Senior & Anderson - [2010] FamCA 601

FAMILY COURT OF AUSTRALIA

SENIOR & ANDERSON

[2010] FamCA 601

FAMILY LAW – PROPERTY – BINDING FINANCIAL AGREEMENT – Errors within the document – Document drawn pursuant to s 90C rather than s 90D – Errors on the coversheet, heading and substantive clause of agreement – Parties’ given names wrongly stated in annexed solicitor’s certificates – Parties divorced prior to execution of agreement – Orders sought that the document is not a financial agreement as drawn and is not binding upon the parties – Consideration of affidavit evidence of parties and solicitors – Objection to wife’s solicitor acting – Common intention of parties to division of assets and property settlement – Amending legislation – Intention of parliament in introducing amended legislation – Mistake and rectification – Correction of the mistakes within the agreement – Consideration of s 90G, s 90G(1B), (1C) and s 90KA – Valid, enforceable and effective – Consideration of the words “valid” and “effective” – Exchange of contracts and concluded agreement – Onus of proof

Family Law Act 1975 (Cth) ss 4, 71A, 79, 90C, 90D, 90G, 90G(1A), (1B) and (1C), 90K, 90KA
Federal Justice Systems Amendment (Efficiency Measures) Act 2009 (Cth)

Ruane & Bachman-Ruane & Anor (2009) FamCA 1101
Black & Black [2008] FLC 93-357
J & J (2006) FamCA 442
Balzia and Covich (2009) FamCA 1357
Ryledar Pty Ltd & Anor v Euphoric Pty Ltd (2007) 69 NSW LR 603
Fevia & Carmel-Fevia (2009) FLC 93-411 816
Sindel v Georgiou (1984) 154 CLR 661
Kostres and Kostres (2009) FLC 93-420

APPLICANT:

MS SENIOR

RESPONDENT:

MR ANDERSON

FILE NUMBER:

MLC

9546

2008

DATE DELIVERED:

13 JULY 2010

PLACE DELIVERED:

MELBOURNE

PLACE HEARD:

MELBOURNE

JUDGMENT OF:

YOUNG J

HEARING DATE:

10 MAY 2010

REPRESENTATION

COUNSEL FOR THE APPLICANT:

MR WERNER

SOLICITOR FOR THE APPLICANT:

BRENDAN LEWIS

COUNSEL FOR THE RESPONDENT:

MR DEVRIES

SOLICITOR FOR THE RESPONDENT:

ALLAN McMONIES

TABLE OF CONTENTS

REASONS FOR JUDGMENT
ORDERS PRONOUNCED
BACKGROUND FACTS
DOCUMENTS READ AND RELIED UPON
THE AGREEMENT
SOLICITOR’S ADVICE GIVEN TO WIFE ON AGREEMENT
OBJECTION TO WIFE’S SOLICITOR
HUSBAND’S EVIDENCE
FINDINGS UPON THE AGREEMENT
THE SOLICITOR’S CERTIFICATES
FAMILY LAW ACT 1975 (CTH)
SECTION 90C OR SECTION 90D?
THE AGREEMENT – REFERENCES TO S 90C
LEGAL PRINCIPALS
RECTIFICATION OF THE AGREEMENT
SECTION 90KA, SUBMISSIONS OF WIFE’S COUNSEL

Orders
IT IS ORDERED:

IT IS DECLARED that the agreement executed on or about 27 July 2009 by the husband and wife is a financial agreement pursuant to s90D of the Family Law Act 1975 (Cth).
THAT such financial agreement and the annexed Solicitor’s Certificates, in the current form as drafted, be rectified to accord with the provisions of s90D of the Act.
THAT paragraph 1 of the wife’s amended application filed 17 March 2010 be otherwise dismissed.
THAT the issue of costs arising from these orders are reserved to the trial Judge.
THAT the hearing of all extant applications be listed as a continuing defended hearing before Young J on 23 July 2010 at 10.00 a.m.
THAT any further interim application to be filed by solicitors for either of the parties is to be filed and served by 2 July 2010 and made returnable on 23 July 2010 before Young J.
THAT the defended hearing fixed before Young J at 10.00 a.m. on 2 July 2010 be vacated.

IT IS CERTIFIED

THAT pursuant to Rule 19.50 of the Family Law Rules this matter reasonably required the attendance of Counsel for each of the husband and wife.

IT IS NOTED

A.THAT the time for any appeal shall not commence to run until the reasons for judgment are provided to the solicitors consequent upon the pronouncement of orders this day.

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

FAMILY COURT OF AUSTRALIA AT MELBOURNE

FILE NUMBER: MLC 9546 OF 2008

MS SENIOR

Applicant

And

MR ANDERSON

Respondent

REASONS FOR JUDGMENT

These proceedings came before me for legal argument on the first day of hearing on 10 May 2010. I have subsequently had the benefit of reading detailed written legal submissions, together with all of the Court documents filed in the proceedings, which have identified that the initial legal issues to be first determined by the Court are:
(a)is the agreement signed by each of the husband and wife (“the parties”) on 27 July 2009 a financial agreement within the definition of s 4 and s 71A of the Family Law Act 1975 (Cth) (“the Act”)?; and
(b)if so, is such an agreement binding upon each of the parties?
The wife’s amended application filed 17 March 2010 sought, as a first order therein:
“A declaration that the document dated 27 July 2009 and marked “SS-4” and exhibited to the affidavit sworn by the applicant on 17 March 2010 is not a financial agreement within the meaning of section 90D of the Act”.
The basis of that order sought is that the agreement executed by the parties, on a date after which the Decree Nisi of Dissolution of Marriage had been granted makes reference, on three separate occasions within the agreement, to it having been drawn pursuant to s 90C and not s 90D of the Act and otherwise wrongly identified the parties in the annexed Solicitor’s Certificate. That is the legal argument central to the submission made on behalf of the wife that the agreement under challenge is not a financial agreement under the Act.
In the alternative the wife thereafter sought various other declarations pursuant to s 90G(1)(b) and (c) and s 90K(1)(b) and (e) of the Act and, if successful, consequential orders for the division of property interests pursuant to s 79 of the Act.
In her amended application the wife had additionally sought, in paragraph 3 thereof, that:
“In the alternative, a declaration that the document dated 27 July 2009 and marked “SS-4” and exhibited to the affidavit sworn by the applicant on 17 March 2010 is not binding on the applicant for want of compliance with section 90G(1)(c) of the Act”.
I have identified that additional order sought as the submissions from Counsel for the wife were to the effect that the wife was not provided with a signed statement by a legal practitioner stating that the required advice upon the agreement was provided to her, as distinct from some other person. The essence of that legal submission is that the annexed Solicitor’s Certificate to the agreement, aside from properly identifying the wife by name in the advice given to her thereafter misdescribed her as “Patricia” in clauses 2 and 3 thereof. I have considered the evidence in this regard and made such preliminary findings as were sufficient to enable me to deal with the primary application before the Court, as identified in paragraph 2 hereof. I have however resisted making any final determination of the order sought in paragraph 5 hereof because of the amended submission made by Counsel for the wife and filed on her behalf on 4 June 2010, wherein paragraph 41 thereof he carefully identified that the wife, in these initial proceedings, asked that the Court only determine the validity of the agreement pursuant to her first ground of argument and not the subsequent grounds of argument (grounds 2 – 5) (inclusive) as identified in paragraph 26 of her Outline of Case document filed 6 May 2010.
In paragraph 28 of that document (No. 32 in the Court Index) her Counsel argued that this order sought required only a limited factual inquiry and raised purely questions of law and, if the submissions made on her behalf were to be accepted, then it would provide a solid basis for determining that the required advice from her solicitor to her upon the advantages of the agreement were not established. Given the annexed certificates that are before the Court of the legal advice from each of the then solicitors for the husband and wife and with the errors therein, it was necessary for me to make certain findings thereon.
In his response filed 30 April 2010 the husband sought the dismissal with costs of the wife’s amended application.
The hearing was conducted on a submissions basis and no evidence was called and there was no cross examination of either of the parties or their witnesses, or any argument upon or consideration of the underlying division of net assets and property evidenced by the agreement under consideration.

ORDERS PRONOUNCED

At the conclusion of the hearing I had relisted this matter before me on 2 July 2010 for the hearing of any further or continuing matters. I called the legal practitioners into Court on 30 June 2010 and pronounced my Orders on that day on the basis that the reasons for judgment would follow shortly thereafter. I did so with the intention of providing the earliest opportunity to the parties to further discuss and negotiate on all outstanding issues. My reasons were delivered on 13 July 2010 and I incorporated within my earlier Orders at the request of Counsel that any time for an appeal would not commence to run until the reasons for judgment were provided to the parties.

BACKGROUND FACTS

The husband and wife (“the parties”) were married in Egypt in September 1989. They had each been born in Egypt and the husband had migrated to Australia in 1983. After the marriage the husband brought the wife to Australia in December 1989. The wife is 40 years of age, the husband 54 years of age and there are no children of the marriage.
The parties lived together as man and wife until March 2006 when they separated. They are now divorced. A Decree Nisi was pronounced on 2 December 2008 and became absolute on 3 January 2009.
There is and remains a dispute, on the material filed, between the parties as to the date of separation but for the purposes of this Judgment those matters are not relevant and do not impact upon the initial issues for determination.
Likewise the affidavits of the parties, and the initial Outline of Argument of the wife, identified the asset pool including the value of each of the two jointly owned real properties and other personal assets and chattels of the parties. I merely record that the wife’s solicitors have placed those issues before the Court but they have not been the subject of hearing or legal argument and are not matters before me for determination at this stage.
The parties executed an agreement on 27 July 2009, on a date after they were divorced, and in general terms that agreement provided for the wife to receive a cash sum of $28,000, which has been paid to and received by her solicitor but not yet banked or paid to the wife. Otherwise it provided for the husband to own and retain the remaining property and assets which substantially comprise a shop with an upstairs residence at B and the husband’s place of residence at W, both of which properties were then registered in the joint names of the husband and wife as tenants in common. There was then some dispute, or lack of agreement, as to the current market value of each property and generally as to liabilities, but they are not issues which concerned me in this Judgment.
For the purposes of the issues before me for determination at this stage of the proceedings I otherwise have heard no evidence and make no further findings upon the pool of assets or any s 79 issue.

DOCUMENTS READ AND RELIED UPON

WIFE

In support of her application the wife relied upon the following affidavits and documents:
(a)      an amended initiating application filed 17 March 2010;
(b)      her financial statement filed 17 March 2010;
(c)      her trial affidavit filed 17 March 2010;
(d)the affidavits of her solicitor, Brendan Vincent Lewis filed 6 November 2009 and 17 March 2010;
(e)an affidavit of DR filed 22 January 2010; and
(f)her Counsel’s Outline of Case Argument and each of the amended submissions and her reply submissions filed 4 June 2010.
HUSBAND
In his response the husband filed and relied upon the following affidavits and documents:
(a)his response to the initiating application filed 30 April 2010;
(b)his financial statement filed 16 April 2010;
(c)his trial affidavit filed 16 April 2010;
(d)his further affidavit filed 28 April 2010; and
(e)his Counsel’s Outline of the opening of his case and the further legal submissions dated 10 May and 21 May 2010.

THE AGREEMENT

In evidence before the Court is an agreement dated 27 July 2009 and executed by each of the husband and wife and witnessed by their then solicitors. The words “deed” and “agreement” are interchangeable throughout the poorly drawn document, which for consistency I will term “the agreement” for the purposes of this Judgment. It is in evidence that the agreement was drawn by the husband’s previous solicitor. The agreement recited the marriage and divorce of the parties and recorded their assets and liabilities, the property division agreed upon and both the process of the concluded agreement and its finality.
In the substantive part of the agreement clause 1, page 4, it is said that:
“This deed is and is intended to have effect as a deed pursuant to section 90C and part VIIIA of the Family Law Act 1975 (Commonwealth). There is no other agreement in force pursuant to section 90B, 90C or 90D of the Family Law Act 1975 (Commonwealth) or section 285 of the Property Law Act 1958 (Victoria)”.
Both on the coversheet to the agreement and again on the heading of the first page of the agreement, but not in the Recitals, it is expressed to be a financial agreement drawn pursuant to s 90C of the Act. That legal error should have been obvious given the date of divorce was long before the execution of the agreement but was again repeated in the first substantive clause, set out above. As the parties were divorced the agreement could only have been validly drawn and entered into pursuant to s 90D of the Act.
In paragraphs 32 and 33 of the agreement each of the parties separately acknowledged that they had received legal advice in relation to the negotiations of its terms and provisions and its effect upon each of them.
Each of the parties’ signature to the agreement were witnessed by their then solicitor and in the case of the wife’s signature it was thereunder dated 18 July 2009.
Annexed to the agreement are the then required certificates from each of the legal practitioners. Curiously the wife’s solicitor’s certificate was dated 20 July 2009 and her receipt and acknowledgement of her understanding thereof was dated 22 July 2009 although this discrepancy is largely explained in the affidavit of the wife’s solicitor.
The wife’s certificate itself was inaccurate in that, having correctly identified her as the client to whom the advice was given she was subsequently identified, not by her correct name but by the name “Patricia” in clauses 2 and 3 of that certificate. It is this error in the Solicitor’s Certificate, which I earlier identified in paragraph 6 hereof, that is said by Counsel for the wife to support his third ground of argument, that is that the advantages and disadvantages of the agreement were not provided to the wife at the time of making the agreement, but otherwise were provided to “Patricia”. It is however accepted by the wife in her evidence that she received that legal advice provided to her by her then and now solicitor and otherwise that she signed that Certificate.
The certificate from the husband’s then solicitors identified the advice provided to the husband as at 27 July 2009 but again there are errors within clauses 2 and 3 thereof where the husband is wrongly identified by the name “Chris”.
A legal precedent document was most likely carelessly copied without reading or appropriate amendment as to the incorrect given names of each of the clients within clauses 2 and 3 of the respective certificates. It must however be recorded that each of the certificates do elsewhere correctly identify the client by name and each of the clients have otherwise acknowledged receipt and comprehension of the advice on that same certificate. Whilst these inaccuracies should have most certainly been identified by both solicitors and each of the clients nevertheless I find that the parties each received and acknowledged their legal advice and their names are recorded in bold type on each of those certificates and each of them should not or could not have been under any misunderstanding that the advice was pertinent to each of them and not any other wrongly named individual.
An examination of the dates of execution of the agreement and certificates would seemingly highlight that the wife, in the presence of her solicitor, signed the agreement on 18 July 2009 some two, or otherwise four days before the receipt of advice then required to be given pursuant to s90G(1)(b)(i) and (ii) and (c). In the form of that section as at 27 July 2009 and before legislative amendment it was then required that the independent advice be given by a solicitor to the party before such agreement had been signed and that requirement was necessary to be appropriately certified. Compliance with that requirement is perhaps better explained by a careful reading of the affidavits of the wife’s solicitor which I have hereunder considered.

SOLICITOR’S ADVICE GIVEN TO WIFE ON AGREEMENT

The wife, in her affidavit filed 17 March 2010, deposed as to advice received by her and instructions given by her that are relevant to the form and content of the agreement.
In paragraph 40 thereof the wife acknowledged that initially her claim against the husband was intended by her to be in the sum of $30,000 as she knew that he had that much money in the bank account and that he would never give her or sell any of his properties. She was advised by her solicitor that such a sum of $30,000 was inappropriate and that she was entitled to about half of the pool of assets and she concluded, in paragraph 42 thereof, that she would be “worse by about $750,000”.
Subsequently there were ongoing discussions between the parties and a settlement sum of $28,000 was offered. Thereafter an agreement was prepared and the wife was advised that, if signed, the agreement would be final and binding. Initially she declined to sign because of matters identified in paragraph 48 of that affidavit but subsequently it was signed by her at the office of her solicitor on 18 July 2009. At that time she was handed a letter of legal advice from her solicitor dated 17 July 2009. The wife and the solicitor discussed the contents of the agreement and in paragraph 49 thereof the wife admitted signing the agreement “because I wanted to get the matter over with”. She there acknowledged, to the best of her memory, that she was told by her solicitor that she did not have to sign the agreement that night, but could think about it and also that once signed the proceedings were concluded and there would be “no going back”.
In his affidavit of 17 March 2010 the wife’s solicitor deposed to the facts and circumstances surrounding his advice to his client and the execution of the agreement, and in particular paragraphs 20 – 33 thereof (inclusive).
The solicitor had drafted a letter of advice, dated 17 July 2009 and provided that document to his client, marked as exhibit “BVL-1” to his affidavit, which exhibit I have read. The basic summary of that advice is that the division of property is “very one-sided in your ex-husband’s favour”. The letter highlighted that the agreement was very clear and would not be able to be challenged and that the wife would likely receive far more than the offered sum of $28,000 from a concluded Court hearing.
In his affidavit, paragraph 21, the wife’s solicitor identified that letter of advice and their discussion of its contents and his care at the time in establishing that the wife knew of the advice and recommendation and that there was no misunderstanding on her part as to the contents thereof.

There were no advantages to the wife in signing that agreement as assessed by her solicitor and that was identified in paragraph 24 of the affidavit. Nevertheless it is said that the wife was determined to sign and did not change her mind. The agreement was signed in front of her solicitor on 18 July 2009. The solicitor held the agreement “for a couple of days” in case the wife changed her mind but thereafter he attached the certificate of legal advice without noticing the mistakes thereon, signed and dated that document on 20 July 2009 and then forwarded it to the wife to thereafter countersign.
Some days later the wife, for reasons that subsequently arose and are identified in the affidavits, instructed her solicitor that the husband had not complied with other promised actions and that she wanted the legal case to proceed and for the agreement to be set aside or discharged. I carefully make no further comment upon or findings as to these issues which are likely to have relevance to the other applications under s 90K(b) and (e).

OBJECTION TO WIFE’S SOLICITOR

It is proper to record in the further submissions filed on behalf of the husband on 21 May 2010 the alleged conflict of interest of the wife’s solicitor is raised in paragraphs 2 – 11 (inclusive) thereof. These issues have been foreshadowed but not argued before me in these initial proceedings.
The alleged issue is that justice has possibly been, or will be denied to the husband, if the wife’s solicitor remains acting on her behalf in these continuing proceedings, but the basis for such a claim is yet to be fully identified.
Mr Lewis has filed two affidavits, the first on 6 November 2009 and the second filed 17 March 2010. Both affidavits, and it is said more particularly the second of the documents, deal with highly contentious matters going to important issues to be determined by the Court. The husband’s legal submissions identify the need for the wife’s solicitor to be cross examined and raise the allegation as to the “very clear, abiding vested interest that he has in the outcome of this matter”.
Save that the same solicitor has continued to represent the wife in these current proceedings there has been no opportunity for him to provide any detailed written response to the allegation or intended action of the husband and it is a matter that is now simply not before the Court by way of any order sought.
I am alert to the fact that the wife’s then solicitor, at the time of the execution of the agreement, is now in Court and instructs Counsel in these proceedings and without any objection from her. That same solicitor has drawn both her affidavit which I have earlier considered and each of his affidavits before the Court. It may hereafter be raised as an issue in these or other proceedings that Mr Lewis perhaps could have been seen to have been somewhat conflicted in drawing the wife’s affidavit and thereby highlighting the advice that she had received from him and her then instructions. Significantly that was not a matter now raised by the wife. It is a matter however that has been of real concern to me in the conduct of this case on behalf of the wife.
I accept the wife’s evidence of and related to the agreement and her knowledge and understanding of the finality thereof. Likewise I am accepting of the fact of the legal advice given by her solicitor. On that evidence I find that the wife did intend to enter into a final and binding agreement pursuant to the Act by which she knew of and intended to oust the jurisdiction of the Court from further hearing and determining any division of property as between her husband and herself.

HUSBAND’S EVIDENCE

The husband, who describes himself as an unemployed accountant, swore an affidavit which was filed on 16 April 2010 in these proceedings. I have read that affidavit only insofar as it is relevant to the initial matters now before me and thus I have not had regard to the matters and facts deposed to therein about the prior alleged separation in 2001 or otherwise about issues as to the identification and quantum of assets and liabilities or other matters of contribution or s 75(2) factors.
As to the negotiated settlement of property leading to the 27 July 2009 execution of the agreement the husband said in paragraph 11 of that affidavit that:
“Upon receipt of the (wife’s) application I contacted the applicant. I told her that matter had been resolved. It had become obvious to me that she wanted more money. I then agreed to pay her an additional sum of $28,000 in full and final settlement of the matter. Such a sum was to be paid on the basis that the applicant would execute the documents to reflect to this agreement. The applicant agreed”.
The husband deposed in paragraph 12 that he contacted his solicitors and requested them to prepare the necessary documents. His former solicitors then prepared what was intended to be a binding financial agreement which was forwarded to the wife’s solicitor. The husband deposed in paragraph 14 to his execution of that agreement and as to then being informed of the advantages and disadvantages in making such an agreement. The husband further deposed that he acted in good faith and had the belief that the agreement was legal and binding between himself and his wife.
In paragraph 37 of his affidavit and in response to the paragraphs of the solicitor’s affidavit therein identified the husband stated that his wife “is a very smart lady and well educated with knowledge and experience to manage her own life”. He further asserted that “she is the only person who knows the truth about her actual contribution of the assets and for that reason she accepted my offer, what I offered her was very reasonable and a relatively fair decision with respect to her contribution”.
The husband further deposed therein that the wife was:
“Very happy with my offer and that is why she made up her mind and her decision instantly and with no hesitation”.
The husband concluded in paragraph 37 of his affidavit with the statement that:
“From the very beginning the wife wanted only $30,000”.
Today was the first day of this hearing, on a submissions only basis, and the husband has not been cross examined on his affidavit. I therefore have not relied upon and have drawn no conclusions from his evidence given in paragraph 37 thereof but I am able to conclude from his other sworn evidence that he entered into the agreement for the purposes of concluding a final settlement and division of property with his wife.

FINDINGS UPON THE AGREEMENT

As to the agreement executed by the parties and dated 27 July 2009 I find that:
(a)the agreement was executed by each of the parties and witnessed by their solicitors;
(b)the husband and wife each received legal advice upon the division of assets and the proposed property settlement from their then solicitor;
(c)the wife’s then intention was to enter into a binding financial agreement;
(d)the husband’s then intention was to enter into a binding financial agreement;
(e)the agreement was drafted by the husband’s then solicitor;
(f)each of the Solicitor’s Certificates annexed to the agreement is properly addressed to their respective client in the introductory paragraph on that Certificate and again where each of the clients confirmed receipt and comprehension of such legal advice;
(g)the wife received clear and understandable legal advice upon the adequacy of her proposed property settlement and the finality of the executed agreement;
(h)the agreement is clear and definite as to the identification of the assets, liabilities and personal chattels of the parties and as to their manner of division between each of them;
(i)the husband has caused to be forwarded to the wife’s solicitors a cheque for the required settlement sum of $28,000 which has been held, without banking, by that solicitor for and on behalf of the wife and pending conclusion of these proceedings; and
(j)the parties each received the required legal advice in (b) hereof from an appropriately qualified Australian Legal Practitioner.
As to the issue of the agreement having been wrongly drawn pursuant to s 90C of the Act I conclude there was a marked lack of care or otherwise knowledge and understanding by each of the then respective solicitors of the difference in these sections (s 90C and s 90D) as defined within the Act. It was known that the parties were then divorced and it should have been known that the agreement could only have been drawn and entered into between the parties pursuant to s 90D of the Act.

THE SOLICITOR’S CERTIFICATES

Each of the Solicitor’s Certificates are not endorsed by any reference to a section of the Act. They do not state that the advice is given pursuant to either of s 90C or, in the alternative, s 90D. They merely record that the then practising solicitor acting for each of the husband and wife gave their client advice before the agreement was signed.
I have already identified the error in each of the Certificates as contained in clauses 2 and 3 thereof where a precedent agreement had most likely not been updated to include the correct given names of each of these clients.
The inclusion of the names “Patricia” and “Chris” are an error by solicitors, perhaps that which could even be described as a “slip” were it not so serious which should have been identified by them and which the clients should have corrected when signing for receipt of that advice upon the Certificate document itself.
The submission of the husband’s solicitors is that the inclusion of these erroneous names are merely “unintended, typographical errors” and each of them individually and all of them collectively amount to a technical error(s) that is wholly insufficient to enable the other party having made an informed decision to enter into this agreement to now avoid its agreed terms and the concluded property settlement.
I have reached a firm conclusion that the errors upon the Certificate(s) can and should be corrected, that they were unintended errors and they should not and do not negate the professional legal advice given to each of the parties. They are not errors that are fatal to the binding nature of the agreement and in their reflect and circumstances they are different to the facts of Balzia and Covich (2009) FamCA 1357 where Collier J reached a different conclusion.

FAMILY LAW ACT 1975 (CTH)

The relevant law applicable to a financial agreement entered into by parties to a marriage is found in Part VIIIA of the Family Law Act 1975 (Cth) (“the Act”). A valid financial agreement entered into under this Part effectively ousts the jurisdiction of the Court to make an alteration of property interests under s 79 of the Act. A financial agreement purported to be made under Part VIIIA must satisfy the legislative requirements to be binding and invoke s 71A(1) of the Act, which provides:
This Part does not apply to certain matters covered by binding financial agreements
(1) This Part does not apply to:
(a) financial matters to which a financial agreement that is binding on the parties to the agreement applies; or
(b) financial resources to which a financial agreement that is binding on the parties to the agreement applies.
The definition of a “financial agreement” is found in s 4 of the Act where it is defined as “an agreement that is a financial agreement under section 90B, 90C or 90D, but does not include an ante-nuptial or post-nuptial agreement to which section 85A applies”.
Relevantly for present purposes, ss 90C and 90D provide:
90 C Financial agreements during marriage
(1) If:
(a) the parties to a marriage make a written agreement with respect to any of the matters mentioned in subsection (2); and
(aa) at the time of the making of the agreement, the parties to the marriage are not the spouse parties to any other binding agreement (whether made under this section or section 90B or 90D) with respect to any of those matters; and
(b) the agreement is expressed to be made under this section;
the agreement is a financial agreement . The parties to the marriage may make the financial agreement with one or more other people.
90 D Financial agreements after divorce order is made
(1) If:
(a) after a divorce order is made in relation to a marriage (whether it has taken effect or not), the parties to the former marriage make a written agreement with respect to any of the matters mentioned in subsection (2); and
(aa) at the time of the making of the agreement, the parties to the former marriage are not the spouse parties to any other binding agreement (whether made under this section or section 90B or 90C) with respect to any of those matters; and
(b) the agreement is expressed to be made under this section;
the agreement is a financial agreement . The parties to the former marriage may make the financial agreement with one or more other people.
Section 90G is the relevant provision as to the necessary conditions required for a financial agreement purported to be made under Part VIIIA to be binding. That section, as recently amended, provides:
When financial agreements are binding
(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.
(1A) A financial agreement is binding on the parties to the agreement if:
(a) the agreement is signed by all parties; and
(b) one or more of paragraphs (1)(b), (c) and (ca) are not satisfied in relation to the agreement; and
(c) a court is satisfied that it would be unjust and inequitable if the agreement were not binding on the spouse parties to the agreement (disregarding any changes in circumstances from the time the agreement was made); and
(d) the court makes an order under subsection (1B) declaring that the agreement is binding on the parties to the agreement; and
(e) the agreement has not been terminated and has not been set aside by a court.
(1B) For the purposes of paragraph (1A)(d), a court may make an order declaring that a financial agreement is binding on the parties to the agreement, upon application (the enforcement application ) by a spouse party seeking to enforce the agreement.
(1C) To avoid doubt, section 90KA applies in relation to the enforcement application.
(2) A court may make such orders for the enforcement of a financial agreement that is binding on the parties to the agreement as it thinks necessary.
It is pursuant to s 90G that a determination is to be made that a financial agreement is binding, though this section is to be read subject to the compliance with each of the required elements of the applicable s 90B, s 90C or s 90D of the Act. In an enforcement application a court may declare a financial agreement binding pursuant to s 90G(1A) and (1B). Of significance and to avoid doubt by the wording of s 90G(1C) of the Act provides that s 90KA applies to an enforcement application. These amendments were included in the Act with operation from 4 January 2010, but with retrospective effect covering 27 July 2009. I have identified and considered that amending legislation in paragraphs 79 and 84 of these reasons. That section, s 90G(1C), states that s 90KA “applies in relation to the enforcement application”. If so, and if s 90KA is directed, solely or primarily, at enforcement proceedings during which “validity, enforcement or effective” issues may arise, is it then open to a Court to otherwise determine questions of validity of a financial agreement pursuant to s 90KA?
Part VIIIA of the Act is structured so that:
§a valid financial agreement must be drawn pursuant to either of s 90B, s 90C or s 90D, such as are applicable to the facts and circumstances of the case;
§a determination of the binding nature of a financial agreement is to be undertaken pursuant to s 90G;
§the circumstances in which a Court may set aside a financial agreement are to be determined pursuant to s 90K;
§the principles of law and equity are available to the Court pursuant to s 90KA for enforcement of the terms of the financial agreement and as are further identified in sub-paragraphs (a), (b) and (c) thereof.
The legal issue raised in submissions in reply by Counsel for the wife is that the Court has the power and could determine the “validity” of a financial agreement pursuant to s 90KA. It is said that the Court can only deal with an agreement that is a financial agreement within the Act and thus, on the facts of this case, it could not and should not declare the agreement of the parties dated 27 July 2009 to be valid, rather (as was argued) it should be found to be an invalid financial agreement. I have answered this submission later in my Judgment.
Section 90KA deals with the validity, enforceability and effect of financial agreements and termination agreements in the following terms:
The question whether a financial agreement or a termination agreement is valid, enforceable or effective is to be determined by the court according to the principles of law and equity that are applicable in determining the validity, enforceability and effect of contracts and purported contracts, and, in proceedings relating to such an agreement, the court:
(a)subject to paragraph (b), has the same powers, may grant the same remedies and must have the same regard to the rights of third parties as the High Court has, may grant and is required to have in proceedings in connection with contracts or purported contracts, being proceedings in which the High Court has original jurisdiction; and
(b)has power to make an order for the payment, by a party to the agreement to another party to the agreement, of interest on an amount payable under the agreement, from the time when the amount became or becomes due and payable, at a rate not exceeding the rate prescribed by the applicable Rules of Court; and
(c)in addition to, or instead of, making an order or orders under paragraph (a) or (b), may order that the agreement, or a specified part of the agreement, be enforced as if it were an order of the court.

SECTION 90C OR SECTION 90D?

For an agreement to be made pursuant to s 90C or s 90D there are three elements that must be satisfied. I accept that all three of those elements are ordinarily required for the agreement to be a financial agreement pursuant to either of those sub-sections of the Act.
Counsel for the wife has strongly asserted in his written submissions and oral argument that the agreement does not satisfy s 90D(1)(b) and therefore the document cannot be a financial agreement pursuant to that section and within the meaning of the Act.
His written submissions and legal argument emphasised that the parties were divorced and the agreement could and should have only been drawn pursuant to s 90D of the Act and so identified. It was not and he submitted therefore that this document could not be a financial agreement.

The submissions of Counsel for the husband are that the parties separately and jointly intended to conclude a binding financial agreement and that the mistaken reference to s 90C in each of the three parts of the agreement which I have earlier identified “arose solely out of sloppy checking of the agreement by the respective legal practitioners for the parties and/or, in the case of the husband’s then legal practitioner, careless application of a precedent” (paragraph 12,t).
The further written submission of the husband’s Counsel, in paragraph 22 of his written submission, was that:
“To set aside the agreement on the basis of the typographical errors, where the parties each receive independent legal advice concerning the agreement, would not, it is submitted, be consistent with the Act and a clear intention of each of the parties at the time of the execution of the document and would support the intention of Parliament in enacting the amendment Act”.
It was further submitted that the clear intention of the parties was apparent and that the obvious and unambiguous belief of each of them was that they were entering into a binding financial agreement appropriate for a divorced couple and that, save for the typographical errors, where “C” is typed, instead of “D”, the agreement complies with all of the requirements of s 90D of the Act and importantly contains no provisions that contemplate that the marriage was ongoing.
The last of the submissions made by Counsel for the husband on this aspect of the hearing was that the agreement is not and was not an agreement made pursuant to s 90C but was at all times an agreement that was intended to be, and could have only been made pursuant to s 90D, notwithstanding its mistaken, careless and incorrect characterisation. The agreement itself, in paragraph B of its Recitals, identified the divorce which occurred on 2 December 2008 and that fact would disqualify the agreement from any force and effect pursuant to s 90C of the Act.
The legal submissions and oral argument in reply by the wife’s Counsel are, in summary, to the effect that whatever error, in this regard, is contained within the agreement and which is said to be characterised by typographical, careless, negligent or culpable error is nevertheless irrelevant. On behalf of the wife the primary submission is that “what matters is the definition of the financial agreement within section 4 of the Act and whether that is satisfied”.
Strictly, and on the agreement as drawn, parties who are divorced cannot enter into an agreement pursuant to s 90C of the Act and if that was the simple and conclusive approach then this agreement could not be classified as a financial agreement within the meaning of s 4 of the Act.
I find that approach, whilst superficially attractive, is too refined and narrow upon the evidence of the parties and their witnesses, their intention to reach a final property settlement and record same in a financial agreement, the amending legislation of the Parliament and the Second Reading Speech which I have hereafter considered. I find the primary obligation of the Court is to consider, make findings as to and, if necessary, give validity and effect to the clear and common intention of the parties consistent with the relevant sections of the Act and rectify the financial agreement if and where necessary and appropriate.

THE AGREEMENT – REFERENCES TO S 90C

I have previously highlighted that the first two legal errors in the post divorce agreement of the parties were to make reference to s 90C of the Act on the coversheet of the agreement and on the heading of the first page of the agreement, but not as part of the Recitals thereof.
In Ruane & Bachman-Ruane & Anor (2009) FamCA 1101 at paragraphs 64 and 65, Cronin J considered within the statutory requirements of Part VIIIA whether facts and all details of the agreement to be relied upon should be included within the Recital clauses rather than the operative or substantive clauses of the agreement. His Honour held that the distinction between the requirements of the Act being satisfied in the Recital, rather than the operative clauses is, within a financial agreement, a distinction without a difference. He said:
“64. In a financial agreement for the purposes of the Family Law Act, specifically drawn for the purposes of achieving the ouster of jurisdiction offered by s71A, the distinction between the recital and operative clauses is a distinction without a difference. What must be clear and unambiguous is that the parties objectively intended to oust the jurisdiction and put in place the methodology to resolve their financial affairs should the breakdown of the marriage occur. In Black and Black (supra) the Full Court referred to strict compliance with statutory requirements. The fulfilment of those requirements may be gleaned from the recital if the whole of the document addresses those matters and is properly executed (see also ASIC and Rich and Anor. (supra)).
65. Thus, if it is clear that the parties intended the document to be a financial agreement then the necessary statutory references required to make it binding can be set out in recital clauses. As a matter of precaution, the operative clauses should make clear that reliance is placed upon the recitals. However, even if incorporation by reference is not made, a court can still read into the financial agreement, the reliance upon the recitals. The only time that could not occur would be if there was an obvious inconsistency between a recital clause and an operative clause. Such an inconsistency however would have to go towards a failure to incorporate one of the statutory requirements. What the parties also need to do is show that based upon satisfying all of the requirements of the Act, the operative part of the agreement deals with the division of property (and if necessary, spousal maintenance) and that there is an intention to oust the jurisdiction.”
I agree with His Honour and for all of the reasons I have discussed find that the inclusion of the incorrect references to s 90C of the Act on the coversheet and as a heading to the Recitals does not negate the common intention of the parties to conclude a final and binding division of property. Each of these references wrongly identified the legal basis of the agreement but do not in any way impede or negate the very clear and unambiguous objective of the parties to oust jurisdiction of the Court and to settle their property and financial affairs. The fact that these two incorrect references are outside of the Recitals and substantive clauses of the agreement even more strongly supports the need for a proper rectification of the agreement in these instances to accord to the common intention of the parties.
The reference to s 90C in clause 1 of the substantive part of this agreement is a more significant mistake made by solicitors in the drafting, inspection and approval of the document before it was provided, upon their recommendation, to each of the parties for execution. Notwithstanding this mistake being more substantial than other errors within the agreement it nevertheless had no influence or impact upon the parties, or either of them, in the particular circumstances of their negotiated property settlement. I have found that this error should be rectified.

LEGAL PRINCIPALS

In Black & Black [2008] FLC 93 – 357 the Full Court considered the validity of a financial agreement which failed to include a statement that the parties had received independent legal advice in relation to all matters required by the legislation then operative. The Full Court held strict compliance with the then statutory requirements were required to oust the jurisdiction of the Court to make orders for division of property pursuant to s 79 of the Act. The Full Court followed the approach of Collier J in J & J (2006) FamCA 442 where His Honour said:
“19. To my mind, the words that appear in section 90G(1) ‘if and only if’, are words of real significance. They have a meaning. They import a requirement for a level of compliance, if the agreement is to be binding, that is clearly a standard or level above and beyond what might be described as substantial compliance. Those words ‘if and only if’ make it clear that each of the parties must ensure that that which is required to be contained and dealt with in the agreement, and the annexures to it, is in fact contained, appropriately and completely. Compliance must therefore be a full compliance, satisfying the statutory requirements.
20. Something approaching full compliance, or something that if looked at in a less than strict light, might come close to establishing compliance, is not enough. Clearly, the legislation intended that if this method of parties resolving their differences was to be used without any supervisory power of a Court, in a situation where parties’ rights were to be affected, then that which was to be done had to be done fully in compliance with that which the statute set out and required”.
The decision of Black & Black (supra) led to the introduction of the Federal Justice System Amendment (Efficiency Measures) Act 2009 (“the Amending Act”). The effect of the Amending Act upon Part VIIIA was by Schedule 5 which amended s 90G in the manner which I have hereafter discussed. It was submitted by Counsel for the wife that regardless of the amendments that “Black v Black is still good law, at least with respect to non-compliance with section 90G(1)”. That submission did not extend to s 90KA.
In contrast Counsel for the husband, in his written submissions, argued that “Parliament has made it abundantly clear that it disapproves of the so called strict compliance test and expects this Court to move from adherence thereto”.
Counsel for the husband first identified that the intention of Parliament in enacting the amending legislation was primarily “to overcome the effect of the Full Court’s decision in Black & Black”. Secondly and in the second reading speech of the Attorney-General, dated 3 December 2008, and when introducing the amended legislation in Parliament, it was said that:
“Importantly, the bill responds to the decision of the full court of the Family Court of Australia in the matter of Black and Black.
In that case, the court found that a binding financial agreement (commonly known as a pre-nuptial agreement) made under the Family Law Act 1975 was invalid because it did not strictly comply with certain technical requirements set out in the Family Law Act.
The amendments are being made because the government is concerned about the possible consequences of that decision on the validity of existing binding financial agreements which may contain technical errors.
The bill amends the Family Law Act to ensure that people who have made an informed decision to enter into one of these agreements cannot later avoid or get out of the agreement on a mere technicality, resulting in court battles that the agreement was designed to prevent. These amendments will restore confidence and certainty in the binding nature and enforceability of financial and termination agreements under the Family Law Act”. (emphasis added)
Counsel for the husband identified in paragraphs 19, 20 and 21 of his further written submissions the commentary of Senator Carr, 26 October 2009, in closing debate in the Senate upon the Second Reading of the Bill where it was said that:
“The Bill responds to the decision of the Full Court of the Family Court of Australia in Black v Black. The Bill amended the Family Law Act to limit the technical requirements that people need to meet to enter into one of these agreements while still providing necessary protections to parties – such as a requirement to get legal advice. It will restore confidence in the binding nature and enforceability of financial and termination agreements under the Family Law Act”.
Similar sentiments are recorded in the Explanatory Memoranda for the Bill (as were submitted to the Court in paragraph 20 of the husband’s further written submissions) and where it is said that such memorandum recorded that:
“Schedule 5 to the Bill amends the binding financial agreements and termination agreements pursuant to the provisions of the Family Law Act 1975 to relax certain technical requirements that must be strictly satisfied for financial agreements and termination agreements to be binding. These amendments will respond to the concerns about binding financial agreement provisions of the Act that have arisen following the decision of the Full Court of the Family Court in Black v Black. The Family Law Council has confirmed that amendments are required to restore confidence in the binding nature of these agreements”.
Schedule 5 became operative on 4 January 2010. There is a transition provision provided for in Item 8 of that Schedule so that the legislative amendments have retrospective operation to all agreements made on or after 27 December 2000 and thus catch the agreement executed by these parties on 27 July 2009.
Whilst it was a very different issue that was before the Full Court in Black & Black and which then led to the legislative amendments to the Act the principle however was the intent and actions of the Parliament to somewhat limit the strict compliance test. The concern of Government was to avoid the consequences of technical errors and thus the Act was amended so as to ensure that people who have made an informed and common decision to enter into a binding financial agreement cannot later avoid, or have the binding nature of such an agreement, dismissed on a mere technicality. What is a mere technicality is not defined by the Parliament or the amending legislation and that issue has been the subject of my deliberations in this matter. I have concluded that each of the five errors in the agreement, whilst legally substantial are of a technical nature that can and should be rectified.
I provided to Counsel the unreported decision of Collier J in Balzia and Covich [2009] FamCA 1357 where his Honour had before him a financial agreement identified as being drawn pursuant to s 90B but where it should have been drawn pursuant to s 90C; that is where the parties were and remained married at the time of executing their agreement.
The wife in that case argued that the agreement itself was not a financial agreement and, in the alternative, if it was a financial agreement it was not binding. The Trial Judge held that the agreement was void and of no effect for the various reasons stated and which I have summarised as follows:
(a)that s.90B(1)(c) provided a very clear requirement that the agreement was expressed to be and is one intended to be entered into in contemplation of marriage;
(b)that it is no mere formality to rectify any agreement and change a reference from s90B to s90C – that is His Honour was there saying from a pre-marriage circumstance to one where the parties were married and wholly subject to the provisions of s79 and s75(2) of the Act;
(c)even if rectification of the agreement were permissible the attached certificates identified as giving legal advice pursuant to s 90B of the Act could not and should not be rectified in the manner and content then required.
The issue of rectification was central to in Collier J’s decision in declaring that the agreement was not a valid financial agreement and was of no force or effect. Collier J considered the authorities with respect to rectification of the document “with great care”, and his Honour distilled at paragraph 28 that:
“what effectively is required before rectification can take place, is that it is necessary to show the parties were in complete agreement on the terms of their contract but by error, wrote them down wrongly”.
However, his Honour expressed real concerns as to the effect of rectification of the Certificates to the agreement:
[30] It seems to me that the issue is a little more complex than I had at first thought. If I were to grant rectification of the agreement, that would mean that in the agreement itself, where reference was made at present to section 90B, the document would, as rectified, refer to section 90C. My concern is am I able to rectify the certificates? The certificates themselves are required by sub-sections (b) and (c) of section 90G(1) of the Act. They are certificates given by a solicitor which indicate, in this case, both solicitors purport to have given certain advice pursuant to certain specific sections of the Act.
…
[32] Thus, to my mind, if I were to allow rectification of the deed itself, then the dichotomy would arise that the deed related to section 90C, but the certificates, because of the view that I have expressed that I cannot rectify them, remain expressing and nominating section 90B as the section of the Act to which the advice given as referred to in the certificate was directed.
[33] It seems to me that this is of particular significance. I am of the view that sections 90B and 90C do not involve the same concept. I am satisfied that to properly advise their clients, the solicitors giving the advice and completing the certificates would need to approach the agreement to be made under one such section differently from the approach to be taken and the advice to be given (which is the subject of the certificate), if the agreement is to be made under a different section. I do not know what the advice given was. It seems to me, however, fundamental that the Act draws a distinction between the two sections. Accordingly, I am of the view that it would be essential to require anyone giving proper advice, to give that advice in respect of the document being executed, and the situation that would be created by the execution of that document, and thus to make particular and accurate reference to the section under which the document was created and to have effect”.
His Honour found he could and should not rectify the certificates as they specifically and wrongly identified the section of the Act under which advice was given. As I have discussed the Certificates in this case are not referenced to any sub-section of the Act and thus that obstacle to the Court in that case is not here present. Collier J went on to say that even if rectification should be granted, the “dichotomy between the two aspects of the document” would remain. His Honour then turned to s 90G, and in considering strict compliance pursuant to Black & Black, he held that the certificate of legal advice failed the test. His Honour said:
“[41] … So far as I am concerned, it would need be properly demonstrated that the certificate satisfied any reasonably minded observer that the parties had been advised of their rights, having regard to their status as married persons. Clearly the Act draws a distinction or difference between pre-marriage, post-marriage, and post-divorce agreements. I am satisfied that because that distinction is drawn by the Act itself the nature of the advice to be given in respect of each such situation must reflect the actuality of the situation at the time the advice is given.
[42] To my mind, therefore, the difference between the advice certified to have been given and the factual situation in existence at the time the agreement, by way of deed, was signed by each of the parties means that I cannot be satisfied that the advice given, as evidenced by the solicitors’ certificates, meets the requirement that the legal practitioner for each of the parties had explained the advantages and disadvantages at the time that the advice was provided to either party entering into the agreement”.
In Balzia & Covich (supra) it was discussed as to whether an onus of proof should be found to exist and, if so, upon whom that onus should fall. It was held that the party seeking protection of the financial agreement should bear the onus to uphold the agreement. With respect I agree and therefore have proceeded upon the basis that the husband bears the onus to prove the agreement is valid, enforceable and binding.

In Ryledar Pty Ltd & Anor v Euphoric Pty Ltd (2007) 69 NSW LR 603, the New South Wales Court of Appeal held (as summarised in the case headnote) that:
1. A court, in construing a written, commercial contract, must begin with the words of the document while being alive to the possibility that what seems clear by reference only to the words on the printed page may not be so clear when one takes into account as well what was known to both parties but does not appear in the document.
2. The fact that words used in a contract convey a clear, unambiguous and unmistakable meaning or legal effect renders it less likely that the parties were mistaken as to that meaning or effect and less likely that they had a common intention which was fundamentally inconsistent with the words they had deliberately employed, particularly where the wording was proffered by the party seeking rectification of the contract.
3. It is the subjective intention of the parties that matters for rectification (as is shown by parol evidence being receivable to establish such intention in a rectification suit), but that subjective intention must be shown to be common through the parties coming to know, by some means, of each other’s intention.
In his written submissions Counsel for the husband identified and relied upon further paragraphs from the judgment in Ryledar’s case and in particular paragraphs 122 – 126 (inclusive) which read as follows:
“[122] As is observed in Meagher Gummow & Lehane Equity, Doctrines & Remedies 4th ed at 886 [26-010], it is of the upmost importance for a proper appreciation of the basis of the equitable doctrine of rectification to realise that the court, by its orders, merely reforms the instrument in which the parties have mistakenly expressed their agreement. The learned authors then cite the following passage from the judgment of Denning LJ in Frederick E Rose (London) Ltd v William H Pim Jnr & Co Ltd [1953] 2 QB 450 at 461:
“In order to get rectification it is necessary to show that the parties were in complete agreement on the terms of their contract but by an error wrote them down wrongly ...”
[123] The authors then observed that the need for rectification will thus arrive when the court can discern from the document itself and the surrounding evidence that “something must have gone wrong” which cannot be cured by the process of construction:
[124] In Maralinga Pty Ltd v Major Enterprises Pty Ltd (1973) 128 CLR 336, [Also referred to in Ruane (supra)] Mason J (at 349) noted the “more recent desire” in the authorities to “emphasise that the remedy [of rectification] is designed to relieve against the mistaken expression of the true agreement of the parties.” At 350 his Honour further observed:
“What is of importance is that the purpose of the remedy is to make the instrument conform to the true agreement of the parties where the writing by common mistake fails to express that agreement accurately. And there has been a firm insistence on the requirement that the mistake as to the writing must be common to the parties and not merely unilateral ...”
[125] This Court referred to the relevant principles in Commissioner of Stamp Duties (NSW) v Carlenka Pty Ltd (1995) 41 NSWLR 329. In agreeing with the leading judgment of Sheller JA, Mahoney A-P relevantly observed (at 331):
“In my opinion, the principle upon which rectification is granted involves two things: that ...the parties (in the case of a transaction between parties) had at all relevant times an intention which was to be given effect by the document to be rectified; and that that document does not give effect to that transaction.
[126] After noting that the courts in Australia had reiterated the necessity to establish the parties’ intention as to the written document’s failure to give effect to that intention, the Acting President directed himself to the meaning of the term “intention” stating (at 332) that in the context of rectification “it refers to what was subjectively seen as to be brought about and the consequence of it. It refers to that which is subjectively foreseen and intended to be effected by the document.”
On the facts of this case the parties negotiated and concluded an agreed contract for a division of their property. They were in complete agreement at the time of execution of that contract as to its terms. The mistakes were of a legal or identification issue unknown to the parties and of a kind that should have been known to their solicitors. The agreement simply does not reflect the common intention and outcome as negotiated by the parties. The subjective and common intention of the parties was properly expressed within the agreement, but save for the technical errors.
In Ruane & Bachman-Ruane & Ors (supra) Cronin J identified that the equitable concept of rectification may very well be open and available to correct a mistake in a financial agreement. His Honour said:
“[85] equity would normally intervene in a contractual dispute involving a mistake of fact where parties fail to accurately set out what they intended and order rectification so that the contract expressed a true intention of the parties (see Maralinga Pty Ltd v Major Enterprises Pty Ltd (1973) 128 CLR 336).
[86] In Black v Black this issue was not discussed because the Full Court found the agreement itself was flawed by not having a reference to legal advice. In some cases rectification may very well be open”.
In Ruane’s case His Honour held that the rectification was not available and proper as the certificates in that case were fundamentally inadequate in that they were not provided by a legal practitioner.
In Fevia & Carmel-Fevia (2009) FLC 93-411 816 Murphy J outlined the principle enunciated by the High Court in Sindel v Georgiou (1984) 154 CLR 661, at paragraph 13, where their Honours said:
“Rectification is a remedy which cures erroneous expressions of the parties’ true intention in a contract which is already binding. It is not a remedy which brings a contract into existence in a situation in which the parties have not by their own acts arrived at the concluded contract”. (Per Mason, Murphy, Wilson, Brennan and Dawson JJ).
Consistent with the approach adopted by each of their Honours in these two reported cases from this Court the issue before me of the remedy sought does not bring a contract into existence but cures the unintended legal and technical errors inserted by solicitors without the knowledge or understanding of the parties. I turn now to conclude my findings on the rectification issue.

RECTIFICATION OF THE AGREEMENT

Subject to the remaining submission of Counsel for the wife as to the limitation and effect of s 90KA I intend to order that the agreement executed by the parties on 27 July 2009 should properly be rectified in a manner consistent with the true intentions of the parties and the financial outcome that they intended to conclude. I find that the words used within the document do convey a very clear, unambiguous and unmistakable meaning and legal effect as to the division of assets and property of the parties. It is that subjective intention which I have concentrated upon and which highlights what each of the parties intended and instructed their respective solicitors to achieve by the agreement.
The parties were in complete agreement on the terms of their contract as to the division of their property and assets but by error the solicitors, and without the legal knowledge and understanding of the parties, prepared and endorsed the agreement as being prepared pursuant to the incorrect section of the Act. I am able to discern from the document that this was an error not intended by the parties and which can and should be the subject of correction and rectification.
The rectification of the agreement to have the document expressed to operate pursuant to s90D of the Act, only endorses the post divorce intention of the parties to conclude a division of their property and does not bring about any financial situation which, by their own actions, they had not intended.

SECTION 90KA, SUBMISSIONS OF WIFE’S COUNSEL

In his submissions in reply, counsel for the wife submitted that the husband was attempting “to use the doctrine of rectification to create a financial agreement (within the meaning of s 4) when there is no such agreement in existence in the first place.” The Court’s power to rectify a Part VIIIA agreement is found in s 90KA. That section is set out above at paragraph [63].
Counsel for wife submitted that s 90KA is not available to the Court to rectify the agreement. This argument was framed as follows:
“5.The Wife accepted that, pursuant to section 90KA, the equitable doctrine of rectification can apply to Part VIIIA agreements, in appropriate cases. There could, for example, be no doubt that where a substantive provision of a binding financial agreement did not reflect the parties’ true intention, the Court could rectify the document. Illustrations might include an incorrect description of a land title of a property to be transferred, or the incorrect expression of a monetary sum to be paid (by omission of a zero or the incorrect placement of a decimal point etc.)”
“6.What the Husband is seeking to do, however, is to use the doctrine of rectification to create a financial agreement (within the meaning of section 4) when there is no such agreement in existence in the first place. Not only is that contrary to the High Court authority of Sindel v Georgiou set out in the Husband’s Submissions, it assume the existence of a corrective power which Part VIIIA does not provide”.
“7.The Court’s power to rectify a Part VIIIA agreement comes from section 90KA. That section provides that “the question of whether a financial agreement … is valid, enforceable or effective is to be determined by the Court according to the principles of law and equity …” (my emphasis). “Financial agreement” is a defined term in section 4. Section 90KA must be read accordingly. It follows that if the parties have not entered into a “financial agreement” within the meaning of section 4, there is no agreement in existence on which section 90KA (and, hence, the doctrine of rectification) can operate. On the plain words of section 90KA, there is no other construction available. Not only does equity not permit the creation of a contract via the doctrine of rectification, even if it did, the power has not been conferred upon the Court”.
The Full Court of the Family Court discussed the practical effect of s.90KA in the recent decision of Kostres and Kostres (2009) FLC 93-420. Bryant CJ, Boland and Jordan JJ said (at [123]):
“The legislature intended a financial agreement, if binding, would oust the jurisdiction of the Court to adjust property, financial resources, and other matters the subject of the agreement. The practical effect of Part VIIIA is, (subject to the sections which permit a court in exercise of its discretion to set aside an agreement (s 90K), or to decline to enforce or test the validity, or effectiveness of the agreement (s 90KA)), to remove the provisions made in the agreement from the scrutiny of a court to ensure those provisions are just and equitable”.
The Full Court continued, and in paragraphs 128 and 129 said:
“[128] We accept that in determining whether the agreement is valid, enforceable or effective, the general law relating to contracts, as well as principles of equity, are to be applied. That must be done to give effect to the parties’ intentions at the time of the making of the agreement, and in the context of the statute. The legislature has been careful to include strict requirements if a financial agreement is to be binding, including the requirement of independent legal advice. In those circumstances it is clear the legislature envisaged, because of the nature of these agreements and the removal of the Court’s supervisory role, that parties would receive legal advice about the necessity for their intentions to be accurately and clearly reflected in the actual terms of the agreement.
[129] While, for the purpose of construing the agreement a court should, as in the context of a commercial agreement, apply an objective test of a reasonable bystander to the construction of an agreement, it cannot give meaning to an agreement whose terms are so imprecise or ambiguous the parties’ intent cannot be discerned. This is particularly so when regard is had to provisions of Part VIIIA in the overall context of the Act”.
I do not accept the construction and interpretation of s 90KA argued on behalf of the wife. It is wrongly focused. The purpose and intent of s 90KA is primarily one of enforcement of the terms of the financial agreement. The validity of the agreement is to be determined by reference to the document itself, its compliance with s 90D (on the facts of this case) and its rectification to record with the common intention and purpose of the parties. Its validity is not to be determined by s 90KA.
In this case I am not rectifying any part of the negotiated property settlement made between the parties, at a date when they were divorced. I am rectifying the unintended and unknown technical legal errors of the solicitors, without the client’s knowledge and understanding thereof. I am able to do so both pursuant to equitable principles and the Act and what I regard to be the very clear intention and directive of Parliament in the amending legislation.
Section 90KA addresses the issue of the validity, enforceability and effect of a financial agreement by a Court acting under the principles of law and equity relevant to contract law. Whilst the introductory words to that section record “validity, enforceability and effect” the section itself uses the words “valid, enforceable or effective”, thus empowering the Court to collectively but also individually consider and act upon at each of those circumstances but within its primary enforcement purpose.
The word “effective” is defined in the Oxford Dictionary of English (2^nd Edition Revised) to mean “successful in producing a desired or intended result”. The Macquarie Dictionary (5^th Edition) defines “effective” as an adjective to mean “serving to effect the purpose; producing the intended or expected result”. That purpose or intended result was a binding agreement in the terms and manner negotiated. That was “the effect” the parties agreed upon on or prior to 27 July 2009.
It is already abundantly clear from my reasons for judgment that I have found that the parties intended to successfully and finally conclude a binding agreement as to the division of property and so as to oust the jurisdiction of the Court. The parties intended that agreement to be binding and therefore both valid and effective.
Counsel for the wife further submitted that the husband was attempting to use the remedy of rectification as a means to “create a financial agreement when there is not such agreement in existence in the first place”. In support of this submission counsel relied upon the High Court decision of Sindel v Georgiou (supra) as cited by Murphy J in Fevia v Carmel-Fevia (supra) where his Honour quoted from that Judgment:
“[152] Rectification is a remedy which cures erroneous expression of the parties’ true intention in a contract which is already binding. It is not a remedy which brings a contract into existence in a situation in which the parties have not by their own acts arrived at a concluded contract”.
However Murphy J continued and importantly said that:
“[153] While it may be true that the parties each had an intention to enter an agreement that was intended to operate in the manner envisaged by ss 90G and 71A, that is not the end of the necessary inquiry as to the mutuality of their intention.
[154] In some cases, it is possible to discern the true intention of the parties despite the existence of two parts of the agreement. In those cases “to treat the discrepancies between the two parts as producing a different result is to impute to the parties an intention that they did not have”: “Equally, however, if the discrepancies are such that the intention that the parties had cannot be properly discerned, treating the two parts as forming a contract is to attribute a mutuality of intention not revealed in the two documents”.
Sindel v Georgiou (supra) concerned an action for specific performance in respect to an exchange of a contract for the sale of land between the vendor and purchaser after an unsuccessful auction. The exchange of the contracts, which were not identical and were incomplete, was carried out with the intention of making a binding agreement. In their joint judgment, Mason, Murphy, Wilson, Brennan and Dawson JJ held at paragraph 27 that:
“If the parties, through negotiations between their solicitors, have agreed on the terms of their bargain and settled on an exchange of parts in order to seal that bargain, it would usually accord with their intention to treat the exchange as creating a binding contract, notwithstanding the lack of correspondence in the parts, so long as that lack of correspondence was capable of being remedied by rectification.” (At p. 667).
While the statement of the principle of rectification is relied upon by Counsel for the wife in relation to only being available for a binding and concluded contract, that statement as outlined in paragraph 103 hereof must be read in context to the facts and circumstances of each case. In the present case, the parties exchanged agreements and intended to enter into a binding financial agreement. The agreement was concluded and I find that it is not open to the wife to singly override the exchange of the contracts and the common intention held by both parties. As the High Court also said in Sindel v Georgiou (supra) at paragraphs 24 and 25.
“…exchange is the event which brings into existence a binding contract — without exchange there is no contract and hence no basis on which to found a rectification. Rectification is a remedy which cures erroneous expression of the parties’ true intention in a contract which is already binding. It is not a remedy which brings a contract into existence in a situation in which the parties have not by their own acts arrived at a concluded contract.
An unqualified acceptance of the proposition that delivery of two parts in identical terms is crucial to an effective exchange would exclude the parties’ intention as the governing or, even as a relevant, factor. The question whether the delivery of parts in identical terms is essential must ultimately depend on the parties’ intention. The answer to this question determines the manner in which the contract becomes binding. …”
For all of the reasons therefore considered in this judgment I conclude that it is proper that I make orders to rectify each of the technical errors within the agreement. That rectification required each of the three references to s 90C being changed to s 90D and also the insertion of the correct given names of the parties in clauses 2 and 3 of the annexed Solicitor’s Certificates. I conclude that is a just, appropriate and intended outcome. When so rectified I declare that the agreement executed on 27 July 2009 by each of the husband and wife is a financial agreement pursuant to s 90D of the Act. I am satisfied that the husband discharged his onus of proof in these proceedings.
All of the other orders sought by the wife in her amended application remain extant though it could clearly be inferred from these reasons that the order sought in paragraph 3 thereof relevant to the annexed Solicitor’s Certificates must be read in the context of the preliminary findings delivered in these reasons for judgment.
The wife’s solicitor still holds the husband’s settlement cheque for $28,000 and I will invite submissions from both parties as to what now should occur in this regard.
I will reserve the question of costs of and incidental to this hearing on the papers to the trial Judge and I will relist all extant applications before me on 23 July 2010 at 10.00 a.m.

I formally acknowledge the helpful written legal submissions received from Counsel and the considerable work and effort that they devoted to those submissions.

I certify that the preceding paragraphs are
a true copy of the reasons for judgment herein
of The Honourable Justice Young

………………………………………………………..
Associate: