WOOD & GROVER
[2015] FCCA 951
•17 April 2015
FEDERAL CIRCUIT COURT OF AUSTRALIA
| WOOD & GROVER | [2015] FCCA 951 |
| Catchwords: FAMILY LAW – Application to set aside binding financial agreement – claims of duress and unconscionable conduct by Wife – Husband suffering from multiple medical conditions prior to, at time of, and after signing agreement – Wife organised agreement through an “online” service – independent legal advice provided to both parties by letter and by telephone. |
| Legislation: Family Law Act 1975, ss.90G, 90K |
| Australian Competition and Consumer Commission v C G Berbatis Holdings Pty Ltd (2003) 2214 CLR 51 Meagher, Gummow & Lehane’s Equity: Doctrines & Remedies (5th Edition) (J.D. Heydon, M. J. Leeming & P.G. Turner) (Sydney: LexisNexis Butterworths, 2015) |
| Applicant: | MR WOOD |
| Respondent: | MS GROVER |
| File Number: | CAC 1444 of 2013 |
| Judgment of: | Judge Neville |
| Hearing date: | 20 October 2014 |
| Dates of Last Submission: | 27 November 2014 & 31 March 2015 |
| Delivered at: | Canberra |
| Delivered on: | 17 April 2015 |
REPRESENTATION
| Solicitors for the Applicant: | Self represented |
| Solicitors for the Respondent: | Farrar Gesini Dunn |
ORDERS
The Husband’s Application, filed 15th September 2014, be dismissed.
The Applicant pay the Respondent’s costs, either as agreed or taxed.
IT IS NOTED that publication of this judgment under the pseudonym Wood & Grover is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT CANBERRA |
CAC 1444 of 2013
| MR WOOD |
Applicant
And
| MS GROVER |
Respondent
REASONS FOR JUDGMENT
Introduction
In an Application, filed 15th September 2014, the self-represented Applicant, Mr Wood, relevantly sought the following order:[1]
[1] I need not set out the consequential and other orders that seek the division of the property “as the Court sees fit”, other specific orders in relation to the delivery up of nominated chattels (e.g. a certain boning knife), and the repayment of the sum of $68,316.73 (plus interest) “for return of wages deposited into the Respondents [sic] Bank account from 29th April 2010 to 29th March 2012.”
That the Binding Financial Agreement Between the Applicant and the Respondent be set aside.
A copy of the Binding Financial Agreement (“the BFA” or “the Agreement”), dated 8th October 2010, is annexure C to Mr Wood’s affidavit, also filed 15th September 2014. On its face, the Agreement purports to have been made pursuant to s.90B of the Family Law Act 1975 (“the Act”). Annexure D to the same affidavit is a copy of a letter of advice to Mr Wood from a solicitor (Mr O’Brien), dated 6th October 2010.
With both parties residing in Canberra, it is curious that the solicitor who advised the Husband is in (omitted) ((omitted)), and the lawyer who advised the Wife, practices in Melbourne. That said, the Wife’s affidavit, filed 17th October 2014, explains (par.13 ff.) the ‘complete online BFA service’ provided by (omitted), which included (for a fee) the provision of independent legal advice. Curiously too, although the two solicitors who advised the parties are in separate states (NSW and Victoria) the wording of the letters of advice is, in very large measure, identical.
By a Response, filed 17th October 2014, the Wife seeks orders for the Application to be dismissed (with costs).
Both parties filed detailed written submissions, and initially agreed that the matter be determined “on the papers.” Part of those “papers” included copies of letters between the parties’ solicitors in February, May and June 2013 (annexures B, C & D to the Wife’s affidavit filed 17th October 2014) in which very general contentions were made on the Husband’s behalf of the regarding grounds to set aside the Agreement. Those grounds are not specified in that correspondence other than by way of response from the Wife’s solicitors. There is no suggestion that anything else happened following the exchange of correspondence until the Husband’s current Application was filed in September 2014. The Husband is self-represented.
The Husband’s basic contentions are that at the time of signing the Agreement (a) he had been under pressure by the Wife (for approximately one month) to sign it prior to the parties’ marriage, (b) his relationship with the Wife and the pressure he had been placed under by her amounted to either undue influence or unconscionable conduct, (c) the relationship generally, at the time of signing (being one of parties who were betrothed or affianced), was one where a presumption of influence could or should be presumed (and that they were drinking at the time of signing), and (d) given that he had/has a range of medical conditions, which are supported by correspondence from his psychiatrist(s), his vulnerability was, in effect and in fact, exploited by the Wife in getting him to sign the Agreement.
I should note that following the filing of submissions, the Court more recently invited the parties to make themselves available for cross-examination. The Wife’s solicitor’s responded, saying that if the Wife was required for cross-examination, so too would Mr Wood be required; but the Husband did not reply at all. In such circumstances, and notwithstanding the difficulty of doing so (particularly in relation to contested factual matters), the Court has little option but to proceed to determine the matter “on the papers.” An alternative course in such circumstances would have been to list the matter for an undefended hearing; however, given the submissions having been filed, I have chosen to determine the matter on the papers.
For the reasons that follow, I do not accept the Husband’s contentions, and otherwise I generally accept the submissions of the Respondent, which leads to orders that the Husband’s Application must be dismissed with costs, either to be agreed or taxed.
The Husband’s Evidence
Here I have regard only to the matters set out in the Husband’s affidavit, filed 15th September 2014. His later affidavit, filed 3rd November 2014, simply annexes documents which he says support his claim for the repayment of funds from the Wife to which I have earlier referred.
The parties met via the online dating service (omitted) in 2008.
At the time of meeting and since, the Applicant Husband has been diagnosed with, and been on medication for, a bi-polar disorder, post-traumatic stress disorder (“PTSD” – the cause of the PTSD is not explained) and attention deficit disorder (“ADD”). Annexure A to the Husband’s Affidavit contains correspondence from Dr T and Dr B regarding his diagnoses and medication. I note in particular that the letter from Dr B (dated April 2009) lists a range of medication prescribed for Mr Wood where the psychiatrist notes that one particular medication “works like a dream”. In the absence of any other evidence, the Court may assume from this that there is no medical reason why the Husband was not, or should not be considered, to be otherwise competent at the time of signing the Agreement.
In his written submissions, the Husband said that he had formerly been a (occupation omitted) with (employer omitted). This experience gave him (as I note below) quite some capacity in the preparation of his submissions. I assume (but make no finding about it in the absence of other relevant evidence, and in the absence of any explanation) in passing (nothing more) that his PTSD may have resulted from some incident(s) in which he was engaged during his time of service in the (employer omitted).
It seems not disputed that the relationship progressed from late 2008 until the Husband moved in with the Wife in (omitted) 2009.
Although the Husband details some material regarding the financial circumstances of the parties at that time, and various arrangements said to deal with various debts and living expenses, it is sufficient to note the following matters which are largely not contested:
a)At the commencement of cohabitation, the Wife owned a unit in (omitted). The Wife deposed that this unit was unencumbered at the commencement of the relationship.
b)The Husband says that he proposed marriage to the Wife in (omitted) 2009.
c)The Agreement is dated 8th October 2010.
d)Both parties confirm that there was significant discussion between them about who would provide the independent legal advice regarding the Agreement, the Husband saying that he wished to obtain it through the (employer omitted). The Husband deposed that “almost every night for a month before I signed the document” the wife placed him under significant pressure to sign it. He said that this pressure led to him becoming very depressed. He also claimed that part of the pressure exerted by the Wife were threats by her (and the Wife’s Mother) to have him thrown out of the residence.
e)He confirmed that he had a lengthy conversation with the solicitor who had been arranged to provide advice regarding the Agreement.[2]
f)The Husband claims a range of matters that the solicitor did not explain or advise him on regarding the agreement including any methods or process of appeal; he says that he was so depressed during or following speaking with this solicitor that he did not take it any further.
g)A friend of the Husband (Mr S) witnessed the Agreement.
[2] The general details of the conversation with the independent lawyer are set out at paragraphs 25 – 28 of his Affidavit.
The Husband says that at the time of the Agreement being witnessed by his friend, in the light of comments made by the Wife threatening him with eviction from the residence, he “mentally crumbled”. He says he signed the document “under extreme mental and emotional stress”.
The Husband confirmed that the parties were married a week after the signing of the Agreement.
The Husband confirmed (par.34) that from the time of the marriage until 2012, the parties’ relationship “seemed to go along fairly well”.
In March 2012 – leaving aside the various matters alleged by the Husband regarding credit card debts and the like – the Husband confirmed that the Wife and his Mother-in-law advised him that they had bought a house in the Canberra suburb of (omitted) and that, in effect, it was being financed by the sale of the Wife’s unit and a unit in which his Mother-in-law then resided.
The Husband claimed (pars.36 – 43) that the Wife demanded of him certain monies by way of rent (which matters are denied by the Wife).
The Husband said that in approximately August 2012 he started to become very depressed which, he says “was caused by the way the Respondent treated me during the signing of the Binding Financial Agreement” (par. 44). He also said that his depression was related to not knowing what happened to certain monies he said he had provided to the Wife.
The parties separated on 9 September 2012 in circumstances which need not be detailed – as alleged by either party – other than to note that the Husband contends that he was effectively thrown out of the residence late one evening following which he said he spent two nights in the car park at (omitted) before he could find somewhere to stay. The Husband remains employed as a (occupation omitted) and, it would appear, he was so employed at the time of signing the Agreement
The Wife’s Evidence
Briefly stated the Wife’s evidence was as follows. She confirmed that the parties commenced living together as a couple in (omitted) 2009, married on (omitted) 2010, separated 9 September 2012, and were divorced on 2nd December 2013. There are no children of the relationship.
The Agreement was signed on 8th October 2010. The Wife deposed that she entered it to protect herself from the various stresses and strains she had suffered following the breakdown of a previous relationship. She confirmed that she wished to protect her assets in the light of that experience. She said at the commencement of the relationship she had assets that were greater than the Husband. She was also concerned to protect any inheritances that were likely to be received by either of the parties.
The Wife said that she and the Husband spoke about entering into the Agreement “for a couple of months prior to the wedding”. She was advised generally that the cost of having a Binding Financial Agreement prepared would likely cost a couple of thousand dollars. She explored (after discussion with the Husband) finding a more economical way to prepare the Agreement. She found an online template provided by “(omitted)” she says is an online website that provides templates for legal documents. (omitted) provided the template for the Agreement (at a cost of approximately $150.00) and at an extra cost of approximately $495.00 each, independent legal advice was set up for each of the parties.
She said she completed the documents, discussed them with the Husband which also included completing the Husband’s schedule of assets and liabilities. She said that the Husband said to her that he was okay and happy with what had happened.
The Wife deposed that at no time during the process of inquiry and discussion about the Agreement did the Husband express any concerns or that he felt bullied about entering into the Agreement.
In relation to the legal advice provided for the Agreement the Wife deposed that she denied any pressure and confirmed that as part of the online “package” legal advice was part of that fee.
When information was provided to each of the parties regarding contact details for the solicitors and the like, the Wife says she encouraged the Husband to speak with his nominated solicitor about “any concerns or issues you have”. The Wife says that the appointment with the Husband’s solicitor was arranged directly through (omitted). She says that the Husband confirmed to her that he had been contacted by that solicitor.
The Wife confirmed that the Agreement was witnessed by Mr S on 8th October 2010 who is a friend of the Husband’s. She said that there was very little wine consumed prior to the signing of the document because, she says, she was conscious of the need to sign the Agreement.
The Wife otherwise denied any pressure being brought to bear on the Husband. She also confirmed that the parties married on (omitted) 2010, 15 days after the signing of the Agreement, not “a week” as deposed to by the Husband.
In the current circumstances, I do not propose dealing with the Wife’s evidence regarding the assets held before and during the relationship (pars. 25-34).
From paragraph 35 and following of the Wife’s Affidavit, she sets out her knowledge of the Husband’s health. She confirmed the range of conditions noted earlier in these reasons such as PTSD and bi-polar. She also confirmed that she attended an appointment with the Husband upon Dr T. She recalled (without specifying any date for the appointment) that during a consultation with Dr T at which she was present, he said to the Husband words to the effect that the Husband was going well, he should keep up his medication, and that “if you do that, have sufficient amounts of sleep, all will be well” (par. 36).
The Wife deposed that she had no involvement with the Husband’s medication besides prompting him from time to time to take the medication with him whenever they were going on a trip. She confirmed that he seemed stable and in a good frame of mind when he signed the Agreement. She confirmed that the Husband has worked as a (occupation omitted) employed by the (employer omitted). She says that as far as she is aware, he has never had any difficulties discharging the responsibilities of his employment.
As noted earlier I do not propose dealing with other matters set out in the Wife’s affidavit in relation to the circumstances of the parties’ separation and matters since. It seems to me that they are not relevant to the matters that I am required to determine.
The Husband’s Submissions
The Husband’s detailed written submissions (filed 10th November 2014) contend that:
(a)s.90G of the Act was not complied with;
(b)he did not receive “advice” as prescribed by s.90G;
(c)the Agreement is void, voidable or unenforceable;
(d)the Agreement was made under duress;
(e)the Agreement was procured by the undue influence of the Wife;
(f)The Agreement was procured by the Wife by her unconscionable conduct.
Somewhat summarily stated, the grounds upon which the Husband relies may be considered as follows.
First, the Husband contends that the terms of s.90G of the Act were not complied with. In particular he says that he was not properly advised by the independent lawyer in (omitted). As such, he says that the Agreement should be set aside pursuant to s.90K.
In his affidavit, it will be recalled that Mr Wood said he had a [somewhat lengthy] telephone call with Mr O’Brien in the course of which advice was given, and that he later received a letter of advice.
Unfortunately, in his written submissions, Mr Wood does not address the detail of the solicitor’s letter of advice provided to him, dated 6th October 2010, which is annexure D to his primary affidavit. By reference to the headings in that letter, it (a) provided brief background of the parties, (b) confirmed that the solicitor (Mr O’Brien) acted only for Mr Wood, (c) noted what a binding financial agreement dealt with, (d) answered the question whether a BFA can be cancelled by the court (including matters of non-disclosure), (e) commented on whether a BFA can be amended by mutual consent, (f) how a BFA can be enforced, (g) what rights are lost once a BFA is signed, (h) what happens if someone dies, and (i) stamp duty matters in relation to BFAs.
In relation to his claims of unconscionable conduct, duress and undue influence, on the one hand, Mr Wood showed significant industry, research capacity and no small amount of understanding in referring to a wide range of authorities on each of these matters, but on the other hand, he sometimes conflated each discrete area. This is quite understandable given the often-times similar concepts. It is also possible to consider Mr Wood’s submissions as all coming generally under the heading or issue of “unconscionable conduct.” This is because, for example, when discussing what he describes (at p.2) as “submissions 2 – 4” [grounds (b) – (d) above] he said: “I submit that the Respondent engaged in unconscionable conduct with regard to the lead up and signing of the document.” Similar comments are made at various places throughout the submissions. At the end of his submissions (p.9), the Husband quoted the following comments by Kitto J in Blomley v Ryan (at CLR p.415: the citation was not provided by Mr Wood) (the Court has added the emphasis to the quote from Kitto J’s judgment):
This is a well-known head of equity. It applies whenever one party to a transaction is at a special disadvantage in dealing with the other party because illness, ignorance, inexperience, impaired faculties, financial need or other circumstances affect his ability to conserve his own interests, and the other party unconscientiously takes advantage of the opportunity thus placed in his hands.
The ‘classic cases’ to which Mr Wood refers in his submissions, sometimes with extracts from certain judgments, range from Blomley v Ryan (as just noted), to Crescendo Management Pty Ltd v Westpac Banking Corporation, to Commercial Bank of Australia Ltd v Amadio.[3] He does not discuss any relevant authority regarding principles in relation to binding financial agreements under the Act.
[3] Blomley v Ryan (1956) 99 CLR 362; Crescendo Management Pty Ltd v Westpac Banking Corporation (1988) 19 NSWLR 40; Commercial Bank of Australia Ltd v Amadio (1983) 151 CLR 447.
From Amadio, Mr Wood quoted comments by Deane J:[4]
The jurisdiction is long established as extending generally to circumstances in which (i) a party to a transaction was under a special disability in dealing with the other party with the consequence that there was an absence of any reasonable degree of equality between them and (ii) that disability was sufficiently evident to the stronger party to make it prima facie unfair or “unconscientious” that he procure, or accept, the weaker party's assent to the impugned transaction in the circumstances in which he procured or accepted it. Where such circumstances are shown to have existed, an onus is cast upon the stronger party to show that the transaction was fair, just and reasonable.
[4] Amadio CLR at p.474.
Mr Wood quoted other matters that are said to be from the judgment of Deane J in Amadio, but I cannot find them; they are certainly not in the page citation he has given. That said, there are comments in the separate judgments of Gibbs CJ and Mason J in Amadio that refer generally to the role of a plaintiff obtaining independent advice.[5]
[5] See, for example, Amadio 151 CLR at p.460 (Gibbs CJ).
The Wife’s Submissions
At the outset of the Wife’s submissions it is noted that at the time of signing the Agreement the Wife had a net worth of $656,096.04, and the Husband’s net worth was $13,503.69. The Wife notes in her submissions on a number of occasions that the Agreement made no provision for the transfer or disposition of any property; it only made provision for each of the parties not to make any claim against the property of the other.
By reference to cases such as Hoult and Wallace & Stelzer, the Wife outlines at length how the Agreement complies with the terms of s.90G of the Act.[6] Of significance is the statement of independent advice provided to the Husband by a solicitor. Further, the Wife makes much of the fact that the Husband’s own evidence is that he had a long conversation with this solicitor, after which the letter of advice was provided. The solicitor is not on affidavit, from which the Wife submits the Court should draw the relevant inference that evidence from the solicitor would not assist the Husband.[7]
[6] Hoult v Hoult (2014) 50 Fam LR 260; Wallace & Stelzer (2013) 283 FLR 126.
[7] See Jones v Dunkel (1959) 101 CLR 298.
The letter, as well as the statement from the solicitor attached to the Agreement, provides prima facie evidence of compliance with s.90G.[8]
[8] See Hoult at [95] – [102] (Thackray J), and [276] – [280] (Strickland & Ainslie-Wallace JJ).
The same authorities to which reference has already been made note that the adequacy of the advice is not a relevant consideration.
The Wife further submitted that if the Court found that there was merit in the challenge to the independent advice provided to the Husband, the Court should otherwise exercise its discretion to remedy any relevant non-compliance. I need not canvass this part of the submissions in any detail. She also noted that “fairness” was not a consideration or factor in the Court’s exercise of any relevant discretion.
In relation to the Husband’s submissions under s.90K to set aside the Agreement, the Wife submitted as follows (summarily outlined).
Firstly, the Wife notes that even if one or more of the grounds set out in s.90K are made out, there remains a discretion whether or not to set aside the BFA.
Secondly, after noting briefly some historical matters in relation to the law regarding equitable fraud, duress and “illegitimate pressure”, the Wife’s submissions make a number of claims in relation to McHugh JA’s (as his Honour then was) judgment in Crescendo Management Pty Ltd v Westpac Banking Corporation. While nothing necessarily turns on them for the purposes of the current matter, there are a number of erroneous statements in the submissions in this regard. They are elementary errors which should not have been made.
For example, the Wife’s solicitors submit that “neither Samuels JA nor Maxwell JA elected to join or concur with the judgment of McHugh JA in Crescendo Management.” There are two very basic errors in this sentence: (a) there was no “Maxwell JA” who was part of the Court of Appeal in this matter. Indeed, Maxwell J was never part of the Court of Appeal. The other Justice of Appeal in Crescendo Management was Mahoney JA; (b) both Samuels and Mahoney JJA agreed with the judgment of McHugh JA. At 19 NSWLR at p.41, their Honours both said: “I agree that the appeal should be dismissed with costs on the ground stated by McHugh JA…” (Samuels JA), and “I agree with McHugh JA …” (Mahoney JA).
Further to this, in standard texts on equity, Crescendo Management is (a) cited with approval, (b) the concurrence of Samuels and Mahoney JJA with the judgment of McHugh JA is noted, and (c) noted as having attracted widespread appellate support in Australia and England (with relevant citations for such statements given in the text).[9]
[9] See, for example, Meagher, Gummow & Lehane’s Equity: Doctrines & Remedies (5th Edition) (J.D. Heydon, M. J. Leeming & P.G. Turner) (Sydney: LexisNexis Butterworths, 2015) at p.445 [12-065].
Such basic errors (a) should not be made, and certainly not by lawyers who hold themselves out to be experts in family law, and (b) could suggest that either the researcher and or the person who finalised the submissions did not check basic statements of principle but instead perhaps relied upon some secondary or other source that plainly was inaccurate.
Returning to the Wife’s submissions, she noted that whatever the various claims made by the Husband, on his own evidence the Wife spoke with him “almost every night for one month” about the BFA and the importance [to the Wife] of it being signed. Indeed, the marriage would not take place without it being signed; this was because (as earlier noted) the Wife had a bad experience in a property settlement in an earlier relationship. The BFA was a safe-guard for her in the relationship with Mr Wood.
While the Husband says that he felt overborne by this “discussion”, the Wife’s submission is that the Husband had ample opportunity to take any other advice, in addition to the advice he was given by the solicitor (Mr O’Brien) who provided the certificate regarding the provision of advice to Mr Wood, dated 6th October 2010, which is attached to the BFA.
The Wife then goes through an abbreviated history of the law in relation to unconscionable conduct, which I need not summarise save to mention that among the elements that must be established is that the taking of advantage must have been unconscientious.[10] In detail, in Amadio Gibbs CJ said, at p.459:
A transaction will be unconscientious within the meaning of the relevant equitable principles only if the party seeking to enforce the transaction has taken unfair advantage of his own superior bargaining power, or of the position of disadvantage in which the other party was placed. The principle of equity applies “whenever one party to a transaction is at a special disadvantage in dealing with the other party because illness, ignorance, inexperience, impaired faculties, financial need or other circumstances affect his ability to conserve his own interests, and the other party unconscientiously takes advantage of the opportunity thus placed in his hands.” Blomley v. Ryan [1956] HCA 81; (1956) 99 CLR 362, at p 415, per Kitto J., and see at pp. 405-406, per Fullagar J.
[10] See Amadio 151 CLR 447 at p.459 (Gibbs CJ).
The Wife contends that the mental health issues raised by the Husband which are said to have impeded or impaired his capacity properly to understand the import of entering a BFA do not in fact support such a contention. The evidence provided by the Husband simply sets out that he has a number of mental health issues, but there is no suggestion that those issues impede his general capacity, or that he lacked relevant capacity to enter into the BFA. Further, the Wife submitted that whatever of the Husband’s asserted depression following the BFA discussion(s), there was ample opportunity to obtain further advice if he so wished prior to signing the Agreement.
Next the Wife addressed whether the relationship as between spouses was recognised, at law, as raising an inference or presumption of influence, as asserted by the Husband. Again, I need not outline the various authorities relied upon by the Wife in relation to this, other than to note that the Wife contends that no such presumption of influence exists, and further that on the facts of the matter, there was no undue influence.
The Wife noted that the BFA was witnessed by a friend of the Husband. That friend is not on affidavit, from which follows the so-called usual inference that this person’s evidence would not assist the Husband.
Finally, again the Wife noted that there was no disposition of funds or assets as between the parties under the BFA. Rather, all that happened was that the Husband gave up a claim against the assets of the Wife, to which (it was submitted) he had made no relevant contribution.
Discussion & Disposition
In my view, the matter may be disposed of on the basis and application of principle drawn from the following authorities.
First, in Wallace & Stelzer, the Full Court (Finn, Strickland & Ryan JJ) said, at [101] – [103]:
[101] The person who seeks to establish that a financial agreement is binding carries the onus of proof (Hoult & Hoult (2013) FLC ¶93-546. Applied to the facts in this case, this means that it fell to the wife to establish that the parties received legal advice in accordance with s 90G(1)(b). As a consequence of recital W and by tendering the signed agreement and the certificates, prima facie the wife was able to discharge her legal onus.
[102] However, once the husband put in issue whether the required legal advice had been provided, there was an onus on him to adduce evidence which would disprove or at least throw into doubt the inference or conclusion to be drawn from recital W and the certificates (being that legal advice had been given) (Hoult at [62] and [261]). Therefore, it was necessary for the parties to give evidence about the provision of advice, and evidence was also adduced from their respective solicitors.
[103] Although there appeared to be some suggestion in the husband’s case before us that in a case such as the present the court is required to consider the accuracy of the legal advice provided, we did not understand that issue to be ultimately pressed. But in any event we note that in the recent Full Court decision of Logan & Logan [2013] FamCAFC 151, and relying on Hoult, it was held that the only enquiry necessary is as to whether advice was given, and not as to the content of that advice.
On the evidence before the Court it clearly establishes that there are relevant certificates provided attached to the Agreement, which conform to the terms of ss.90B and 90G of the Act. That being so, the onus falls to Mr Wood to provide relevant evidence that would enable or entitle the Court to challenge the advice given or otherwise entitle a Court to set aside the Agreement.
In the light of the comments by the Full Court in Wallace & Stelzer, and similarly in Hoult at [96] – [97] and [276], the Court is not required to check the quality of the advice given to the parties. In my view, there is nothing put before the Court by Mr Wood that can properly challenge the certificate from Mr O’Brien about the relevant advice given to him. If it needs to be stated, the detail of the letter of advice also given by Mr O’Brien tells against the alleged lack of adequate advice. Likewise, Mr Wood’s own evidence that he spoke with Mr O’Brien at some length indicates if not confirms the opportunity he had to seek further advice from this solicitor.
On this ground of the adequacy of the advice given to the Applicant, the challenge to the BFA must fail.
Secondly, in Amadio, Mason J said, at p.461:
Historically, courts have exercised jurisdiction to set aside contracts and other dealings on a variety of equitable grounds. They include fraud, misrepresentation, breach of fiduciary duty, undue influence and unconscionable conduct. In one sense they all constitute species of unconscionable conduct on the part of a party who stands to receive a benefit under a transaction which, in the eye of equity, cannot be enforced because to do so would be inconsistent with equity and good conscience. But relief on the ground of “unconscionable conduct” is usually taken to refer to the class of case in which a party makes unconscientious use of his superior position or bargaining power to the detriment of a party who suffers from some special disability or is placed in some special situation of disadvantage, e.g., a catching bargain with an expectant heir or an unfair contract made by taking advantage of a person who is seriously affected by intoxicating drink. Although unconscionable conduct in this narrow sense bears some resemblance to the doctrine of undue influence, there is a difference between the two. 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.
In my view, there is insufficient evidence provided by Mr Wood upon which the Court could form any relevant view that there was anything unconscionable in the terms and signing of the BFA. He may well have felt some degree of pressure to sign the Agreement. But he had more than ample opportunity to seek further legal advice, in addition to that given to him orally and in writing by Mr O’Brien. There is nothing on the evidence, in my view, that would transform the relationship and the circumstances of the signing of the BFA into either some relevant form of undue influence, or unconscionable conduct on the Wife’s part. No such case has been made out by Mr Wood.[11]
[11] In addition to these comments, I note later some further observations by the High Court in Berbatis that likewise indicate the flawed nature of the Husband’s Application, to the effect that a superior bargaining position, of itself, does not give rise to a claim of unconscionable conduct.
In the light of the certificate issued by Mr O’Brien, together with the letter of advice provided by him to Mr Wood, as well as the somewhat lengthy telephone conversation between Mr Wood and Mr O’Brien to which the Applicant deposed, in my view the terms of s.90B, and s.90G, of the Act have been complied with, and the Agreement remains binding.
Moreover, as the Full Court stated in Hoult, at [305] and [306], considerations of the fairness or “content of the bargain” set out in the Agreement are not relevant considerations. At the paragraphs mentioned, the Full Court said (Strickland & Ainslie-Wallace JJ):
We are firmly of the view that the content of the bargain has no relevance to the exercise of discretion under s 90G(1A)(c) and we base that on the plain words of the paragraph. That is also consistent with what Justice Strickland said at first instance in Parker (for example in paragraph 108 of his Honour’s reasons for judgment), and neither of the judges who formed the majority in the Full Court in Parker found otherwise.
We do not accept that because the enquiry in paragraph (c) is as to injustice and inequity, the content of the bargain must have some relevance. The issue of injustice and inequity can far more easily be seen as directed to whether, given the nature and extent of the non-compliance with the s 90G(1) requirements, it would be unjust and inequitable if the agreement was not binding.
In my view, none of the grounds set out in s.90K of the Act have been established to any relevant degree that would warrant the Court to intervene or otherwise to interfere with the Agreement signed by the parties.
Further, there is neither any relevant evidence, nor legal principle, to support his contention that the spousal relationship gives rise to a presumption of influence.[12] Indeed, as the High Court said long ago in Yerkey v Jones, and accepting the context of the facts of and the discussion in that case, the relationship between Husband and Wife does not fall within any relevant category of presumption of influence.[13]
[12] Generally, see the brief discussion by the High Court in Whereat v Duff (1973) 47 ALJR 540, and the more detailed discussion in Meagher, Gummow & Lehane’s Equity: Doctrines & Remedies (5th Edition) (J.D. Heydon, M. J. Leeming & P.G. Turner) (Sydney: LexisNexis Butterworths, 2015) at pp.483 ff [15-025] ff.
[13] See Yerkey v Jones (1939) 63 CLR 649 at p.675 (Dixon J). Further, see the general comments by Gleeson CJ in Australian Competition and Consumer Commission v C G Berbatis Holdings Pty Ltd (2003) 2214 CLR 51 at [14].
Finally, although mentioned earlier, according to Full Court authority such as Hoult and Wallace & Stelzer, the quality of the advice is not a relevant consideration once there has been established compliance with the requirements of s.90G of the Act. Further, as a qualification in any event, in Garcia v National Australia Bank Ltd, the High Court distinguished between cases where there are contentions of undue influence, in contrast to cases where it is alleged that there is a failure adequately and accurately to explain the nature of the transaction that is being undertaken, or proposed to be undertaken.[14]
[14] Garcia v National Australia Bank Ltd (1998) 194 CLR 395 at [23] (Gaudron, McHugh, Gummow & Hayne JJ).
In Garcia, at [31], the High Court also commented on the relevant need for proper explanation that is provided by “a competent, independent and disinterested stranger.” Such comments must, of course, be qualified by reference to the statutory regime provided for by s.90G of the Act and the authorities to which I have referred – Hoult and Wallace & Stelzer – which discuss the operation of that statutory regime provided under Part VIIIA of the Act.
There is no question here that Mr O’Brien was an independent and disinterested stranger. Although Mr Wood questions his competence, the detail of the letter of advice from Mr O’Brien to the Applicant, which is before the Court, does not suggest that the solicitor who provided the advice was not also competent. And to state yet again, the authorities mentioned confirm that the quality of the advice, for the purposes of the Act, are not formally matters about which the Court can relevantly inquire into. Once the certificate is provided by an independent legal practitioner for the purposes of s.90G, the onus shifts to the person challenging the BFA. That onus shifted in this case, and Mr Wood, in my view, has not provided evidence that is sufficient to warrant the BFA being set aside.
Finally, I note the following comments by Gleeson CJ in ACCC v Berbatis, where, at [14], his Honour said:[15]
Unconscientious exploitation of another's inability, or diminished ability, to conserve his or her own interests is not to be confused with taking advantage of a superior bargaining position. There may be cases where both elements are involved, but, in such cases, it is the first, not the second, element that is of legal consequence.
[15] Australian Competition and Consumer Commission v C G Berbatis Holdings Pty Ltd (2003) 2214 CLR 51.
The distinction made by Gleeson CJ would seem to be particularly apt in the current matter. It seems to me to have been a situation in relation to entering the BFA where the Wife, by virtue of her superior asset position and her desire to protect it, was in a stronger or superior bargaining position to that of the Husband. There is no legal consequence for that superior position, particularly where, as here, there is otherwise due compliance with the statutory regime provided by Part VIIIA of the Act.
In my view, the Husband has not established any relevant ground that would warrant the Court to interfere with the binding financial agreement that was entered into by the parties on 8th October 2010. Accordingly, that Agreement must be considered to be a valid and binding financial agreement in relation to the parties’ assets and property. Accordingly, the Court may not otherwise make any determination in relation to any adjustment of property interests involving the parties.
For the reasons given, the Application must be dismissed together with an order that the Applicant pay the Respondent’s costs, either as agreed or taxed.
I certify that the preceding seventy-nine (79) paragraphs are a true copy of the reasons for judgment of Judge Neville
Associate:
Date: 7 April 2015
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Family Law
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