Wao and Chou (No. 2)
[2018] FamCA 542
•24 July 2018
FAMILY COURT OF AUSTRALIA
| WAO & CHOU (NO. 2) | [2018] FamCA 542 |
| FAMILY LAW – PROPERTY SETTLEMENT – Binding Financial Agreement – Where the husband seeks declaration that a financial agreement executed by the parties under s 90C of the Family Law Act 197 is not binding within the meaning of s 90G of the Act – Where the husband seeks that if the agreement is found to be binding, it be set aside under s 90K of the Act for reason of uncertainty – Where the husband seeks property orders in accordance with Part VIII of the Act – Where the wife asserts that the financial agreement is binding – Where the Court finds that the financial agreement is binding so as to oust its jurisdiction – Application dismissed. |
| Family Law Act 1975 (Cth) ss. 79, 90C, 90G, 90K |
| Abrum & Abrum [2013] FamCA 897 N. C. Seddon and R. A. Bigwood, Cheshire & Fifoot Law of Contract (Butterworths, 5th ed, 1988) |
| APPLICANT: | Mr Wao |
| RESPONDENT: | Ms Chou |
| FILE NUMBER: | PAC 1883 of 2016 |
| DATE DELIVERED: | 24 July 2018 |
| PLACE DELIVERED: | Sydney |
| PLACE HEARD: | Parramatta |
| JUDGMENT OF: | McClelland J |
| HEARING DATE: | 27 – 29 June 2018 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr Adams |
| SOLICITOR FOR THE APPLICANT: | Just in Case Legal |
| COUNSEL FOR THE RESPONDENT: | Mr Richardson SC |
| SOLICITOR FOR THE RESPONDENT: | Atunes Lawyers |
Orders
The financial agreement signed by the parties and dated 16 March 2012 is declared to be a binding financial agreement pursuant to section 90C of the Family Law Act 1975 (Cth) (“the Act”).
The husband’s application filed on 3 October 2017 is dismissed.
By consent, within 14 days, the Applicant husband shall sign all documents and do all acts and things necessary to deliver up to the solicitor for the Respondent wife a Withdrawal of Caveat for the caveat (registered number …) registered over the property at E Street, Suburb F NSW …, being the whole of the land comprised in Certificate of Title Folio Identifier ….
By consent, in the event that the husband fails, neglects or refuses to comply with order 3 above within the time stated, then a Registrar of the Family Court of Australia is hereby appointed, pursuant to s 106A of the Act to execute the Withdrawal of Caveat in the name of the husband, so as to give force and effect to the order.
The parties be granted liberty to apply in respect to costs.
Note: The form of the order is subject to the entry of the order in the Court’s records.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Wao & Chou (No. 2) has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).
| FAMILY COURT OF AUSTRALIA AT PARRAMATTA |
FILE NUMBER: PAC 1883 of 2016
| Mr Wao |
Applicant
And
| Ms Chou |
Respondent
REASONS FOR JUDGMENT
Introduction
This matter concerns an application to set aside an agreement in respect to the parties’ matrimonial property made on 16 March 2012 ("the agreement"). The husband contends that the agreement is not a binding financial agreement, and in the alternative, if the agreement is found to be a financial agreement, it should be set aside. In that event, the husband could prosecute an application for a declaration under s 78 of the Family Law Act 1975 ("the Act") and seek an order pursuant to s 79 of the Act for the adjustment of the parties’ matrimonial property.
The wife contends that the agreement is a binding financial agreement under s 90C of the Act and she opposes the husband’s application.
Background
In October 1954, the wife, whose parents were Chinese and originally from City G, was born in Country H. The wife and her family returned to City G in 1977.
In November 1955, the husband was born in Country H. In 1973, the husband arrived in City G as a refugee from Country H.
In 1975, the husband started a business with his partner Mr J.
In 1976, according to the husband, the parties met and commenced dating. The wife contends that the parties did not meet until 1978, after her family moved to City G. The difference between the parties’ positions, in that respect, is not material to this decision.
In 1983, the parties were married. The parties have three adult children, Mr X, Mr Y and Ms Z.
In 1985, the husband and Mr J incorporated K Ltd.
In 1986, the parties purchased a unit in Suburb L, City G (“the first City G unit”).
In August 1990, the parties and Mr X migrated to Australia (the parties’ other children were not yet born). Shortly thereafter, the parties and Mr X returned to City G, the wife says, to operate K Ltd.
In July 1991, the wife and Mr X returned to live in Australia.
In October 1991, the parties purchased a property at E Street, Suburb F ("the Suburb F property").
In 1996, the parties sold the first City G unit.
In 1997, the parties incorporated the company M Ltd and through M Ltd, purchased a unit in City G (“the M Ltd unit”).
In 1997 the parties incorporated the company N Ltd and, through N Ltd, purchased a further unit in City G (“the N Ltd unit”).
In 2005, the husband purchased Mr J’s 30 per cent share in K Ltd and the wife purchased the remaining 20 per cent. The wife remitted the sum of approximately $626,650 to the husband to facilitate the purchase of her share of Mr J’s interest in the business.
In 2005, the parties refinanced the M Ltd unit. The wife contends that the funds were transferred to K Ltd. The husband contends that the funds were used in order to purchase Mr J’s interest in the business. The difference between the parties’ positions, in that respect, is not material to this decision.
In about 2005, the wife and Ms Z moved to City G, while Mr X and Mr Y remained in Australia.
In 2007, the husband transferred his 50 per cent shareholding in M Ltd to the wife. The wife further contends that, in 2007, the husband transferred his 50 per cent interest in N Ltd to her. The wife says that, in return, she transferred her 20 per cent shareholding in K Ltd to the husband. The husband says the wife made this transfer in June 2009.
The parties separated on 28 January 2008.
In 2009, the N Ltd unit was sold.
In 2010, the wife and Mr X purchased a unit in City G known as "Unit O" (“the Unit O unit”). That unit was purchased with a 70 per cent interest to the wife and a 30 per cent interest to Mr X.
In 2011, K Ltd sold plant and equipment.
On 25 December 2011, a private function was held at the Suburb F property. There is a dispute between the parties as to the conversations that occurred during that evening. The different versions of those conversations are not material to my decision.
On 15 March 2012, the wife contends that the parties both attended an appointment with Mr P (“Mr P”), Solicitor, who subsequently provided the wife with a draft financial agreement. The husband denies attending that appointment. It did not appear to be disputed, however, that Mr P did provide the draft agreement to the wife on 15 March 2012.
On 16 March 2012, the parties attended the offices of Mr C, Solicitor. The husband conferred with Mr C in respect of the financial agreement. The wife remained outside the office of Mr C while that discussion occurred. In the course of conferring with Mr C, the husband signed the agreement and, while it was initially contested by the husband, he subsequently agreed that he and Mr C signed two copies of the document. Mr C also signed the Certificate of Independent Advice, which was attached to the agreement. The husband also signed a Transfer of Title in respect to the Suburb F property.
The wife contends that, immediately following the husband signing two copies of the agreement in the presence of Mr C, the parties travelled to the office of Mr P, where the wife executed the document in the presence of Mr P, who signed the Certificate of Independent Advice, which was attached to the agreement. The wife contends that the two original documents provided by Mr C to the husband were both executed by her in the presence of Mr P and, after being signed by herself and Mr P, one of those documents was handed to the husband. The husband, on the other hand, disputes that this occurred. The husband contends that, immediately following his appointment with Mr C, the parties went grocery shopping and subsequently, returned to the Suburb F property at approximately 5.00 pm.
On 20 May 2012, the transfer of the Suburb F property into the wife’s name was registered.
On 31 March 2018, the wife contends that the parties’ children, while cleaning out the study in the Suburb F property, found a plastic box under a bed that had been used by the husband when he had stayed in Australia. The wife contends that the children found, within that box, a photocopy of a financial agreement signed by the husband and Mr C, together with one original copy of the agreement signed by the husband, Mr C, the wife and Mr P. The wife further contends that the children found an original receipt of payment of fees provided by Mr C to the husband.
Application
At the hearing, the husband amended his application to seek the following orders:
1. Pursuant s 90G(1B) and/or the Court's implied jurisdiction, a Declaration that the agreement dated 16 March 2012 ("the Agreement") was not a "financial agreement" within the meaning of s90C of the Family Law Act 1975, as there was no communication of the acceptance and; consequently the jurisdiction of the Court under Part VIII of the Act is not ousted.
2. Declaration that the agreement was not binding under s 90G as there was no substance to the supposed advice required by s 90G(l)(b).
3. Alternatively, if the Agreement was a financial agreement, an Order that it be set aside pursuant to s 90K(l)(b) of the Family Law Act 1975 by reason of the Agreement was otherwise void, voidable or unenforceable by reason of uncertainty.
The acceptance of the agreement by the wife and its provision to the husband
In the husband's Outline of Submissions, he contends that there was no agreement between the parties for the following reasons:
a)On 16 March 2012, he signed a copy of the agreement in front of his solicitor, Mr C, and later handed those documents to the wife.
b)The husband did not receive any written correspondence indicating acceptance of the agreement, nor any financial agreement signed by the wife, from either the wife, the wife's solicitor, Mr P, or Mr C.
c)There was no valid agreement between the parties pursuant to contractual principles, as there was no offer or acceptance. More particularly, the wife never accepted the husband's offer.
d)The husband made an offer by executing the agreement on 16 March 2012. Prior to signing, the terms of the agreement constituted a mere invitation to treat, open to potential modification.
e)It was further contended that, under the Act, a financial agreement must be a written agreement, pursuant to s 90C(1)(a), and signed by all parties, pursuant to s 90G(1)(a). This means that acceptance must be in writing to comply with the statute and signed by all parties. If acceptance is oral or implied by conduct, then the agreement will be partly oral and partly written. While it may constitute an agreement at common law, the agreement is unenforceable under the Act: Sullivan and Sullivan [2011] FamCA 752, per Young J, at [80] to [81].
The evidence relied upon by the husband in respect to his contention that that there was no communication of the acceptance of the offer is set out in paragraphs 153 to 161 of his Affidavit filed on 14 November 2017, as follows:
153. [The wife] and I came out of [Mr. C's] office at approximately 3.30pm.
154. We went to a restaurant and we had some late lunch together.
155. [The wife] was happy. She spoke more freely and pleasantly. We talked and I enjoyed her company very much.
156. After the meal, [the wife] suggested that she would make me a nice dinner at home.
157. We went shopping for grocery afterwards.
158. We finished shopping at around 5pm and we went home.
159. I handed the documents to [the wife] when we got to the car as I was driving.
160. I have never received any written correspondence regarding acceptance of the financial agreement from [the wife], her former solicitor [Mr. P] and/or my former solicitor [Mr. C].
161. I have never received Financial Agreement signed by [the wife] from [the wife], her former solicitor [Mr. P] and/or my former solicitor [Mr. C].
The wife contends, however, that immediately following the husband executing the agreement in the legal office of Mr C, the parties then travelled by their own motor vehicle to the legal office of Mr P in Suburb Q, where the wife executed two copies of the original documents that had been provided to the husband by Mr C. The wife's evidence in that respect is set out in paragraphs 109 and 110 of her Affidavit filed on 12 February 2018, as follows:
109. When we got to the car to drive to [Mr P's] office in [Suburb Q] [the husband] put the envelope with the documents next to me. We drove me to [Mr P's] office straight away as we were late. We drove to [Mr P's] office and did not have lunch or shopped. I called [Mr P] to tell him I would be late to his office. I also called [Ms Z] to tell her to stay the school library in [Suburb R] as I would be picking her up late. During the drive, [the husband] said words to the effect "[Mr P] kept telling me that once I signed this Financial Agreement, I would have no further claim on the [Suburb F] property". [The husband] told me that [Mr C] said it over and over and [the husband] also told me that he replied to [Mr C] "Yes I know and that is why I came to your office to sign these document ".
110. At [Mr P's] office, [the husband] was sitting next to me and opposite [Mr P]. [Mr P] explained the effect of the Agreement to me mainly in Cantonese, watched me sign it and then witnessed my signature. [The husband] watched [Mr P] and I sign the 2 sets of financial agreement. [The husband] also watched as [Mr P] signed the certificate of independent legal advice and the transfer as my solicitor. I signed 2 copies of the "Separation Declaration" in front of [Mr P]. [Mr P] took the Agreement, property transfer, and Certificate of Independent Advice and asked [the husband] for the 'Certificate of Independent Advice' signed by [Mr C] to photocopy it. [Mr P] also made a photocopy of his Certificate of Independent Advice for [the husband]. I received a set of the financial agreement and "Separation Declaration" from [Mr P]. I recall that [Mr P] handed a set of the financial agreement and "Separation Declaration" to [the husband]. When [Mr P] spoke to [the husband] he spoke mainly in Cantonese but some words were in English. [Mr P] kept the Transfer. I understood that the signed financial agreement had to be sent in with the Transfer. A copy of the signed Financial Agreement is at Tab 35.
Provision of Certificates of Independent Advice
As a related matter, the husband contends that he did not receive a copy of the Certificate of Independent Advice, in terms of that provided to the wife by Mr P, and, as a result, contends that even if the agreement is found to be a financial agreement within the meaning of s 90C of the Act, it cannot be said to be binding under s 90G(c) of the Act. The husband further contends that, belatedly, the wife has served Affidavits of the children deposing to the alleged discovery of copies of Certificates of Independent Advice for both the wife and the husband.
The husband relies upon the decision of Aldridge J in Abrum & Abrum [2013] FamCA 897, wherein his Honour found that the provision of such certificates some five years after they were signed and some five months after separation did not comply with the requirements of the Act because a requirement for prompt exchange of such documents necessarily arises from the proper construction of the provisions of the Act. Relying upon that decision, the husband contends that the provision of the solicitors’ certificates some six years after they were signed does not comply with the requirements of s 90G(1)(ca) of the Act.
Accordingly, an issue for determination becomes the point in time when the agreement, as executed by the wife and to which the Certificates of Advice were attached, was provided to the husband.
Witness credibility
The parties’ evidence, with regard to the execution of the agreement and the provision of Certificates of Independent Advice, is directly contradictory. On the husband's version of events, it was not possible for the parties to have attended the offices of Mr P on 16 March 2012 because, according to the husband, immediately after attending the offices of Mr C, the parties went shopping for groceries and returned home at around 5.00 pm.
In Kuhl v Zurich Financial Services Australia Ltd (2011) 243 CLR 361 (“Kuhl v Zurich Financial Services”), the plurality said at [62]:
Witnesses are supposed to answer questions put by Council responsively: they are supposed to give a full answer, but no more. It is one thing to say that a witness was not asked the right question. It is another thing to say that a witness did not answer the questions that they were asked. And it is an even more serious thing to say that a witness was "reluctant" to answer. The duty of a witness is to tell the truth, the whole truth, and nothing but the truth, so far as the questions asked seeking. The duty of a witness to answer questions responsively involves not only a negative duty (not to volunteer material for which the question does not call), but also a positive duty (to proffer all material within the witnesses knowledge for which the question does call for).
In that case, the High Court acknowledged that it was a serious matter to reach the conclusion that a party witness has failed to comply with the duty to tell the whole truth to the Court. Regrettably, as I will discuss, I arrive at that conclusion in respect to the evidence of the husband.
Glen-McLeod v Galloway [2012] NSW CA 368, Tobias AJA, with whom Allsop P and Campbell JA agreed, referred with approval to the test for assessing the truth of a witness's evidence as being stated by Gosnell J in GH v The Catholic Child Welfare Society (Diocese of Middlesbrough) [2016] EWHC 3337 (QB), where his Honour said:
In his instructive article entitled The Judge as Juror: The Judicial Determination of Factual Issues, published in Current Legal Problems 38, Mr Justice Bingham (as he then was) made this observation:
"The main tests needed to determine whether a witness is lying or not are, I think, the following, although their relative importance will vary widely from case to case:
(1) the consistency of the witness's evidence with what is agreed, or clearly shown by other evidence, to have occurred;
(2) the internal consistency of the witness's evidence;
(3) consistency with what the witness has said or deposed on other occasions;
(4) the credit of the witness in relation to matters not germane to the litigation;
(5) the demeanour of the witness."
In assessing the credibility of the husband's evidence, I propose to apply, in reverse order, the considerations set out at items 5, 3, 2 and 1 of the test adumbrated in the above case.
Firstly, in comparing the demeanour of the witnesses, I note that, despite appearing to be at some unease in the Court surrounding, the wife gave her evidence in a clear, direct and forthright manner and without embellishment. The husband, on the other hand, provided answers that were frequently non-responsive to the questions asked of him and on other occasions, volunteered material for which the question did not call (see Kuhl v Zurich Financial Services). Further, on at least two occasions, the husband became annoyed and even aggressive in response to questions that he appeared to find uncomfortable. This included, by raising his voice loudly and slapping the document that he was being questioned about down on the desk in front of him in an aggressive manner.
Secondly, in terms of addressing consistency with what the witness has said or deposed on other occasions, I note that the wife's oral evidence was entirely consistent. The husband, on the other hand, gave a number of inconsistent answers, including as to whether he had previously seen the documents that contained his signatures and whether he had been provided with a photocopy of the agreement, which is annexed to both his Affidavit filed on 14 November 2017 and that filed on 22 June 2018. The husband was far more responsive to propositions put to him in re-examination by his own Counsel. The husband’s altered demeanour and responses provided during the course of re-examination confirmed, rather than removed, the doubt I had regarding the veracity of his oral evidence.
Thirdly, in comparing the internal consistency of the parties’ evidence, once again, the wife’s evidence was internally consistent, both in terms of the relevant paragraphs of her Affidavit to which I have referred and in terms of her oral evidence. The husband, on the other hand, in providing non-responsive answers to questions asked of him, initially denied having seen a photocopy of the agreement that was shown to him in the witness box.
Fourthly, and in my view, most significantly, the husband's evidence that he did not, on 16 March 2012, attend the offices of Mr P with the wife is entirely inconsistent with the face of the agreement which was executed on 16 March 2016. In particular, the husband’s evidence that, after attending the offices Mr C, the parties went shopping until about 5.00 pm, before returning home, provided no possibility for the alternative narrative of the wife that the parties did, in fact, attended the premises of Mr P. The wife's version of events, on the other hand, is corroborated by the fact that the agreement was dated 16 March 2012 and the Certificate of Independent Advice attached to the agreement, which was signed by Mr P, was also dated 16 March 2012 (tab 35 to the annexures to the wife's Affidavit). No evidence was presented to cast doubt on the accuracy of the date recorded on the agreement or the Certificate of Independent Advice signed by Mr P on 16 March 2012.
Having regard to those matters to which I have referred, I am satisfied as to the truth of the wife's evidence, whereas I am not satisfied as to the truth of the husband's evidence.
Further, I note that the wife's account of the relevant events is corroborated by the evidence of the parties’ children who have sworn Affidavits deposing to the fact that, on or about 31 March 2018, while dismantling a bed previously used by the husband, they located a plastic box. The children each attest to finding, in that box, a copy of the agreement with the signatures of the wife, Mr P, the husband and Mr C. The children also attest to finding a photocopy of the agreement with the photocopied signatures of the husband and Mr C, together with a photocopy of the Certificate of Independent Advice signed by Mr C. The children further attest to finding, with the papers, an original copy of a receipt provided by Mr C to the husband.
The children were not cross examined by Counsel for the husband in respect to their evidence. It was asserted, correctly, in my view, that the fact that the children found the relevant documents on 31 March 2018 in the relevant box did not mean that the husband had placed them there. In other words, it was contended that the documents could have been placed in the box subsequent to the husband leaving Australia on 19 March 2012 by the wife or some other person. However, it is significant that during the course of cross examination, the husband acknowledged receiving, from Mr C, the original receipt in the sum of $330 (Exhibit “D”). As I have indicated, the children attest to finding that original receipt with the signed agreement and the photocopy of the agreement, to which I have referred. The fact that the husband acknowledges having received that original receipt from Mr C makes it probable that the receipt was placed in the plastic box by the husband. In circumstances where that receipt was also found with a photocopy of the agreement signed by the husband and Mr C, which is annexed to the husband’s Affidavits, it is, in my view, more likely that the original copy of the agreement, signed by the wife, Mr P, the husband and Mr C, was similarly placed in the plastic box by the husband and not by some other person.
The evidence of the wife is, in itself, sufficient to satisfy me, on the balance of probabilities, that the wife's version of events that occurred on 16 March 2012 is correct and truthful. While it is unnecessary to the finding I have made, I note that my acceptance of the wife’s evidence is confirmed by the relevant documents being found in a plastic box under a bed utilised by the husband. I am therefore satisfied that on 16 March 2012, Mr P provided the husband with the agreement, being a complete Deed, executed by the wife on 16 March 2012.
As a related matter, I am also satisfied that the husband was provided with the Certificate of Independent Advice signed by Mr P, the wife’s solicitor, on that day. The fact that Mr P was not called to corroborate the wife’s version of events does not detract from my finding in respect to the veracity of her evidence.
Accordingly I dismiss the father’s application for the first order he seeks.
Alleged lack of substance to the advice provided by Mr C, Solicitor, to the husband
The husband’s assertions in respect to this issue are set out at paragraphs four to nine of his Outline of Submissions, as follows:
4. The husband asserts that s 90G(1) was not complied with because:
a. He did not receive the requisite advice;
b. He did not receive the statement of independent advice given to the wife.
5. Such advice as the husband received was not real and meaningful. The requirement under s 90G(1) is that the independent advice be directed to the circumstances and present rights of the parties: see Abrum & Abrum [2013] FAMCA 897, per Aldridge J at [42].
6. The affidavits of the parties’ [sic] indicate that, during the course of their marriage, the parties acquired significant property and business interests in [City G] and the Republic of China ("the China property").
7. There could be no meaningful content to the independent legal advice received by the husband because there was no identification of the China property.
8. The wife deposes that the China property was not identified for reasons of taxation.
9. In the circumstances, the court cannot be satisfied that the husband received the advice required by s 90G(1)(b).
In considering the contentions of the husband, it is noted that both parties agree that the wife was not present in the room when Mr C provided advice to the husband. Mr C has, however, signed a Certificate of Independent Advice dated 16 March 2012, in which he certifies:
…that in relation to an Agreement in writing proposed to be entered into between [the wife] and [the husband] ("the parties") I advised [the husband] ("my client") independently of the other party and before the time at which my client signed the agreement as to the following matters:
a) the effect of the agreement on their rights under the Family Law Act; and
b) the advantages and disadvantages, at the time that the advice was provided, to them in making this agreement.
The husband’s evidence in respect to his interaction with Mr C is set out in paragraphs 137 to 139 of the husband's Affidavit, as follows:
137. [The wife] gave a bundle of documents to [Mr. C]. I now know the documents were the Financial Agreement and Transfer.
138. At one stage, [Mr. C] said, "I think perhaps [the wife] would like to leave us. What I am about to say may offend."
139. [The wife] left [Mr. C's] office room.
An Affidavit of Mr C dated 15 June 2018 has been filed in these proceedings. That Affidavit does not, however, include evidence of matters discussed between himself and the husband.
On the husband's own evidence, the parties arrived at Mr C’s Suburb S office at approximately 2:30 pm and left at approximately 3:30 pm. There is a complete absence of any evidence regarding the content of communication between Mr C solicitor and the husband during that time.
In making that finding it should be noted that on 27 June 2018, the second day of the hearing, I rejected an application by the husband to rely upon an Affidavit of his current solicitor, sworn on the 26 June 2018, attaching documents from Mr C, Solicitor’s, file. That Affidavit was served on the wife’s solicitor on the afternoon of the first day of the trial. My reasons for rejecting the husband’s application are contained in an ex tempore judgment that I delivered on 27 June 2018.
In Logan & Logan [2013] FamCAFC 151, the Full Court referred to the decision of an earlier Full Court of this Court in Hoult & Hoult (2013) FLC 93-546 and, in applying that decision, stated:
Their Honours were ad idem that the certificate given by the solicitor must be treated at least as prima facie evidence of compliance with the requirement to provide legal advice. Further, that is bolstered by the presence in a financial agreement of recitals such as appeared in the agreement in this case, namely in recitals O, P, Q and R, which in effect confirmed that the requisite legal advice was given.
Applying the principles emanating from Hoult, what the reliance by the husband on the certificate, and the recitals, does is satisfy the initial onus on the husband, and passes the evidentiary burden to the wife. The certificate gave rise to “an inference, a presumption of fact or a presumptio hominis” (paragraph 97) that the requisite advice has been. The question then becomes whether the wife has adduced sufficient evidence to displace that inference.
In addition to the prima facie evidence in the form of the Certificate of Independent Advice signed by Mr C, the following provisions of the agreement are relevant:
H. Certain issues have arisen between the parties in relation to financial matters. [The wife] and [the husband] have been independently advised prior to executing this Agreement by their legal representatives as to the following matters:-
(i)the effect of the agreement on their rights under the Family Law Act,
(ii)the advantages and disadvantages, at the time that the advice was provided, to them in making this agreement.
(iii)Whether or not, at the time, it was prudent for him/her to enter into the Agreement,
(iv)Whether or not, at the time and in light of such circumstances as were, at the time, reasonably foreseeable, the provisions of the agreement was fair and reasonable.
…
7. Both [the wife] and [the husband] acknowledge that they have received independent legal advice prior to entering into this Agreement as to the following matters:
(a) the effect of the agreement on their rights under the Family Law Act, and
(b)the advantages and disadvantages, at the time that the advice was provided, to them in making this agreement.
…
18. The parties acknowledge that:
…
(e) Each party has been advised about the meaning and effect of the terms of this Agreement and about their rights and entitlements under Parts VIII, VIIIA and VIIIB of the Family Law Act 1975.
(i) Each party has received full and competent advice from a legal practitioner.
Consistent with the decisions of the Full Court in Hoult and Logan, I find that the Certificate of Independent Advice provided by Mr C, together with the above recitals, is prima facie evidence of the husband receiving the required advice, pursuant to s 90G(1)(b) of the Act.
As was the case in Logan, the question then becomes whether the husband has adduced sufficient evidence to displace the inference that the requisite advice was provided to him by Mr C.
In circumstances where the husband has failed to provide evidence from either himself or Mr C as to the content of the advice provided to him by Mr C on 16 March 2012, the husband has failed to displace the inference to which I have referred.
Should the agreement be set aside by reason that it is void, voidable or unenforceable by reason of uncertainty?
The husband’s contentions as to why the agreement is void, voidable or unenforceable by reason of uncertainty are set out in paragraphs 20 to 26 of his Outline of Submissions, as follows:
20. Pursuant to the statutory ground at s 90K(1)(b), or the power of the Court pursuant to s 90KA to determine the validity of contracts according to the principles of law and equity, the Agreement is void, voidable or unenforceable by reason of uncertainty.
21. The terms of the Agreement are so imprecise and contradictory, that the common intention of the parties cannot be discerned.
22. Notwithstanding, expressions that the Agreement should operate as a s 90C financial agreement, paragraph 2 of the Agreement directs that there should be alteration of property interests pursuant to s 79 of the Act.
23. And despite, expressions of a desire for an immediate and comprehensive settlement and division of all financial matters between the parties, paragraph 3 of the Agreement provides for the husband’s continuing indemnification of the wife’s interest in the matrimonial property.
24. The Full Court in Kostres & Kostres [2009] FAMCAFC 222 dealt with the decision of a federal magistrate in respect of a financial agreement. The Full Court considered the following to be relevant to the interpretation of financial agreements:
[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 legislation envisaged, because of the nature of these agreements and the removal of the Court’s supervisory role, that the 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 the provisions of Part VIIIA in the overall context of the Act.
25. The terms of the Agreement are uncertain or incomplete. In concert with the approach of the Full Court in Kostres, and the intention of the legislation to remove the Court’s supervisory role in matters of financial agreements, it is not for this Court to rewrite the parties’ agreement for them.
26. Furthermore, the Agreement was prepared by the Solicitors for the wife and any ambiguity should be read contra proferentem.
Dealing with the last matter first, that is, the issue of contra proferentem, in Maye v Colonial Mutual Life Assurance Society (1924) 35 CLR 14, Isaacs ACJ said:
If by reason of its own language in relation to the matter, or by reason of the context or of conflicting or differing provisions elsewhere, a term when fairly read is doubtful or ambiguous and reasonably susceptible of two constructions, that construction should be adopted which is the more favourable to the assured, because that is of the two the more reasonable in the circumstances.
In Philips v NZI Insurance Australia Ltd [1999] NSWSC 845 at 18, Bell J said:
The starting point is a consideration of the terms of the contract. If no reasonable interpretation of it gives rise to ambiguity plainly no question of a construction contra proferentem arises; C.E Heath Underwriting & Insurance (Australia) Pty Ltd v Edwards Dunlop & Co Ltd (1993) 176 CLR 535 at 548. In this regard the Court must not set out to look for ambiguity in order to work presumptions against the insurer; Wilson v Harvey Trinder (NSW) Pty Ltd [1973] 2 NSWLR 870 at 878. In A F & G Robinson v Evans Bros Pty Ltd [1969] VR 885 at 895 Starke J observed:
"The maxim is to be applied and the words of the policy, being the words of the insurers, are to be construed, in the sense in which a prudent and reasonable assured would understand them. The principle, however, ought to be applied only for the purpose of removing a doubt, not for creating a doubt or magnifying an ambiguity where the circumstances of the case raise no difficulty".
It is to be acknowledged that the principle has been applied in respect to agreements that are other than insurance agreements. In that respect, in Carr v Blade Repairs Australia Pty Ltd (No 2) [2010] FCA 688 at 45, Tracey J said:
It is also to be borne in mind that the agreement which Mr Carr was invited to sign was given to him by Mr Van Kempen. Mr Van Kempen had based the agreement on a precedent which had been prepared by solicitors. In such cases, where ambiguity exists, an agreement will normally be interpreted contra proferentem, that is, against the party who formulated the document: see Maye v Colonial Mutual Life Assurance Society Ltd (1924) 35 CLR 14 at 26–7; Wesoky v Village Cinemas International Pty Ltd [2001] FCA 32 at [47].
It can be seen that the contra proferentem principle applies in respect to the construction of a document, in cases of ambiguity, which cannot adequately be resolved by applying the ordinary rules of construction. The application of the principle results in a construction that is favourable to the party who did not prepare the agreement. The principle has been described as a principle of last resort (see K. C. T. Sutton, Insurance Law in Australia (Law Book Co, 2nd ed, 1980) at 9.64) and one to be considered with a view to arriving at a conclusion regarding the meaning of a provision, as opposed to resulting in a situation where, as in this case, the husband contends that the agreement should be set aside because no meaning can be identified. That is, the principle would be applied to arrive at a construction of the identified ambiguous clauses in favour of the husband, rather than the document being found to be void, voidable or unenforceable for uncertainty.
In this matter, the husband contends that the following clauses of the agreement result in the agreement being void, voidable or unenforceable as result of uncertainty:
2. Pursuant to Section 79 of the Family Law Act and by way of alteration of property interests, [the husband] shall upon signing of this Agreement do all acts and things necessary and execute all documents, instruments and writings to transfer all his right, title and interest in the Property to [the wife] within 28 days of the date hereof.
3. [The husband] indemnifies [the wife] and shall keep [the wife] indemnified in relation to any liability on the Property.
Dealing with the second clause first, that is, the issue of indemnity, Senior Counsel for the wife concedes that the clause should be construed in favour of the husband, and that it is intended to apply only in relation to any liability on the Suburb F property that existed prior to it being transferred to the wife on 20 March 2012.
It was further contended by Senior Counsel for the wife, correctly in my view, that the clauses identified by the husband as giving rise to uncertainty need to be construed in the context of the totality of the agreement. In that context, Senior Counsel for the wife referred to Clause 4, which relevantly provides:
4. Each party shall retain any liabilities in their sole names and shall indemnify and keep indemnified each other in relation to those liabilities.
In that context, it was contended that Clause 3 should be construed as applying to liabilities incurred prior to the Suburb F property being transferred to the wife in March 2012, and also only in respect to liabilities incurred in the name of the husband.
In adopting a construction of the agreement that is favourable to the husband, there is no ambiguity or uncertainty that exists in Clause 3 of the agreement.
In Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd [2015] HCA 37 at 46, the plurality said:
The rights and liabilities of parties under a provision of a contract are determined objectively, by reference to its text, context (the entire text of the contract as well as any contract, document or statutory provision referred to in the text of the contract) and purpose. [Emphasis added].
In that context, it is noted that the agreement is identified, at Clause A of the recitals, as being a financial agreement under s 90C of the Act, with a view to covering “all financial matters between them, including, but not limited to a division of their property and financial resources as well as their maintenance”.
Clause G of the recitals states:
There being no prospect of a reconciliation the parties now desire to amicably settle and divide their accumulated property and to avoid any expense, delay and business arising from litigation.
Further, Clause 16 provides:
This agreement is in substitution for the rights of either party to seek Orders for the adjustment of property interests where, but for this Agreement, such rights may have existed at general law. This agreement may be pleaded by either party in bar to any application to the Court which may be made by either of them whether pursuant to Part VIIIAB of the Act or any other statute or at common law or in equity, where such application seeks the adjustment of property rights or maintenance or other like orders.
Clause 18(b) relevantly provides:
This Agreement is a Financial Agreement pursuant to Section 90C of the Family Law Act 1975 in the circumstances of the parties having separated but not yet divorced and it is intended by the parties to define all of their financial rights and financial obligations towards each other under the said Acts (including but not limited to a division of their property and their maintenance) and any light legislation which may be in force from time to time governing the financial obligations of the parties towards each other and/or at law and/or in equity and to stand in relation to its subject matter in substitution for the rights and entitlements of each party to the extent permitted by law.
In summary, by reference to the provisions of the agreement to which I have referred, including reference to the relevant statutory provisions, it is clear that the purpose of the agreement is to effect the adjustment of the parties’ interests in the matrimonial property other than by way of enforcement of potential legislative remedies, including Part VIII of the Act. In those circumstances, having regard to that context and purpose, I find that the words used in Clause 2 of the agreement "pursuant to Section 79 of the Family Law Act" are, to adopt the characterisation of Senior Counsel for the wife, at worst, “infelicitous.” Those words do not create an uncertainty and do not adversely impact upon achieving the purpose of the agreement.
Moreover, I respectfully agree with the submission of Senior Counsel for the wife that any issue of potential uncertainty arising in respect to the use of the words that I have characterised as being "infelicitous" in Clause 2 of the agreement, at best, raise a hypothetical issue. This is, because the property has, in fact, been transferred as result of the husband acting in accordance with Clause 2, by executing a Transfer to effect the transfer of the Suburb F property into the wife's name. The transfer occurred, according to the husband's evidence, on 20 March 2012. In those circumstances, even if I had found uncertainty to have been established by the husband, I would have declined to have exercised my discretion under s 90K(1) of the Act to make an order to set aside the agreement.
In Cheshire & Fifoot Law of Contract (Butterworths, 5th ed, 1988) at page 60, the learned authors state:
It has often been stated that for a contract to be binding, it must be sufficiently certain, that is, it must be both clear and complete, at least in the essentials. If a contract is not sufficiently certain, it is said to be void, unless the uncertain part can be severed, leaving the rest of the agreement intact.
It is clear from the cases that a contract is effected by uncertainty only if its essential terms are uncertain. Inessential terms which are vague or incomplete can be filled out by the Court, ignored or severed. What is essential and inessential in the contract depends upon the intention of the parties. [Emphasis added].
The "infelicitous" words used in Clause 2 of the agreement are inessential to the operation of the agreement and can readily be ignored, without impacting upon the clear intention of the parties which, as I have noted, was to achieve an adjustment of the parties’ interests in their matrimonial property, without resort to litigation, including under Part VIII of the Act.
Finally, as an additional reason why I would have exercised my discretion to refrain from making an order pursuant to s 90K of the Act, I note that the parties have, themselves, agreed to a mechanism to resolve any issue of uncertainty in inessential terms of the agreement.
In that respect, Clause 18(d) provides:
Any provision of this Agreement which is invalid or unenforceable in any jurisdiction is to be read down for the purposes of that jurisdiction, if possible, so as to be valid and enforceable, and otherwise capable of being severed [from the] remaining provisions of the Agreement or affecting the validity or enforceability of that provision in any other jurisdiction (unless deletion or severing of such provision or provisions would substantially alter the intention of the parties hereto, expressed or implied).
In my view, the words that I have identified as being "infelicitous" in Clause 2 of the agreement can readily be ignored without altering the intentions of the parties, to which I have referred.
Conclusion
For all of the above reasons, I dismiss the husband's application.
The parties were in agreement that, in the event of the husband’s application being unsuccessful, the Court should make orders in terms of those agreed by the parties for the caveat lodged against the Suburb F property to be removed (Exhibit “I”). I will make orders, by consent, to that effect.
The parties have liberty to apply in respect to costs.
I certify that the preceding eighty-six (86) paragraphs are a true copy of the reasons for judgment of the Honourable Justice McClelland delivered on 24 July 2018.
Associate:
Date: 24 July 2018
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