Viswan & Parveen (No 2)
[2023] FedCFamC2F 666
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Viswan & Parveen (No 2) [2023] FedCFamC2F 666
File number(s): PAC 2990 of 2019 Judgment of: JUDGE NEWBRUN Date of judgment: 1 June 2023 Catchwords: FAMILY LAW – PROPERTY – Financial agreement set aside – Just and equitable property Orders made. Legislation: Family Law Act 1975 (Cth) ss 90B, 90G, 90K, 90KA Cases cited: Hoult & Hoult [2013] FamCAFC 109
Lotta & Lotta [2017] FamCA 50
Thorne v Kennedy (2017) 263 CLR 85
Division: Division 2 Family Law Number of paragraphs: 231 Date of hearing: 8–10 March 2023 Place: Parramatta Solicitor for the Applicant: Mr Prakash Counsel for the Respondent: Mr Gunning Solicitor for the Respondent: Joseph Grassi & Associates ORDERS
PAC 2990 of 2019 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: MS VISWAN
Applicant
AND: MR PARVEEN
Respondent
order made by:
JUDGE NEWBRUN
DATE OF ORDER:
1 June 2023
THE COURT ORDERS THAT:
1.The financial agreement signed by the parties in about 2013 be set aside.
2.Within 10 weeks the husband shall pay to the wife the sum of $225,992.
3.Failing the husband complying with Order 2, then the property at B Street, Suburb C (hereinafter “the property”) shall be listed for sale by private treaty for a period of three (3) months with an agent as agreed by the parties.
4.That in the event of any disagreement between the parties with respect to listing price, listing agent or solicitor/Conveyancer on sale then:
(a)In the event of any disagreement with respect to a listing agent at any time, either party may make application to the President for the time being of the Real Estate Institute of NSW who shall then, upon such application being made, appoint an agent to act on behalf of the parties and the parties shall then:
(i)Engage and instruct that agent to act on their behalf.
(ii)Provide all co-operation and assistance to the agent as is required to enable the agent to effectively list the property, advertise the property for sale and undertake and allow inspections of the property by prospective purchasers.
(iii)Sign all documents necessary with respect to the engagement of such agent and negotiate payment of commission to the agent as is customary for work of that nature and that in the event of any disagreement or impasse with respect to commission, the President for the time being of the Real Estate Institute of NSW shall determine such dispute upon application of either party or the agents so instructed.
(b)In the event of any disagreement as to listing price then the parties shall obtain from the agent with whom the property is at such time listed, a realistic appraisal of the selling price of the property on the basis of an eager but not overanxious vendor and the parties shall then list the property for sale at 105% of that price and shall accept all and any offer or purchase at that price or 95% thereof; and
(c)In the event of any disagreement as to the solicitor/Conveyancer to be engaged by the parties on sale, then either party may make application to the President for the time being of the Law Society of NSW who shall then appoint a solicitor to so act and each party shall thereafter do all things and sign all documents necessary to engage and instruct that solicitor and provide full and timely instructions to the solicitor with respect to the sale and such solicitor shall be paid such fees as are negotiated between the parties and that solicitor or in the absence of agreement with respect to same as are determined by the President for the time being of the Law Society of NSW on the application of either party or the solicitors who are instructed.
5.In the event that the property has not been sold by or before a date three (3) months from the date of listing with such agent as provided above then the parties shall make all such arrangements and do all such acts and sign all such documents necessary to:
(a)List the property with such agents as provided herein at such price as advised by the President of the Real Estate Institute with further reviews of such price on a monthly basis until the property is sold; and
(b)The parties shall further adopt such marketing program as may be advised by the President of the Real Estate Institute NSW.
6.That upon sale of the property, the parties shall do all things and sign all documents necessary so as to cause the net proceeds of the sale of the property (after adjustment of Council rates and water rates), to be distributed as follows and in the following order and priority:
(a)Payment of mortgage.
(b)Payment of agent's commission, legal fees on sale and other costs incidental to the sale.
(c)To the wife the sum of $225,992 less her half share of the payments in (b) above.
(d)To the husband the sum of $143,770 less his half share of the payments in (b) above.
7.That until the property is sold, the husband shall make all payments and outgoings, including mortgage payments, council rates, water rates and insurance.
8.That the husband shall ensure that the property is presented in a reasonable manner so as to obtain the highest possible price for sale and should the husband conduct himself in a manner which adversely affects the presentation of the property for sale, then the agent shall do all that is necessary to ensure that the property is satisfactorily tidy and presentable, and the husband shall be liable for all costs and expenses for reparation.
9.Subject to the above Orders, pursuant to section 78 of the Family Law Act that each of the wife and the husband shall be and hereby are declared to be the sole and absolute owners at law and in equity of all real estate, items of furniture, furnishings, personality, chattels, jewellery and monies (whether held in cash or in deposit with any bank, building society, credit union or other financial institution) remaining in each party's possession, custody or control together with all contributions to or benefits or entitlements arising from membership of any fund of insurance or superannuation whether such interest be present, contingent or expectant.
10.That in the event that either party should fail, neglect or refuse to sign or execute any deed, document or instrument required by or to give effect to these Orders then pursuant to section 106A of the Family Law Act the Registrar of the Family Court of Australia, Suburb S Registry shall be and is hereby authorised, empowered and directed to sign and execute such deed, document or instrument in the place and instead of such party and to thereafter do all things and acts as are necessary to give validity and operation to same.
11.Order 2 of the Orders made by Senior Judicial Registrar D on 10 March 2022 be discharged.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under a pseudonym Viswan & Parveen (No 2) has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
JUDGE NEWBRUN:
INTRODUCTION
These are Reasons for Judgment relating to a final property hearing held before the Court on 8–10 March 2023.
The applicant wife and respondent husband both appeared, legally represented.
PROPOSALS
The wife seeks orders as set out in her Amended Initiating Application filed 30 June 2022 and reproduced in her case outline filed 2 March 2023, inter alia, that:
·The Financial Agreement (“the agreement”) signed by the parties in 2013 be set aside;
·The following properties be sold and the net proceeds be split equally between the parties:
·E Street, Suburb F, NSW (“the E Street, Suburb F property”);
·B Street, Suburb C NSW (“the B Street, Suburb C property”);
·G Street, Suburb H, ACT (“the G Street, Suburb H property”).
·The wife receive at least 40 per cent of the husband’s superannuation whenever a splittable payment becomes payable from his interests in his two superannuation assets.
The husband seeks orders as set out in his case outline filed 2 March 2023 that the wife’s Initiating Application filed 26 June 2019 be dismissed with costs, and that the spousal maintenance Order made on 1 April 2023 be discharged.
MATERIAL RELIED UPON
The wife relied upon the following documents:
(a)Case outline filed 2 March 2023;
(b)Amended Initiating Application filed 30 June 2022;
(c)Her Financial Statement filed 1 March 2023;
(d)Her affidavit filed 18 August 2022;
(e)Affidavit of Ms J filed 3 May 2021;
(f)Her solicitor’s written submissions (15 pages);
(g)Her solicitor’s medical summary (2 pages).
The husband relied upon the following documents:
(a)Case outline filed 2 March 2023;
(b)His Financial Statement filed 6 March 2023;
(c)His affidavits filed 25 October 2019 and 12 August 2022;
(d)His counsel’s written submissions filed 8 May 2023.
The exhibits were as follows:
(a)Exhibit A: Affidavit of Mr Q affirmed 8 September 2020;
(b)Exhibit B: Subpoena to Mr R dated 16 September 2019 and response to subpoena;
(c)Exhibit C: Wife’s Statement of Claim in the District Court of NSW;
(d)Exhibit D: Affidavit of wife filed 27 June 2019;
(e)Exhibit E: Joint balance sheet (as at trial date);
(f)Exhibit F: ANZ account of husband and husband’s recent mortgage statements;
(g)Exhibit G: ANZ loan account documents and superannuation documents;
(h)Exhibit H: Minute of consent orders regarding further evidence to be adduced;
(i)Exhibit I: Joint balance sheet (as at separation);
(j)Exhibit J: ANZ letters regarding home loan balances on properties.
APPLICATION TO SET ASIDE THE FINANCIAL AGREEMENT
Evidence
The Court has considered the documentary material relied upon by the parties discussed above, and the oral evidence of the parties and witnesses adduced at the trial. The standard of proof applied by the Court in respect to the evidence is the balance of probabilities. The Court does not propose to set out the entirety of the evidence. Relevant evidence relating to the issues to be determined will be set out below and under the headings “Undue influence”, “Unconscionable conduct”, and “Causation”. Where there is any conflict between the evidence referred to below and under those headings, the evidence under the headings “Undue influence”, “Unconscionable conduct” and “Causation” shall take precedence.
As to the Court’s impressions of the husband and wife as witnesses, the Court found that each witness sought to give responsive answers to questions asked of them. However, in significant respects the recollections of each party were incorrect (as discussed later in these Reasons) relating to the circumstances leading up to and including each party signing the financial agreement. And further, the Court had a particular concern in relation to the husband’s evidence by reason of his oral evidence conceding significant errors in his affidavits filed 25 October 2019 and 12 August 2022.
Wife’s affidavit filed 18 August 2022
The wife was born in 1985 in India and is 38 years.
The husband was born in 1980 and is aged 42 years.
The parties commenced living together in Sydney in 2013.
The parties married in 2013.
The parties separated in late February 2019.
Prior to the relationship, the wife was an Indian national in India and lived with her parents.
The wife’s parents were elderly, and she provided social support to them in India prior to the parties’ relationship.
The wife was granted Australian permanent residency in 2016.
The wife has an arts degree from M University, India, graduating in about 2005.
The wife obtained a TAFE certificate in beauty therapy in 2019.
The wife commenced IT studies in 2021.
The husband has a post graduate degree in primary industry from N University, Australia, which he obtained in 2005.
The husband has a degree from O University.
In or about 2013, the husband said to the wife: “I want to get married to you, but you need to sign the agreement”.
The wife said: “If you want to marry me, why do I need to sign the agreement?”
The husband said: “If you don’t sign the agreement, I will not marry you”.
The wife said: “What do I do?”
The husband said: “My lawyer has prepared the agreement, and you need to sign”.
The wife said: “Where is the document?”On or about late 2013, the husband said: “The agreement is ready, you will have to sign it”.
The wife said: “What is really in the agreement?”
The husband said: “Whatever property I have is now mine, and whatever you have now is yours, and whatever we have during the relationship is ours”.
The wife said: “Well, I do not understand the law here, but why [do] I have to go see a lawyer?”
The husband said: “He will have to explain the document that I have signed and then you sign”.
On or late 2013, the husband said: “I have signed the Agreement and you need to obtain Independent Legal Advice”.
The wife said: “Why is that?”
The husband said: “That is the law”.
The wife said: “What do we do now?”
The husband said: “Meet me at Train Station P”.On or about late 2013, the wife met the husband at Train Station P, who said: “We have to go to Mr Q’s office. He will give you Independent Legal Advice.”
The wife met the husband in Sydney and attended upon Mr Q, solicitor, (“Mr Q”) for the first time around late 2013.
The wife did not see or read the agreement before this meeting.
The wife had not previously met Mr Q.
The wife had not previously communicated with Mr Q.
After the agreement was signed the husband said “now I can get married to you”.
The first time the wife received a copy of the agreement was on 20 February 2019 from the husband via email.
The wife did not receive any written advice from Mr Q in relation to the agreement.
Husband’s affidavit filed 25 October 2019
The husband denied the wife’s account of their entry into the agreement.
Prior to meeting the wife in 2012 the husband was into property investment. The husband stated that asset protection was a primary rule in property investment, including by negotiating a prenuptial agreement prior to entering into a relationship.
The husband wanted a financial agreement with the wife to bring peace of mind to both parties in the event of a relationship breakup.
The husband engaged Mr R solicitor to act for him in relation to a prenuptial agreement.
The husband took the wife to an appointment he had in 2013 with Mr R in his Suburb S Office. After the husband signed his section of the agreement witnessed by Mr R, Mr R emailed to suggest the wife obtain independent advice in relation to the agreement from Mr Q.
In 2013 the parties attended Mr Q’s office in Sydney.
The husband alleges that he was present in the background while Mr Q went through the contents of the prenuptial documents with the wife and provided her with independent advice on the prenuptial agreement. He alleges that the wife made certain statements to Mr Q. The Court does not accept this evidence and finds that Mr Q and the wife were alone in Mr Q’s office when Mr Q and the wife discussed the agreement, and the husband likely could not hear their discussions.
Husband’s affidavit filed 12 August 2022
In this affidavit, the husband alleges that he was present in Mr Q’s office when Mr Q and the wife discussed matters relating to the financial agreement including Mr Q advising the wife and the wife making certain statements to Mr Q in relation to the agreement. The husband alleges that he heard Mr Q make certain statements to the wife prior to entering a meeting room. He alleges that he heard Mr Q make certain statements to the wife after Mr Q and the wife came out of a meeting facility. The Court rejects these allegations of the husband. Again, the Court finds that Mr Q and the wife spoke privately in relation to the agreement and not in the presence of the husband, and the husband likely could not hear their discussions.
Oral evidence of the wife
In evidence in chief, the wife was asked whether at any stage she had said to Mr Q that the agreement was just a piece of paper and that it didn’t bother her. The wife replied in the affirmative.
The wife stated that when the marriage was proposed she did not know of the husband’s low sperm count.
The wife stated that she came to Australia in 2013. At that time she was able to speak English but she was not fully fluent. She stated that she could not understand English that much on coming to Australia. She stated that she could not understand English fully or very well at that time.
She stated that she had finished her degree in information technology in 2022; it was done at T University.
The wife stated that she did not remember if Mr R was present at Mr Q’s office in late 2013. She stated, in reference to paragraph 110 of her affidavit filed 18 August 2022, that “if I’m saying ‘I believe’ it means I’m not recollecting the things. I don’t remember…Of course, this is ten years how can – I’m a human being. I don’t remember. It’s almost ten years.” A short time later she stated that she assumed that Mr R was present as Mr Q had said in her presence “Here is Mr R”.
The wife agreed that Mr Q had told her that if the parties separated she could not claim any more of the family assets.
The wife agreed that she had told Mr Q that she wanted to sign the agreement.
The wife stated that when she read clause 7 of the agreement (“Independent legal advice”) she did not understand it.
The wife stated that Mr Q did not give her a copy of the agreement.
The wife stated that she did a hospitality certificate from TAFE prior to separation.
Oral evidence of the husband
The husband stated he was a professional contracted to the Employer U; he works two days in City V and three days in Sydney.
In relation to Annexure A to the agreement, namely the husband’s real property at G Street, Suburb H, ACT, and B Street, Suburb C, NSW, the husband stated that he did not provide any market valuations to his former solicitor Mr R. He confirmed that he did not provide any supporting documents to the solicitor regarding the assets and liabilities set out in Annexure A.
The husband was asked whether he had an initial meeting with Mr R in 2013. The husband replied in the negative stating that the parties went to see him in 2013, one month before he signed the agreement. He stated that the meeting was at the solicitor’s Suburb S office. The solicitor did not have any agreement documents at that stage. At this meeting the terms of the agreement were not discussed. The solicitor had allegedly told the wife that she needed her own lawyer to give her independent legal advice.
The husband alleged that later he spoke to Mr R on the telephone. He stated that in one telephone call the solicitor told him that the agreement was ready and the husband met him at Train Station W in 2013.
The husband confirmed that Mr R had contacted Mr Q initially, and the husband had emailed Mr Q in 2013 attaching a copy of the agreement.
The husband stated that long before the agreement, he had gone to a medical specialist who told him that he might have a low sperm count. He confirmed that prior to the agreement he had not discussed with Mr R or the wife that he might have a low sperm count.
The husband’s attention was drawn to paragraph xxxx of his affidavit filed 25 October 2019 (on page 9). The husband stated that the content of this paragraph was a wrong version of events. He stated that the location where he met Mr R was in Sydney, in X Street, Train Station W not Suburb S. In this context, he stated that there had been some memory issues for him. He was asked whether matters were fresh in his mind when he made the above affidavit, to which he replied, “not really, I was under a lot of stress.”
The husband’s attention was drawn to paragraph xxxxi of the above affidavit (pages 9 and 10). He stated that this paragraph contained a wrong version of events. He stated that he had a memory loss. He stated that in fact the wife was not present when Mr R explained the agreement to him.
The husband confirmed that part of his affidavit filed 25 October 2019, paragraph (xxxxiii) (page 10), where he had stated that he and the wife had been in Mr Q’s room for more than 40 minutes whilst Mr Q went through the contents of the agreement with the wife. He confirmed that the wife had signed the agreement in his presence. He stated that he did not recall Mr Q asking him to leave the meeting with the wife at any stage and that he was there the whole time and again he stated that he saw the wife sign the agreement.
The husband’s attention was drawn to his affidavit filed 12 August 2022, paragraph 76, where he had stated that Mr Q had told him that he was not allowed to enter the meeting room. The husband stated that this evidence was incorrect.
The husband’s attention was drawn to the above paragraph 76 where he had stated that he had “sat behind in close proximity to the meeting room door in the office”, that he had “remained outside the meeting room”, and that he “could not see or clearly hear any conversation between Mr Q and [the wife] as the ‘meeting facility’ had thick opaque walls”. He stated that this evidence was incorrect.
The husband stated that he disagreed with Mr Q’s evidence that he, Mr Q, was alone with the wife when he advised her in relation to the agreement.
Mr R
Mr R gave oral evidence. He had not prepared an affidavit.
Mr R, solicitor, had acted for the husband in 2013 in relation to the preparation of a prenuptial agreement. He drafted the agreement. His file in relation to the preparation agreement had been destroyed in 2018.
The solicitor stated that he had received instructions from the husband and proceeded to draft the agreement. In relation to Annexure A to the agreement, which refers to assets with monetary figures, he stated that he had received instructions from the husband in relation to these figures. He stated that he did not have any supporting documents to confirm the figures provided by the husband, and that the figures provided by the husband were his estimated values. He stated that the husband had instructed him that the parties had agreed to the husband’s estimated figures.
The solicitor stated that he had prepared the agreement under section 90B of the Family Law Act 1975 (Cth) (“the Act”) as the parties were not married at the time. He stated that the reference to section 90C of the Act in recital F of the agreement was an error and should have referred to section 90B.
The solicitor stated that he met the husband in 2013. The husband signed the agreement on that date. He stated that he did some research on Google and spoke to Mr Q who agreed to act for the wife. He had sent an email to Mr Q in 2013. In that email the solicitor’s reference to, “The parties are happy with the doc” was written on instructions from the husband.
The solicitor stated that at the time of receiving instructions from the husband for the agreement he did not have any knowledge that the husband had a low sperm count.
The solicitor stated that he did not go with the husband and wife to Mr Q’s office to sign the agreement in late 2013.
The Court accepts Mr R’s evidence; he was a satisfactory witness.
Mr Q
Mr Q’s affidavit affirmed 8 September 2020 became Exhibit A in the proceedings.
Mr Q had been admitted to practice as a solicitor in NSW in 2011. He commenced practice with Y Law Firm in 2011 under the supervision of Mr Y. He estimates that during 2013 about 10 to 20 per cent of his practice was in family law matters. He estimates that as at late 2013 he had advised clients in respect of financial agreements under the Act in about 10 to 15 matters.
Mr Q stated that he predominantly practised in the Country Z community with Language Z being his primary language and English being his second language.
He confirmed that he had signed a certificate of independent legal advice in 2013 in relation to the agreement which he annexed to his affidavit.
He stated that he reviewed the agreement prior to the appointment with the wife in 2013. He stated that he recalled that the conference with the wife lasted about 25 to 30 minutes in 2013. He stated that both the husband and wife had arrived at his office. He stated that he had had no communication with the wife prior to the conference in 2013.
He stated that he initially met the husband and wife in his office and after the introductions he asked the husband to leave his office as he needed to give the wife independent legal advice. He stated that the husband left his office and he had a conference alone with the wife.
As to the advice given by Mr Q in relation to the agreement, Mr Q stated that he communicated with the wife in English and observed that the wife spoke English well.
Mr Q stated that he explained the agreement by reading each of the clauses and explaining their effect. The wife had asked some questions during that explanation. He stated that he recalled discussing with the wife the issue of anticipated contributions by the parties during the marriage and the circumstances referred to in clause 4(c) of the agreement.
Mr Q stated the following conversations with the wife:
The wife said: “What are the consequence if I signed this agreement?”
[Mr Q] replied: “If you separate you are not able to claim any more of the family assets. This Financial Agreement lists all the property your husband has and your assets are almost zero. You will not be able to claim on his assets notwithstanding what happens during the marriage.”
Mr Q states that he then had a conversation with the wife to the following effect:
Wife: “I have no option but to sign the Agreement.”
[Mr Q]: “Why?”
Wife: “If I do not sign the Agreement he will not marry me and I may have to go back to India because he may not sponsor me any more with the partner visa.”
[Mr Q]: “My job here is to give you independent legal advice so that you know what you are signing. If you sign this you will not be able to bring a claim for property settlement for a share of your husband’s assets in the event you separate. Depending on the length of time of your marriage this could be quite serious for you. I also need to explain the advantages and disadvantages. An advantage may be that you will avoid litigation and both parties are very clear about your contributions during the marriage which may promote harmony. The disadvantage is that you are only entitled to your own assets as set out in the Financial Agreement and your husband has many more assets. What would you like to do?”
Wife: “I have no choice I have to sign this Agreement otherwise I won’t be married.”
[Mr Q]: “You don’t have to sign the Agreement.”
Wife: “I want to.”
Mr Q states that the wife then proceeded to sign the agreement in his presence and he signed the statement of Independent Legal Advice.
Mr Q gave oral evidence.
Mr Q confirmed that he only met the wife once in late 2013 being the day that he provided his certificate (of independent legal advice).
Mr Q stated that he had perused the agreement before he met the wife. He stated that before he saw the wife he could not say whether he was happy or not with the agreement.
Mr Q stated that he did have concerns with the agreement. The concern he had was that the assets of the husband were listed in the agreement but that the wife had no assets. Elaborating his concern, he stated that the agreement stated that upon separation the wife had no rights to challenge the agreement, and that the wife was not able to share a part of the husband’s assets in the future. He stated that he addressed these concerns by acknowledging his need to talk to the client.
Mr Q stated that he advised the wife pursuant to section 90B of the Act.
Mr Q’s attention was drawn to clause 4(b) of the agreement. He stated that he could not recall what his understanding was of that clause at the time he met with the wife.
Mr Q confirmed that he explained each clause of the agreement with the wife.
Mr Q stated that after he read the agreement line by line to the wife the wife had understood each clause.
Mr Q’s attention was drawn to paragraph 21 of his affidavit, in particular his evidence that the wife had told him that she had no option but to sign the agreement, and that the wife had told him that if she did not sign the agreement the husband would not marry her. Mr Q was asked whether those statements of the wife to him caused him any concern as a prudent practitioner, to which he replied in the affirmative. Mr Q stated that he was concerned that the wife may be forced to enter into the agreement. When asked what he did about that concern he gave this evidence:
I asked her, “Do you understand the consequence if you sign this agreement?”…And she said she understood, but she has to sign, because if she refused (to) sign he will not marry her. She will lose her permanent resident entitlement.”
Mr Q was asked whether he did anything about his above concern and he stated:
I told her that my job is to provide independent legal advice. I need to ensure she is willing to enter into this agreement, not by force, not by coerce.
Mr Q was then asked whether he did anything in that regard, to which he stated that he asked the wife, “Are you sure you want to sign this agreement?” and she said, “Yes, I must sign”.
Mr Q was asked whether it was correct that the wife had signed the agreement against his advice. Mr Q in response stated:
“I did not give her advice that she should not sign…As long as she was willing to sign…She can sign as long as she was aware of the consequence of signing the agreement.”
Mr Q stated that the husband’s solicitor Mr R was not present at his office in 2013.
Mr Q stated that the husband was not present in his own office when he provided his legal advice to the wife.
Mr Q agreed that the wife spoke English well.
Mr Q stated that the wife understood what he was reading to her, namely each clause of the agreement, as he was asking the wife questions about what she understood and she answered.
Mr Q stated that it was his impression that she understood each clause in the agreement and she agreed to sign it.
Mr Q agreed that he had had for several weeks in late 2013 to review the agreement as the husband had sent an email to him in 2013 attaching the agreement (“to be signed by my partner in your presence as witness”).
The Court accepts Mr Q’s evidence.
Legal principles
Relevant statutory provisions and legal principles will now be set out in relation to the wife’s proposed order seeking to set aside the financial agreement.
Section 90K(1)(b) of the Act provides that a financial agreement may be set aside if the agreement is void, voidable or unenforceable.
Section 90K(1)(e) of the Act provides that a financial agreement may be set aside if a party to the agreement engaged in conduct that was, in all the circumstances, unconscionable.
Section 90KA of the Act provides, inter alia, 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 that are applicable in determining the validity, enforceability and effect of contracts and purported contracts.
The wife contended that the binding financial agreement should be set aside on the grounds of, inter alia, undue influence and unconscionable conduct. These grounds were addressed by the High Court in the matter of Thorne v Kennedy (2017) 263 CLR 85.
In explaining the concept of undue influence, Kiefel CJ, Bell, Gageler, Keane and Edelman JJ stated the following:
31In 1836, in a passage which was copied verbatim by Snell 30 years later, Story said that a person can be subjected to undue influence where the effect of factors such as pressure is that the person “has no free will, but stands in vinculis [in chains]”. He explained that “the constant rule in Equity is, that, where a party is not a free agent, and is not equal to protecting himself, the Court will protect him”. In 1866, this approach was applied in equity by the House of Lords, recognising undue influence in a case of pressure that deprived the plaintiff of “free agency”. In 1868, in probate, Sir James Wilde also described undue influence as arising where a person is not a “free agent”. In Johnson v Buttress, Dixon J described how undue influence could arise from the “deliberate contrivance” of another (which naturally includes pressure) giving rise to such influence over the mind of the other that the act of the other is not a “free act”. And, in Bank of New South Wales v Rogers, McTiernan J characterised the absence of undue influence as a “free and well-understood act” and Williams J referred to “the free exercise of the husband’s will”.
32The question whether a person’s act is “free” requires consideration of the extent to which the person was constrained in assessing alternatives and deciding between them. Pressure can deprive a person of free choice in this sense where it causes the person substantially to subordinate his or her will to that of the other party. It is not necessary for a conclusion that a person’s free will has been substantially subordinated to find that the party seeking relief was reduced entirely to an automaton or that the person became a “mere channel through which the will of the defendant operated”. Questions of degree are involved. But, at the very least, the judgmental capacity of the party seeking relief must be “markedly sub-standard” as a result of the effect upon the person’s mind of the will of another.
…
34There are different ways to prove the existence of undue influence. One method of proof is by direct evidence of the circumstances of the particular transaction…Another way in which undue influence can be proved is by presumption…. A presumption, in the sense used here, arises where common experience is that the existence of one fact means that another fact also exists. Common experience gives rise to a presumption that a transaction was not the exercise of a person’s free will if (i) the person is proved to be in a particular relationship, and (ii) the transaction is one, commonly involving a “substantial benefit” to another, which cannot be explained by “ordinary motives”, or “is not readily explicable by the relationship of the parties”. Although the classes are not closed, in Johnson v Buttress Latham CJ described the relationships that could give rise to the presumption as including parent and child, guardian and ward, trustee and beneficiary, solicitor and client, physician and patient, and cases of religious influence.
(Footnotes omitted)
In Thorne v Kennedy, the wife’s submission that she was entitled to the benefit of the presumption of undue influence because the relationship of fiancé and fiancée should be recognised as one to which the presumption attached was rejected by the Court.
At paragraph 60, the majority identified the following relevant factors which may have prominence in determining undue influence in the context of pre-nuptial and post-nuptial agreements:
(i)whether the agreement was offered on a basis that it was not subject to negotiation;
(ii)the emotional circumstances in which the agreement was entered including any explicit or implicit threat to end a marriage or to end an engagement;
(iii) whether there was any time for careful reflection;
(iv) the nature of the parties’ relationship;
(v) the relative financial positions of the parties; and
(vi) the independent advice that was received and whether there was time to reflect on that advice.
In relation to unconscionable conduct, the majority stated:
38A conclusion of unconscionable conduct requires the innocent party to be subject to a special disadvantage “which seriously affects the ability of the innocent party to make a judgment as to [the innocent party’s] own best interests”. The other party must also unconscientiously take advantage of that special disadvantage. This has been variously described as requiring “victimisation”, “unconscientious conduct”, or “exploitation”. Before there can be a finding of unconscientious taking of advantage, it is also generally necessary that the other party knew or ought to have known of the existence and effect of the special disadvantage.
(Footnotes omitted)
The majority acknowledged that while there may be overlap between unconscionable conduct and undue influence, they have distinct spheres of operation:
40One difference is that although one way in which the element of special disadvantage for a finding of unconscionable conduct can be established is by a finding of undue influence, there are many other circumstances that can amount to a special disadvantage which would not establish undue influence. A further difference between the doctrines is that although undue influence cases will often arise from the assertion of pressure by the other party which might amount to victimisation or exploitation, this is not always required. In Commercial Bank of Australia Ltd v Amadio, Mason J emphasised the difference between unconscionable conduct and undue influence as follows:
“In the latter the will of the innocent party is not independent and voluntary because it is overborne. In the former the will of the innocent party, even if independent and voluntary, is the result of the disadvantageous position in which he is placed and of the other party unconscientiously taking advantage of that position.”
(Footnote omitted)
Undue influence
Again, the Court accepts the evidence of Mr Q.
Mr Q presented well as a witness and he was frank in his answers to questions posed to him and gave responsive answers. His affidavit evidence gave reasons as to why he had an independent recollection of meeting with the wife in 2023, and his affidavit evidence relating to the wife telling him that she had no option but to sign the agreement and her related reasons was supportive of such recollection. The Court observes that by the time Mr Q gave his oral evidence in this Court on about 8 March 2023 he was an independent witness and not a party to these proceedings.
The Court rejects the evidence of the wife and husband where in conflict with Mr Q’s evidence.
For instance, in relation to the wife’s evidence, the Court rejects her evidence that Mr Q did not provide her with any legal advice relating to the agreement, and rejects her evidence that Mr Q was only in his office for about five minutes together with the husband and Mr R. The Court rejects her evidence that Mr R read the agreement to her in the presence of the husband, that Mr R was present with the husband and Mr Q, and that Mr R witnessed her signing the agreement; this evidence of the wife was inconsistent with both Mr Q’s evidence and Mr R’s evidence.
In relation to the husband’s evidence, for instance, and again, the Court rejects his evidence that he was present with the wife and Mr Q whilst Mr Q gave advice to the wife in relation to the agreement and during Mr Q and the wife’s discussions in relation to it.
The husband’s evidence proved to be unreliable in significant respects. For example, in that context, he readily conceded that significant parts of both of his affidavits were incorrect. In this context, he had referred to his own memory loss and stress.
The Court accepts the evidence of the wife where in conflict with the husband in respect to her discussions with the husband relating to the agreement prior to her meeting with Mr Q in 2013. In particular, the Court accepts her evidence in her affidavit filed 18 August 2022 as follows:
101.On or about 2013, the respondent [husband] said: “I want to get married to you, but you need to sign the agreement”.
I said: “If you want to marry me, why do I need to sign the agreement?”
He said: “If you don’t sign the agreement, I will not marry you”.
I said: ‘What do I do?”
He said: “My lawyer has prepared the agreement, and you need to sign”.
I said: ‘Where is the document?”
(Court’s italics)
The Court infers that the above conversation between the husband and wife probably occurred in about 2013, having regard to wife’s affidavit filed 27 June 2019 (paragraph 72) referring to 2013, and the husband’s own evidence that in about 2013 he contacted Mr R, solicitor, to find out if he did family law and could prepare a prenuptial document.
The Court observes that the above conversation between the husband and wife was consistent with Mr Q’s evidence relating to statements that the wife had made to him in 2013 (e.g. the wife had told Mr Q, “If I do not sign the Agreement he will not marry me”).
At paragraph 102 of her affidavit filed 18 August 2022, the wife stated, which the Court accepts:
102.On or [late] 2013, the [husband] said: “The agreement is ready, you will have to sign it”.
I said: ‘What is really in the agreement.”
He said: ‘Whatever property I have is now mine, and whatever you have now is yours, and whatever we have during the relationship is ours”.
I said: ‘Well, I do not understand the law here, but why [do] I have to go see a lawyer?”
He said: “He will have to explain the document that I have signed and then you sign”.”
(Court’s italics)
The Court accepts the wife’s evidence that after the agreement was signed before Mr Q in 2013 the husband said to her, “now I can get married to you.”
The Court accepts the wife’s evidence that she did not see or read the agreement before her meeting with Mr Q and that she had not previously met or communicated with Mr Q prior to 2013. The Court accepts her evidence that the first time she received a copy of the agreement was on 20 February 2019 from the husband via email.
Mr Q had stated in his affidavit that in 2013 after he initially met with both the wife and the husband in his office he told the husband that he would need to give the wife independent legal advice which meant that the husband would need to leave his office. Mr Q had stated that the husband then left his office and Mr Q had a conference alone with the wife. Again the Court does not accept the husband’s evidence that the husband was present whilst Mr Q and the wife had discussions in relation to the agreement, and the Court does not accept that the husband overheard such discussions.
Mr Q then began his conference alone with the wife. He sought to explain the agreement to the wife who asked some questions during his explanation. The wife asked Mr Q what were the consequences if she signed the agreement with Mr Q giving the wife certain advice. Mr Q then refers to this conversation with the wife:
Wife: “I have no option but to sign the Agreement.”
[Mr Q]: “Why?”
Wife: “If I do not sign the Agreement he will not marry me and I may have to go back to India because he may not sponsor me any more with the partner visa.”
[Mr Q]: “My job here is to give you independent legal advice so that you know what you are signing. If you sign this you will not be able to bring a claim for property settlement for a share of your husband’s assets in the event you separate. Depending on the length of time of your marriage this could be quite serious for you. I also need to explain the advantages and disadvantages. An advantage may be that you will avoid litigation and both parties are very clear about your contributions during the marriage which may promote harmony. The disadvantage is that you are only entitled to your own assets as set out in the Financial Agreement and your husband has many more assets. What would you like to do?”
Wife: “I have no choice I have to sign this Agreement otherwise I won’t be married.”
[Mr Q]: “You don’t have to sign the Agreement.”
Wife: “I want to.”
Mr Q then states that the wife then proceeded to sign the agreement in his presence and he signed the statement of independent legal advice.
Mr Q’s oral evidence was consistent with his affidavit evidence relating to his discussions with the wife relating to the agreement.
Having regard to the above accepted evidence of the wife and Mr Q, the Court finds that the agreement is voidable for undue influence. The Court finds that when the wife signed the agreement her capacity to make an independent judgment was so impaired that she was not acting in the free exercise of her independent and voluntary will. In this context, the Court refers to the following factors arising from this evidence:
(a)Effectively, prior to late 2013, the husband had told the wife that the proposed agreement was not subject to negotiation. In particular, in about late 2013, the husband had told the wife that if she did not sign the agreement he would not marry her;
(b)The above statement by the husband to the wife (that is, if she did not sign the agreement he would not marry her) had a significant impact upon her and likely operated upon her mind up to and including late 2013. Namely, by late 2013 when the wife signed the agreement before Mr Q, this statement by the husband to the wife had led her to believe that if she did not sign the agreement the husband would not marry her and she may have to return to India because the husband might not sponsor her anymore in relation to her partner visa. (The Court observes that the wife did not obtain Australian permanent residency status until 2016). Indeed, in late 2013 she had told Mr Q that if she did not sign the agreement the husband would not marry her and she “may have to go back to India because (the husband) may not sponsor me any more with the partner Visa”. Moreover, the wife had told Mr Q in late 2013 that she had no option but to sign the agreement and had told him that she had “no choice” and that she had to sign the agreement, “otherwise I won’t be married.” And this belief of the wife persisted in the face of Mr Q’s advices to the wife that there were distinct disadvantages to the wife in entering into the agreement and that she did not have to sign the agreement. The Court observes that after the agreement was signed the husband told the wife that now he could get married to her;
(c)The wife had had no time for careful reflection in relation to the contents of the agreement prior to late 2013; the wife had not seen the agreement prior to late 2013;
(d)The wife had met Mr Q for the first time in late 2013, she had received his advices for the first time on that date, and had signed the agreement before Mr Q immediately following his advices to her in relation to the agreement. Effectively, she had had no sufficient time to reflect upon Mr Q’s advices in relation to the agreement.
In this context, prior to late 2013 the husband had told the wife that his lawyer had prepared the agreement and she needed to sign it. On or about late 2013 he had told her that the agreement was ready and she would have to sign it. When the wife asked the husband why she had to go see a lawyer in relation to the agreement, the husband told her that the lawyer would have to explain the document that he had signed and “then you sign”;
(e)In 2013 (but prior to late 2013) the husband had told the wife that he wanted to marry her subject to her signing the agreement. The husband asserts that the parties were engaged in India in 2012. The agreement, in recital D, refers to the parties intending to marry in 2013;
(f)The husband, at the time of the parties entering into the agreement, had net assets of about $470,000 whereas the wife had net assets of $5,000. At this time the husband was employed as a professional and the wife was unemployed. Again, the wife believed that if she did not sign the agreement, the husband would not marry her and she might have to return to India because of her Australian immigration status. If the wife had to return to India, there was a real prospect that she would live with her elderly parents there and support and assist them as she did prior to the relationship;
(g)The independent legal advice that Mr Q gave to the wife effectively included advice that in the event of the parties’ separation, the wife would not be able to claim on the husband’s “separate property” referred to in the agreement notwithstanding what happened during the marriage, and the wife would not be able to bring a claim for property settlement “for a share of your husband’s assets” in the event of separation. Despite this advice, and her apparent understanding of it, the wife signed the agreement;
(h)The Court would assess that the agreement was not fair or reasonable to the wife.
The Court observes that under the proposed agreement not only would the wife not be able to claim on the husband’s “separate property” referred to in the agreement (see Annexure A to the agreement) in the event of separation, but should the husband acquire property in his own name during the relationship (which in fact the husband did, namely he acquired the E Street, Suburb F property in 2017) such property would effectively remain the property of the husband: see clause 3(b) (“Joint property is all property which is not defined as separate property as per paragraph 2 herein”), clause 4(b) (“Any property acquired…by the parties shall be recorded in writing or by title documentation to be the asset…of one or other or both of them”), and clause 6(b) (“Joint property will be divided between them in accordance with their entitlements as evidenced in writing or title documentation...”);
Accordingly, by entering into the agreement, not only would the wife be unable to bring to account a contribution to the husband’s “separate property” as set out in the agreement, but she would be unable to bring to account a contribution to the husband’s property acquired in his name during their relationship, and she would be unable to bring to account a contribution as homemaker made during their relationship.
The husband had submitted, inter alia, that the Court should reject that part of Mr Q’s evidence in which he stated that the wife had told him that she had no option or choice but to sign the agreement, and that if she didn’t sign the agreement the husband would not marry her and she may have to return to India because he may not sponsor her anymore with the partner visa. In this context, the husband submitted that it was crucial that the wife had not herself given evidence that she had uttered these statements to Mr Q. The Court rejects these submissions. It was open to the Court to accept the evidence of Mr Q as to conversations that he had with the wife despite the wife herself not giving evidence in this regard, and despite the wife’s allegations that Mr Q did not give her any legal advice and was only with her for about five minutes together with the husband and Mr R (which allegations of the wife the Court does not accept). The Court at the outset of these Reasons had referred to the parties’ incorrect recollections. It was open to the Court to have regard to the above evidence of Mr Q in relation to relevant issues to be determined in relation to the wife (and husband) in respect to undue influence and unconscionable conduct.
Further, and again, the Court refers to the wife’s evidence relating to the husband’s statements to her as set out in paragraphs 101 and 102 of her affidavit filed 18 August 2022 (eg the husband told the wife that if she did not sign the agreement he would not marry her, and the husband telling the wife that she will have to sign the agreement) and which statements were made to her prior to meeting with Mr Q.
Further, Mr Q, in his oral evidence, had stated that the wife’s statements to him that she had no option but to sign the agreement and that if she did not sign the agreement the husband would not marry her had caused him concern that the wife may be forced to enter into the agreement. Again, when asked what he did about that concern he gave this oral evidence:
I asked her, “Do you understand the consequence if you sign this agreement?”…And she said she understood, but she has to sign, because if she refused (to) sign he will not marry her. She will lose her permanent resident entitlement.”
Mr Q was asked whether he did anything about his above concern and he stated:
“I told her that my job is to provide independent legal advice. I need to ensure she is willing to enter into this agreement, not by force, not by coerce.”
Mr Q was then asked whether he did anything in that regard, to which he stated that he asked the wife, “Are you sure you want to sign this agreement?” and she said, “Yes, I must sign”.
This evidence of Mr Q was cogent and persuasive of the state of mind of the wife leading up to her signing the agreement.
The husband submitted that the Court could infer and conclude from the contents of Mr Q’s Statement under s 90G of the Family Law Act 1975 (set out at page 68 of the wife’s affidavit filed 18 August 2022), inter alia, that the wife signed the agreement freely and voluntarily without any illegitimate pressure or undue influence from the husband; in this context the husband submitted that the wife had failed to discharge her forensic obligation to cast doubt on this issue. The Court rejects these submissions.
The above oral evidence of Mr Q, again, indicated that having spoken to the wife he was concerned that the wife may be forced to enter into the agreement. To address this concern, he stated that he told the wife that his job was to provide independent legal advice to her and that he needed to ensure that she was willing to enter into the agreement, “not by force, not by coerce.” He was then asked whether he did anything in that regard, to which he stated that he asked the wife, “Are you sure you want to sign this agreement?” and she said, “Yes, I must sign”. Mr Q was asked whether it was correct that the wife had signed the agreement against his advice. Mr Q in response stated: “I did not give her advice that she should not sign…As long as she was willing to sign…She can sign as long as she was aware of the consequence of signing the agreement.” In view of the Court, Mr Q, in light of all his discussions with the wife leading up to her signing the agreement, probably should have advised the wife to the effect that he was not satisfied that the wife had the capacity to freely exercise an independent and voluntary will in relation to making a decision as to whether she would sign the agreement. Again, Mr Q himself had stated in his oral evidence that his job was not only to provide independent legal advice to the wife but he needed to ensure that she was willing to enter into the agreement, “not by force, not by coerce”. He sought to discharge this latter obligation by asking the wife whether she was sure she wanted to sign the agreement to which the wife responded, “Yes, I must sign”. This response by the wife, in the view of the Court, should have reasonably led Mr Q to maintain his concern that the wife might sign the agreement under force from the husband and advised the wife not to sign the agreement.
Even if the Court be incorrect in these conclusions, the Court would be of the view that a solicitor’s statement under s 90G of the said Act, such as Mr Q’s s 90G statement, does not afford the inference that the recipient of the relevant independent legal advice necessarily exercised an independent and voluntary will in relation to making a decision as to whether she would sign the agreement. In any event, if such inference necessarily follows from such s 90G statement, the wife has adduced relevant and sufficient evidence displacing such inference.
Unconscionable conduct
In relation to this issue of unconscionable conduct, the Court refers to and adopts its discussions and findings above under “Undue influence”.
The Court finds that the wife, when she entered into the agreement on late 2013, was subject to a special disadvantage, namely that she believed that she had no choice but to enter the agreement. This special disadvantage seriously affected the ability of the wife to make a judgment as to her own best interests.
This special disadvantage of the wife was known to the husband because the husband had effectively created this special disadvantage of the wife. In this context, in about 2013 the husband had expressly told the wife that he would not marry her unless she signed the agreement and had, consistent with this statement, told the wife that “My lawyer has prepared the agreement, and you need to sign”, “The agreement is ready, you will have to sign it”, “[the wife’s lawyer] will have to explain the document that I have signed and then you sign”, with the Court observing that after the agreement was signed by the wife, the husband told her that “now I can get married to you”. The wife’s special disadvantage was expressly communicated by the wife to Mr Q on late 2013. And despite Mr Q’s advices to the wife, she still believed she had no choice but to enter into the agreement and had stated this to Mr Q.
Accordingly, it was unconscionable for the husband to take advantage of the wife’s special disadvantage at the time she entered into the agreement. The agreement is voidable for unconscionable conduct.
Causation
In the wife’s oral evidence in chief she was asked whether at any stage she had stated to Mr Q (on late 2013) that the agreement was just a piece of paper and that it didn’t bother her, to which the wife replied “yes”. The Court does not accept this evidence.
Such evidence of the wife is inconsistent with Mr Q’s evidence relating to his verbal advices to the wife and relating to the wife’s statements to him in relation to the agreement. And the Court has preferred the evidence of Mr Q when in conflict with both the wife’s and the husband’s evidence; in this regard, the wife and husband’s evidence was in conflict with Mr Q’s evidence in significant respects (eg the wife had alleged that she had received no independent advice from Mr Q which allegation the Court rejects).
The husband had alleged in his affidavits that he heard the wife make a statement to this effect to Mr Q but the Court has rejected that the husband was present during Mr Q and the wife’s discussions in relation to the agreement. Mr Q’s oral evidence (he gave his oral evidence before the parties’ oral evidence) was not questioned by either party in relation to this evidence of the husband pertaining to the wife’s alleged statements to Mr Q.
If the Court is incorrect in its finding above (ie the Court not accepting that the wife had told Mr Q that the agreement was just a piece of paper and that it didn’t bother her), then, having regard to the evidence of Mr Q as to his discussions with the wife in relation to the agreement, including the wife’s statements to Mr Q:
(a)that she had no option but to sign the agreement,
(b)that if she did not sign the agreement the husband would not marry her and she may have to go back to India because the husband may not sponsor her anymore with the partner visa,
(c)that she had no choice and had to sign the agreement otherwise she would not be married, and,
(d)that she wanted to sign the agreement despite Mr Q telling her that she did not have to sign the agreement,
with the wife, according to Mr Q, then proceeding to sign the agreement, the Court would infer that the wife’s above statements to Mr Q (that is, that the agreement was just a piece of paper and it didn’t bother her) were likely made to Mr Q at some stage prior to the wife asking Mr Q to explain the consequences of her signing the agreement (see the opening lines of paragraph 20 of Mr Q’s affidavit) and prior to the wife’s statements to Mr Q in (a)-(d) above.
In these circumstances, causation between the previously discussed undue influence and unconscionable conduct of the husband and the wife signing the agreement was not negated.
The Court does not accept that the wife would have signed the agreement in any event. In Thorne v Kennedy at [24] the High Court of Australia had stated, in relation to causation:
24Where duress, undue influence, or unconscionable conduct is otherwise shown, an inference of the necessary causation or contribution is readily drawn if the particular transaction cannot recently be accounted for by “ordinary motives” as clearly appears from the circumstance that Ms Thorne understood the advice of her solicitor to be that the agreements were the worst that the solicitor had ever seen.
In this case, whilst the Court has previously stated that Mr Q probably should have advised the wife not to sign the agreement, nevertheless Mr Q had told the wife of cogent reasons as to why the agreement, if entered into by the wife, would operate disadvantageously against her, and had thereafter told her that she did not have to sign the agreement, yet the wife proceeded to sign the agreement.
Accordingly, and again, the agreement is voidable for both undue influence and unconscionable conduct and should be set aside.
The Court is not satisfied that the agreement should be set aside on the grounds of fraud, namely failure by the husband to disclose to the wife any underlying documentation relating to his estimated values of his assets and liabilities as set out in Annexure A of the agreement. There was probably an evidential onus cast upon the wife to adduce material suggesting that the husband’s estimated values for such assets and liabilities were significantly incorrect, and she did not do so. As to the husband’s sperm count, there was no evidence adduced by the wife that she would not have signed the agreement had the husband disclosed to her his sperm count position prior to signing the agreement.
As to the contention by the wife that Mr Q failed to give the wife adequate independent legal advice (see section 90G(1)(b) of the Act) the relevant legal authorities indicate that the relevant question is not as to the content of the advice, but as to whether the advice required by section 90G(1)(b) was actually given.[1] Legal advice was given to the wife by Mr Q in relation to the agreement on late 2013.
[1] Hoult & Hoult [2013] FamCAFC 109 at [100]-[101].
In the view of the Court, nothing turns on recital F referring incorrectly to section 90C as opposed to section 90B; the correct reference to section 90B was set out on the front page of the agreement.
PROPERTY
Evidence
Relevant evidence relating to the issues to be determined will be set out below and under the headings “Balance sheet”, “Contributions”, and “Section 75(2)”. Where there is any conflict between the evidence referred to below and in those sections of these Reasons, the evidence under the headings “Balance sheet”, “Contributions” and “Section 75(2)” shall take precedence.
The wife gave oral evidence.
The wife stated she was now unemployed. She stated that in her previous workplace she was feeling isolated, discriminated against, and was under stress. She left that last employment in early 2023.
The wife stated that he had just finished a degree in information technology. She stated that she obtained that degree from T University.
The wife stated she was physically healthy.
The wife stated she only worked in employment earning income for two to three months during the relationship. During this period the wife’s income was used to pay the parties’ rent as the husband for this short period was unemployed.
The wife stated that the husband, during the parties’ relationship, would transfer $1,000 to her bank account once each month. With these monies, the wife would pay telephone bills and grocery shopping for the parties.
The wife stated that she had signed an application for finance from Company BA in January or February 2023. She agreed that at that time she owed about $130,000 for her legal costs relating to these proceedings. She stated that the person interviewing her for the above application for finance did not ask her about any legal costs owing. The wife agreed that she had stated in the above application that her salary was $4,333 per month and being after-tax. She agreed her spousal maintenance was $400 per week. The wife confirmed that she was still living with the husband’s sister.The wife agreed that when she applied for spousal maintenance her reason was to find rental accommodation. The wife stated that she had needed to purchase a car. She had saved money to buy a car. Having purchased the car, she thought she would need to move.
The wife stated she earnt $65,000 per annum gross at her former employment being Employer BB, where her role was in customer relations. She had started working at the company in late 2022.
The wife stated that she had gone into the marriage hoping to have children.
The wife stated that the husband had told her that she needed to stay home and focus on children. The wife stated that the husband had stopped her from working. She disagreed that the husband had encouraged her to find work during the marriage as the husband had told her that he was the income earner.
The wife had travelled to India for IVF treatment in 2017. The husband had come over to India for about a week.
The wife stated the husband had wanted children as much as she did. He had told the wife that she did not need to work because he earns.
The wife stated that from 2017 until separation in February 2019 she studied for a hospitality certificate from TAFE.
The husband gave oral evidence.
The husband stated that during the relationship he was working about 12 hours per day.
The husband stated that during the parties’ relationship they tried to have children. The parties had travelled overseas and the husband had paid the wife’s airfares and accommodation. They dined regularly. The parties travelled around Australia: to City BC, City BD, City BE, beach holidays and country drives. The husband met the expenses.
The husband stated that he had decided to have children at the end of 2015.
The husband stated that there was IVF treatment in City V, City BC and India. He stated that he had paid for the IVF treatment.
The husband stated that he lived in the property at B Street, Suburb C and that the other properties were rented. In relation to the property at E Street, Suburb F the husband stated he has a $9,000 strata bill and he stated that the rental income is going to pay that bill.
Legal principles
In Lotta & Lotta [2017] FamCA 50 Foster J stated:
281 The approach to the determination of an application under s 79 of the Act is set out in Stanford v Stanford (2012) 247 CLR 108 and further considered by the Full Court in Bevan & Bevan [2014] FamCAFC 19, Chapman & Chapman (2014) FLC 93–592 and Scott & Danton [2014] FamCAFC 203.
282The Court must identify the existing legal and equitable interests of the parties in the property, the liabilities and financial resources of the parties at the time of the hearing and then whether it is just and equitable to make a property settlement order.
283Such a consideration should not be guided by an assumption that the parties’ rights to or interests in property are or should be different from those that then exist. The question is whether those rights and interests should be altered.
284There is no presumption that one or other party has the right to have the property of the parties divided between them or a right to an interest in marital property that is fixed by reference to the various matters in s 79(4). The Court needs to conclude that it would be unjust or unfair to leave property rights intact under s 79(2) of the Act.
285In many cases this requirement is readily satisfied where the parties are no longer in a marital or de facto relationship and, thus, for example, the common ownership or use of property by husband and wife will no longer be possible or the express or implicit assumptions that underpinned existing property arrangements such as the accumulation of assets or financial resources by one for the benefit of both have been brought to an end with the relationship.
286In particular, such a circumstance arises where both parties seek property adjustment orders but are unable to agree as to same. Here the wife seeks an order for adjustment of property and the husband contends that there should be no such adjustment.
287It is thus important to ascertain the present property and resources of the parties so as to facilitate a consideration of the s 79(2) question.
288In some circumstances it is not possible to determine whether it is just and equitable to make adjustment orders as to the parties’ present property rights without a consideration of s 79 (4) matters.
289Section 79(4) requires a consideration of the contributions made by the parties as defined in s 79(4)(a) to (c). The Court must then consider s 79(4)(d) to (g) in particular the subjective considerations as to the parties by having regard to the provisions of s 75(2) in so far as they are relevant (s 79(4)(e)).
290The Court can then consider the “justice and equity” of the actual orders to be made: Russell & Russell (1999) FLC 92–877; Teal & Teal [2010] FamCAFC 120, in the context of the Court’s obligation to make “appropriate orders” as provided for in s 79(1) of the Act.
Balance sheet
The balance sheet of the parties as at trial date (Exhibit E) is now set out:
BALANCE SHEET Ownership Description Applicant’s value Respondent’s value Assets 1 H G Street, Suburb H ACT Lot … DP … $710,000 $710,000 2 H B Street, Suburb C, Lot … DP … $1,195,000 $1,195,000 3 H E Street, Suburb F Lot … SP … & … $890,000 $890,000 4 H BF Pty Ltd $50 $50 5 H Westpac …76 $500 $500 6 H ANZ …54 $1,200 $100 7 H ANZ …92 $300 $0 8 H Motor Vehicle 1 $45,000 $45,000 9 W Westpac …81 $100 $100 10 W ANZ …99 $3,000 $3,000 11 W Westpac …28 $2,000 $2,000 12 W Westpac …81 $100 $100 13 W Jewellery $2,000 $2,000 14 W Motor Vehicle 2 $25,000 $35,000 Total $2,874,250 $2,882,850 Liabilities 15 H ANZ mortgage ($237+$785K+$260K+$587K) $1,868,368 $1,868,368 16 H Tax debt $27,000 $43,000 17 H Company BG $45,000 $45,000 18 W Legal fees District Court $30,000 $27,000 19 W Legal fees family law $120,000 $120,000 20 W Company BH car loan $25,000 $25,000 Net Assets $758,882 $754,482 Superannuation Member Name of Fund Type of Interest Applicant’s Value Husband’s Value 21 H Super Fund 1 Accumulation Interest $169,000 $169,000 22 H Super Fund 2 Accumulation Interest $67,000 $67,000 23 W Super Fund 3 Accumulation Interest $1,400 $1,400 Total $237,400 $237,400 Net Total Assets (including superannuation) Total $996,282 $991,882
Item 6, the husband’s ANZ account ending in #...4, should be $100 as an admission against interest noting his Financial Statement filed 6 March 2023 reveals a balance of $81.
Item 7, the husband’s ANZ account ending in #...92, should be $0 noting his Financial Statement filed 6 March 2023 reveals a balance of $0.
Item 8, the husband’s Motor Vehicle 1 should be removed from the balance sheet as it was acquired in about 2022.
Item 14, the wife’s Motor Vehicle 2 should be removed from the balance sheet as it was acquired in early 2023.
Item 15, the total ANZ mortgage debt, is not accurately stated by reference to the current mortgage debt figures in Exhibit J; the correct total indebtedness is $1,867,288 (not $1,868,368) which figure shall enter the balance sheet in item 15.
Items 16 and 17 should be removed from the balance sheet because the husband informed the Court that these debts were not in existence at separation.
Items 18, 19 and 20 should be removed from the balance sheet because the wife informed the Court that these debts were created post separation, and in any event, the Court observes that the wife’s legal fees would not normally be a matrimonial liability of the parties.
The final balance sheet accordingly will be as follows:
FINAL BALANCE SHEET Ownership Description Value Assets 1 H G Street, Suburb H ACT Lot … DP … $710,000 2 H B Street, Suburb C Lot … DP … $1,195,000 3 H E Street, Suburb F Lot … SP … & … $890,000 4 H BF Pty Ltd $50 5 H Westpac …76 $500 6 H ANZ …54 $100 7 H ANZ …92 $0 9 W Westpac …81 $100 10 W ANZ …99 $3,000 11 W Westpac …28 $2,000 12 W Westpac …81 $100 13 W Jewellery $2,000 Total $2,802,850 Liabilities 15 H ANZ mortgage $1,867,288 Net Assets $935,562 Superannuation Member Name of Fund Type of Interest Value 21 H Super Fund 1 Accumulation Interest $169,000 22 H Super Fund 2 Accumulation Interest $67,000 23 W Super Fund 3 Accumulation Interest $1,400 Total $237,400 Net Total Assets (including superannuation) Total $1,172,962
Accordingly, the Court finds that the parties’ total assets are $2,802,850, the parties’ liabilities are $1,867,288 , and the parties’ net assets are thus $935,562. The parties’ total superannuation entitlements are $237,400. Accordingly, the parties’ net assets including superannuation entitlements are $1,172,962.
Section 79(2) of the Act
The husband contended that it would not be just and equitable to make any property order in favour of the wife.
The Court is satisfied that it is just and equitable in this case to alter the property interests of the parties in light of the breakdown of their relationship, the fact that they will no longer have the joint use and enjoyment of their property, and the fact that the continuance of the current legal ownership of their property would not afford them justice and equity.
Contributions
The parties’ relationship spanned the period from about 2013 until about February 2019; a period of almost six years. There were no children of the relationship.
At the commencement of cohabitation, in about 2013, the husband’s initial contributions, by reference to two properties that he brought into the relationship, and superannuation, was about net $449,000: see Annexure A to the financial agreement. This was a significant contribution by the husband.
The wife’s assets as at commencement of cohabitation were minimal.
In about 2017 the husband purchased the property at E Street, Suburb F with a mortgage advance from ANZ. The wife asserts that this property was purchased for about $910,000.
During the parties’ relationship, the husband worked full-time in employment as a professional. The husband contributed his earnings from his employment towards the mortgage loan liabilities and/or the parties’ living expenses.
During the parties’ relationship, for a total of about 5 to 7 months, the wife worked in part time employment and contributed her income towards the parties’ living expenses.
During the parties’ relationship the wife was primarily responsible for and carried out the homemaking duties.
During the parties’ relationship, the wife underwent a series of IVF procedures. The Court accepts the wife’s evidence in relation to the issue of the parties wanting to have children in their relationship, and accepts her evidence in relation to this IVF issue and related treatment; in this regard where the wife’s evidence is in conflict with the husband’s evidence the Court prefers the wife’s evidence. The Court finds, consistent with the wife’s evidence, that from early in the parties’ relationship both parties wanted to have children, investigations were undertaken in relation to the husband’s sperm count, and that they ultimately agreed that the IVF treatment should be undertaken. The Court observes that in 2014 it is apparent that the wife was aware of the husband’s low sperm count and had sought specialist treatment by that time. The wife produced semen analysis reports in relation to the husband from 2015, and the Court observes there was a semen specimen from the husband in 2013. The Court observes that the parties attended upon a fertility specialist in 2015.
In relation to this IVF treatment, over a significant period of time, the wife underwent, inter alia, numerous medical procedures, special diet, medications, on occasion experienced significant pain and discomfort, and experienced stress and anxiety.
The Court would assess that the wife’s homemaker contributions including her contribution to the parties’ infertility issues through IVF treatment, as discussed above, were contributions of substance.
The Court takes into account that the husband paid the cost of the above IVF treatment, and that he experienced some stress and anxiety throughout the course of the IVF treatment.
After separation, the husband gave the wife a total of $10,000.
Since separation to date, a period in excess of four years, the husband alone has met the mortgage loan payments and maintained the properties which the Court takes into account. He has resided in the B Street, Suburb C property.
The Court takes into account that the total net value of the three properties in the husband’s name have increased since separation in February 2019 to trial date.
The Court takes into account certain changes to the husband and wife’s respective bank balances (see the two balance sheets in evidence) from separation to trial date.
As to the superannuation entitlements of the husband, the Court takes into account that the wife probably indirectly contributed to the husband’s accumulation of his superannuation entitlements during the relationship through her homemaker contributions.
The Court takes into account that the husband’s superannuation assets have increased since separation in February 2019 to trial date.
The wife contended that a contributions finding of 45 per cent should be made in her favour.
The husband contended that a contributions finding of not greater than 15 to 20 per cent should be made in favour of the wife (with the Court noting that the husband had initially submitted that it would not be just and equitable for the Court to make a property order in favour of the wife pursuant to section 79(2) of the Act, which submission the Court rejects.)
Taking into account the above matters, and viewing the parties’ overall contributions holistically, the Court assesses the parties’ contributions to the net assets including superannuation arising out of their relationship of $1,172,962 to be 82.5 per cent in favour of the husband and 17.5 per cent to the wife. This results in a disparity of $762,425 in favour of the husband.
Section 75(2) of the Act
The parties’ relationship was for almost 6 years.
The husband is aged 42 years. The wife is aged 38 years.
Both parties are in reasonable health.
The husband is a professional with two tertiary qualifications. He is self-employed. His average gross weekly income from his employment is about $5,787. His rental income is about $970 gross per week.
The wife has become recently unemployed. She was employed full-time as an administration officer with a company for about four months from about late 2022 until about early 2023. The wife had earnt about $65,000 per annum gross.
She has an arts degree from an Indian university obtained in 2005. She obtained a TAFE certificate in beauty therapy in 2019. The wife did a hospitality certificate from TAFE prior to separation. The wife has just finished a degree in information technology (IT). She obtained that degree from T University. She probably has a reasonable earning capacity, however the Court would assess that the husband’s earning capacity is significantly greater.
Since 2022, the husband paid the wife spousal maintenance of $400 per week, however he was sometimes inconsistent in his payments and as a result the wife reported this issue to Centrelink. The wife agreed that when she applied for spousal maintenance she was seeking to find rental accommodation.
Again, the husband resides at his property at B Street, Suburb C.
The wife resides with the husband’s sister at her residence at Suburb BJ. The wife has been residing there since separation. The wife occupies a bedroom with the husband’s sister’s youngest child. The wife proposes to rent a one-bedroom unit closer to a train station once she has financial stability.
The Court takes into account, and regards as particularly important under s75(2), that the wife’s homemaker commitments during the parties’ relationship, including the prolonged course of her IVF treatment during the relationship, probably delayed the wife’s completion of her tertiary IT qualification and entry into the workforce.
The Court takes into account the extent of net assets presently held by the husband, by reference to the above finalised balance sheet, in contrast to the modest extent of assets presently held by the wife by reference to that same balance sheet.
The wife contended that an adjustment under section 75(2) of not less than 10 per cent should be made in her favour.
The husband contended that no adjustment under section 75(2) should be made in her favour.
Taking into account the above matters, there should be an adjustment in the wife’s favour of 2.5 per cent. Thus the adjusted contributions finding of the Court is 80 per cent to the husband and 20 per cent to the wife; the resulting disparity in favour of the husband is thus $703,777.
JUSTICE AND EQUITY
At the outset the Court should state, in relation to this justice and equity issue, that it does not take into account the contents of the agreement to be set aside, and in particular does not take into account the operative part of that agreement, clause 6, setting out how the property and financial resources of the parties would be divided in the event the breakdown of the parties marriage evidenced by separation. This is by reason of undue influence and unconscionable conduct of the husband previously discussed.
Pursuant to the Court’s adjusted contribution assessment, the husband should be left with assets representing, in value, 80 per cent of the net assets including superannuation, being $938,369 (80 per cent of $1,172,962).
The wife will be entitled to 20 per cent of the net assets including superannuation, being $234,592 (20 per cent of $1,172,962).
Separate to the above entitlements of the parties, the wife will retain her motor vehicle and the husband will retain his motor vehicle. Each party has certain debts which, as discussed previously in these Reasons, did not enter the final balance sheet.
Should the husband retain:
(a)The 3 properties: $2,795,000
(b)Bank accounts: $600
(c)BF Pty Ltd: $50
(d)His superannuation entitlements: $236,000
totalling $3,031,650,
less mortgage loan liabilities, $1,867,288;
leaving net $1,164,362,
and the wife retain:
(a)Bank accounts: $5,200
(b)Jewellery: $2,000
(c)Her superannuation: $1,400,
totalling $8,600,
then the husband will need to pay the wife the sum of $225,992 ($234,592 less $8,600). The husband should be given 10 weeks to pay this sum to the wife, failing which the property at B Street, Suburb C should be sold (the Court observes that this property is probably the only property with sufficient equity to enable $225,992 to be paid to the wife: Exhibit J. The Court also observes that the wife had sought Orders that all 3 properties be sold).
The Court now turns to what should occur if the B Street, Suburb C property is sold (the Court notes on sale of this property the ANZ mortgage loan debts of $590,386 and $234,851 will likely be discharged; Exhibit J refers to the B Street, Suburb C property having 2 mortgage loan debts secured on it.)
Should the wife retain:
(a)Her above assets and superannuation totalling $8,600,
then she will need to receive cash of $225,992 (being $234,592 less $8,600). Such cash can be paid to the wife from the net sale proceeds of the B Street, Suburb C property.
Should the husband retain:
(a)The properties at G Street, Suburb H, ACT, and E Street, Suburb F: $1,600,000
(b)Bank accounts: $600
(c)BF Pty Ltd: $50
(d)His superannuation entitlements: $236,000
totalling $1,836,650,
less mortgage loan debt attaching to G Street, Suburb H and E Street, Suburb F of $1,042,051,
leaving $794,599,
then the husband will need to receive cash of $143,770 (being $938,369 less $794,599). Such cash can be paid from the net sale proceeds of the B Street, Suburb C property.
The parties both have debt which did not enter the final balance sheet.
The Court is of the view that its proposed property adjustment orders will represent a just and equitable property settlement between the parties.
The husband sought an order that the interim order for spousal maintenance in favour of the wife should now be discharged, in particular taking into account that the wife has recently been in remunerative employment. The wife will receive a monetary sum from these property proceedings. It is in the interests of justice that the spousal maintenance order be discharged.
The Court makes Orders accordingly.
I certify that the preceding two hundred and thirty-one (231) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Newbrun. Associate:
Dated: 1 June 2023
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