Zella & Canino

Case [2022] FedCFamC1F 314

Federal Circuit and Family Court of Australia

(DIVISION 1)

Zella & Canino [2022] FedCFamC1F 314

File number(s): SYC 8744 of 2020
Judgment of: SCHONELL J
Date of judgment: 11 May 2022
Catchwords: FAMILY LAW – FINANCIAL – Where the wife sought to not be bound by a Financial Agreement (“the Agreement”) entered into between the parties – Where the wife contended that the Agreement was not an agreement in accordance with the principles of contract and ought to be set aside for various reasons pursuant to ss 90B, 90E, 90G and 90K of the Family Law Act 1975 (Cth) (“the Act”) – Where the husband sought to dismiss the wife’s application – Court found unconscionable conduct on part of the husband, hardship if the Agreement was not set aside and that the Agreement was not binding pursuant to s 90G(1) of the Act – Ordered that the Agreement be set aside.
Legislation: Family Law Act 1975 (Cth) ss 79, 90B, 90E, 90G, 90K, 90KA
Cases cited:

Abrum & Abrum [2013] FamCA 897

Australia and New Zealand Banking Group and Karam (2005) 64 NSWLR 149

Commercial Bank of Australia Ltd v Amadio (1983) 151 CLR 447; [1934] HCA 14

Ellerton & Jennings (2021) FLC 94-059; [2021] FedCFamC1A 39

Fewster & Drake (2016) FLC 93-745; [2016] FamCAFC 214

Graham & Squibb (2019) FLC 93-892; [2019] FamCAFC 33

Hoult & Hoult (2013) FLC 93-546; [2013] FamCAFC 109

Kaimal & Kaimal [2020] FamCA 971

Thorne and Kennedy (2017) 263 CLR 85; [2017] HCA 49

Whitford and Whitford (1979) FLC 90-612; [1979] FamCA 3

Division: Division 1 First Instance
Number of paragraphs: 200
Date of last submission/s: 2 May 2022
Date of hearing: 24–25 February 2022
Place: Sydney
Counsel for the Applicant: Mr Longworth
Solicitor for the Applicant: Sexton Family Law
Counsel for the Respondent: Mr Batey
Solicitor for the Respondent: Greg Alfonzetti Solicitor

ORDERS

SYC 8744 of 2020

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN:

MS ZELLA

Applicant
AND:

MR CANINO

Respondent

order made by:

SCHONELL J

DATE OF ORDER:

11 MAY 2022

THE COURT ORDERS THAT:

1.The Financial Agreement made 26 October 2007 be set aside.

2.The matter is otherwise adjourned to the Docket Registrar on a date to be fixed.

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 the pseudonym Zella & Canino has been approved…

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AGLC
Zella & Canino [2022] FedCFamC1F 314
Case
[2022] FedCFamC1F 314
Decision Date

CaseChat Overview and Summary

In the matter of Zella & Canino, the Federal Circuit and Family Court of Australia (Division 1) was tasked with determining the validity of a Financial Agreement (the Agreement) entered into between the parties shortly before their marriage in 2007. The wife sought to contest the Agreement, arguing it should not bind her on the basis of unconscionability and other grounds under the Family Law Act 1975 (Cth). The husband, however, maintained the Agreement's enforceability. The court had to decide if the Agreement was unconscionable, whether it should be set aside due to hardship, and if the Agreement complied with the principles of contract.

The court found that the Agreement was indeed unconscionable, primarily due to the husband's conduct. The wife signed the Agreement under pressure, with the husband implying that signing was a prerequisite for the marriage. Furthermore, the husband's illiteracy and limited reading ability meant he could not fully understand the Agreement, despite having it read to him by his brother. This discrepancy undermined the husband's argument that he understood the contents of the Agreement. The court also found that setting aside the Agreement would not cause significant hardship to the husband, as the wife's claims were not excessive. Consequently, the court concluded that the Agreement did not meet the requirements of a binding contract under section 90G(1) of the Act.

The court ordered that the Financial Agreement dated 26 October 2007 be set aside. The matter was adjourned to the Docket Registrar for further proceedings as necessary. This decision ensures that the wife is not bound by the Agreement, reflecting the court's consideration of the circumstances surrounding the Agreement's execution and its impact on the parties.

Orders

Orders of the court

SYC 8744 of 2020

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)

BETWEEN:

MS ZELLA

Applicant

AND:

MR CANINO

Respondent

order made by:

SCHONELL J

DATE OF ORDER:

11 MAY 2022

THE COURT ORDERS THAT:

1. The Financial Agreement made 26 October 2007 be set aside.

2. The matter is otherwise adjourned to the Docket Registrar on a date to be fixed.

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.

Background

Background to the litigation

The Agreement was made less than 2 weeks prior to the marriage of the parties, which took place in 2007. The husband contends that the Agreement is binding. The wife seeks various orders and/or declarations broadly contending that she should not be bound.Background and Procedural History The wife was born in 1968 and is currently aged 53 years. The husband was born in 1961 and is currently aged 61 years. The husband and wife are the parents of X, who was born in 2010. X has been diagnosed with Autism Spectrum Disorder. The parties met in 2006. The wife contends that they met in mid-2006, while the husband contends that they met in early 2006 and started dating soon after. They became engaged in or around mid-2007. In or around late 2007, the husband gave the wife a draft of the Agreement along with a copy of his Will. The wife contends that the husband told her they could not get married unless she signed the Agreement. The husband denies that he said this. In late 2007, the wife went to seek advice about the Agreement from Mr B of C Solicitors. The wife did not sign the Agreement on that day. On the same day, after visiting Mr B, the wife contends that she discussed her concerns regarding the Agreement with the husband. She asserts that the husband said words to the effect that the family law will protect her. The wife also contends that the husband said they would change the Agreement when they were further along in their marriage. On 22 October 2007, the wife went to see Mr B again and signed the Agreement that day. A few days later, the wife received a letter from Mr B stating that despite his advice that she should not be a party to the Agreement, the wife had executed the Agreement. The parties married and commenced cohabitation in late 2007. The parties separated in or around July 2020. On 4 December 2020, the wife commenced proceedings in the Family Court of Australia (as it then was). On 11 February 2022, the wife filed an Amended Initiating Application seeking financial orders related to the Agreement. The hearing took place on 24 February 2022 and concluded on 25 February 2022. The parties proposed that they do written submissions. An agreed timetable provided for the last of the written submissions to be filed by 22 April 2022. As a consequence of some delays, final submissions were not filed until 2 May 2022.Material Relied Upon The wife relied upon the following documents:(1)Amended Initiating Application filed 11 February 2022;(2)Affidavit of wife filed 20 September 2021;(3)Financial Statement of wife filed 20 September 2021;(4)Points of Claim filed 22 March 2021;(5)Case Outline; (6)Written Submissions; and(7)Written Submissions in Reply. The husband relied upon the following documents:(1)Amended Response to Initiating Application filed 8 November 2021;(2)Affidavit of husband filed 8 November 2021;(3)Affidavit of Mr D filed 11 February 2022;(4)Defence to Points of Claim filed 7 May 2021;(5)Case Outline; and (6)Written Submissions.

Evidence

Evidence Before The Court

There was no adjustive payment by one party to the other upon the breakdown of the marriage.Oral Evidence of the Parties Each party urged that I make findings as to the credit of the other. Each suggested that their evidence should be preferred where it conflicts with the evidence of the other. The wife was cross-examined by very experienced counsel. The husband contends in his submissions that the wife was “highly evasive throughout the course of her cross-examination” (at paragraph 7), and that her evidence “was of a neither frank manner nor responsive and clear” (at paragraph 9). The husband also contended that she had to be encouraged to be audible, that she was generally not responsive and that she was prone to making speeches. I accept that the wife had to be asked to speak up on a number of occasions so her answers could be heard. That does not however go to her veracity but rather goes to the softness of her voice. As to the other observations of her evidence, the difficulty is that they are a series of statements devoid of specific examples referenced to the evidence (despite having the benefit of a transcript) with the exception of a reference to pages that were torn from a diary. In respect of that event, it is not clear how that goes to her truthfulness. The missing pages, it is said, may have corroborated the husband’s version of events. They equally may not or indeed may have corroborated the wife’s version. It is just arid and thus pointless speculation. Overall, the submissions of the husband’s counsel as to the manner in which the wife gave her evidence do not accord with my observations of her giving her evidence. I observed that the wife was a careful witness who was generally responsive and answered the questions asked of her. Her evidence was not impugned by cross-examination. The husband was cross-examined by experienced counsel. The husband conceded in answer to questions from counsel for the wife “I am illiterate. I can’t read or write properly” (Transcript 24 February 2022, p.98 line 4). When asked questions about his affidavit, which he said had been read to him by his brother, he more particularly answered:[COUNSEL FOR THE WIFE]: All right. And [Mr D] was with you at the time? ---Yes. And the process was what? How did you understand what was in the document? ---[Mr D] explained it to me. And how did he do that? ---He went – we went through it. Right? ---And he read it.Right? ---And he explained to me what it was, if I had a question, what it meant. Okay? ---He would – he would tell me what it meant, and so forth.Did he read the words out aloud to you? ---Sometimes he does, yes.But sometimes he doesn’t? ---And sometimes he doesn’t, no. And with that document, sometimes he did and sometimes he didn’t? ---Yes. It was a mixture of both.Okay? ---Some of it I could read. Okay? ---But not all of it. (Transcript 24 February 2022, p.100 lines 5–26) The husband’s brother swore an affidavit, where he said the husband’s ability to read and write is very limited. The difficulty with the husband’s evidence is that it conflicts with the evidence of his brother who said that he read the affidavit to the husband before he signed it. The difficulty was compounded by the absence of re-examination to identify which parts of the affidavit were read to the husband and by inference, which were not. I am left in the invidious position where I am unsure what parts of the husband’s affidavit constitutes evidence that he adopts.

Decision

Reasons for decision

I find that Clause 14 is void. Conclusion In light of my findings, I conclude that the Agreement made on 26 October 2007 should be set aside. I will make orders accordingly.

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.