Thorne v Kennedy

The applicant, Mr. Foley, sought special leave to appeal to the High Court of Australia concerning the principles of law and equity applicable to setting aside financial agreements made under Part VIIIA of the *Family Law Act 1975* (Cth). The dispute centred on whether the existing legal and equitable doctrines, such as duress, undue influence, and unconscionable conduct, should be applied differently in the context of marital financial agreements compared to commercial contracts, particularly given the unique nature of marriage and the public policy considerations surrounding it.

The core legal issues before the Court were whether the application of established doctrines of duress, undue influence, and unconscionable conduct requires special consideration within the context of marital financial agreements, and if so, how those principles should be interpreted and applied. Specifically, the applicant argued that the traditional application of these doctrines, often derived from commercial contexts like bank guarantees, might not adequately address the power dynamics and public policy considerations inherent in marital relationships. The Court was asked to provide authoritative guidance on these matters, which had not been previously addressed by the High Court.

The applicant contended that there is a distinct public policy interest in supporting and maintaining marital relationships, which differs from the policy considerations in commercial transactions. This, it was argued, necessitates a careful application of legal and equitable principles, rather than a rigid adherence to analogies drawn from cases involving banking or commercial guarantees. The applicant highlighted the circumstances of the case, where an agreement was allegedly signed under duress four days before a wedding, as illustrating the need for a nuanced approach to doctrines like duress and unconscionable conduct, particularly when a party may lack a reasonable alternative or be subject to overwhelming pressure. The respondent, however, argued that Parliament had determined the policy through the *Family Law Act*, which mandates the application of the law of contract, and that the statutory requirements for independent legal advice before entering such agreements mitigate concerns about special disadvantage or undue influence.