficiently (clause 13).
However, that only tells half the story. The wife has also failed to transfer real property to the husband (clause 9) and her complaints about the husband’s interference with her unilateral conduct of the business ignores the obvious fact he maintains equal interest in the corporations and trusts, through which the business is operated, and they each tried to wrest control of the business from the other. The agreement provides for continued operation of the family trust, if feasible, but also makes provision for it to be wound-up at the option of one party (clause 13). The husband purported to act on his rights under the agreement by giving the wife formal notice of his demand in September 2016 for the family trust to be wound-up. She has refused to comply with his demand ever since. Neither party has wanted to implement the agreement in a “piece-meal” way, as the husband described it in cross-examination. The husband wants the agreement enforced in totality, the wife wants it set aside in totality, and neither has given ground while waiting for a decision from the Court.
Contrary to the wife’s pleaded contention, those facts do not make it impracticable for the agreement to now be carried out.
Conclusion and orders
It follows that the agreement is binding upon the parties and it should not be set aside. In those circumstances, since the Court’s jurisdiction under Part VIII of the Act is ousted, the wife’s Amended Initiating Application filed on 17 October 2019 must be dismissed in totality.
In his Response to an Amended Initiating Application filed on 13 September 2019, the husband sought some ancillary relief under Part VIIIA of the Act to aid the implementation of the agreement. He maintained his application for some of those orders,[94] but abandoned his application for others.[95]
[94] Response to Amended Initiating Application filed 13/9/19, Orders 2, 3.2, 4.1 and 4.2
[95] Response to Amended Initiating Application filed 13/9/19, Orders 3.1, 3.3, 4.3
The proposed orders for which the husband maintained his application are orders which would require the family trust to be wound up (clause 13), the property occupied by him to be transferred into his exclusive title (clause 9), and the property occupied by the wife to be transferred into her exclusive title (clause 10). It is sensible to make orders compelling the parties’ action to implement basic provisions of the agreement, since it might avoid the need for further enforcement proceedings.
The husband sought that the transfers of real property be delayed until after the family trust is wound up, but there will be no such temporal limitation on the orders. As the wife correctly pointed out, the agreement required those transfers to be effected within 28 days of their separation (clauses 9 and 10) and it was initially expected the family trust would be retained as a viable entity (clause 13). Orders which require the family trust to be wound-up before the real properties are transferred between the parties would reverse the intention manifest from the agreement.
Other orders will be made in aid of implementation of the agreement, though not expressly sought.
The wife submitted the agreement omitted any express mention of one parcel of real property which the parties treat as partly comprising the farming property where the husband lives.[96] The farm comprises several parcels of adjoining land.[97] The parties jointly own the two parcels which the agreement requires be transferred to the husband (clause 9). The third parcel, which is owned by the husband, is not mentioned within the agreement, but the husband conceded in final submissions that third parcel of land must be sold and the net proceeds of sale divided equally between the parties as the agreement otherwise provides (clauses 11 and 12). An order will be made for the husband to forthwith sell that property and deal with the proceeds of sale as the agreement requires. That order could not be controversial because the husband conceded the sale must occur and the wife complained in her pleadings that the sale had not occurred already.[98]
[96] Wife’s affidavit filed 24/6/19, paras 25, 39
[97] Husband’s affidavit filed 12/7/19, para 64; Exhibit H1, Tab 27
[98] Amended Points of Claim filed 6/9/19, para 34.2
An order is made under s 106A of the Act permitting the Registrar to sign any document needed to implement the orders in the event either party refuses to sign such a document.
The parties both sought costs,[99] but the question of costs will be reserved for 28 days. Any costs application which is maintained will need to be re-listed by the party seeking costs within the next 28 days.
[99] Amended Initiating Application filed 17/10/19, Proposed order 4; Response filed 13/9/19, Proposed order 6
I certify that the preceding one hundred and fifty (150) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Austin delivered on 6 December 2019.
Associate:
Date: 6 December 2019
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