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Latest Notable Cases samples

This is a sample (posted 25 September 2018) of "latest notable cases", which is posted monthly with live links for members at the Members' Home Page under Members' Practice News. Also available at our Members' Home Page (along with our E-Book, our up-to-the-minute family law and child support practice news, our online forms and precedents and our free legal help line) is our online members' Archive of all our back issue indexed case notes (assembled by topic and with live links to AustLII), useful papers and client brochures.

Our E-Book offers links to all the AustLII-published cases we cite, links to forms and precedents and a word/phrase search function (also available at our archive once you have chosen your topic).

Financial agreements – Construction of a contract and rectification – “Pre-marital agreement” rectified and declared a binding financial agreement although it failed to state that it was made under s 90B (and, in a form that appeared to have been downloaded from the internet, purported to be governed by State law)

In Squibb & Graham [2018] FCCA 1906 (13 July 2018) Judge McNab considered a document entitled “Pre-Nuptial Agreement” in respect of which each party had received independent legal advice. The document was signed before marriage but did not refer to s 90B nor the Family Law Act, purporting instead to be “governed by the laws of the State of Victoria”. The wife argued that the agreement should be rectified so as to refer to the Family Law Act and declared a binding financial agreement. The husband contended that it was not binding.

The agreement provided that the wife retain commercial premises and her business, while the husband was to retain a commercial property and residential property overseas. The statements of independent advice were signed but not dated, but no issue was taken with the certification process.

The Court said (from [19]):

“ … [E]vidence of the pre-contractual negotiations is admissible to establish the objective background facts known to both parties and is relevant to the claim for rectification: see Euphoric Pty Ltd v Rydelar Pty Ltd [2006] NSWSC 2 at [31]-[33].

( … )

[36] In relation to the application seeking rectification of the agreement, the Court has power to make any of the types of orders traditionally made by courts of common law and equity in relation to contracts by virtue of s 90KA [FLA] ( … )

( … )

[38] The wife’s principal contention is that read in its totality and in particular by reference to its operative terms, the document evinces an intention of the parties to enter an agreement prior to their marriage in relation to property and spousal maintenance issues. The applicant points to the defect in the document in that the document fails to state that it is made under s 90B of the Act and thereby fails to comply with the definition of a financial agreement in the Act.

[39] As is noted in Senior & Anderson [[2011] FamCAFC 129] at [88] and [89] the term ‘binding financial agreement’ is not defined in the Act, rather, the Act refers to a ‘financial agreement’. Section 4 of the Act provides that ‘financial agreement’ has two essential ingredients the first being that there must be ‘an agreement’ and the second that there must be an agreement made under either ss 90B, 90C or 90D. Agreement is not defined and therefore carries its ordinary natural meaning and the principles of law and equity apply so as to vitiate the agreement if the relevant circumstances in order to do so are made out.

[40] In that case, all the members of the Full Court agreed that the agreement could be rectified in accordance with legal and equitable principles to correct references to s 90C to become s 90D (the majority were of the view that the agreement could not be rectified to cure a defect in the certification process). …

[41] It was therefore submitted by the wife that the ordinary principles of construction of a contract and rectification should be applied in order to rectify the agreement such as to make specific reference to s 90B and to sever those parts of the agreement which are plainly inapt. ( … )

[42] Both parties agree that the financial agreement as drafted is not a model of clarity and it plainly has not been drafted by a person specifically on notice of the legislative provisions governing financial agreements as defined by the Act.

[43] The document bears all the hallmarks of having been the subject of an internet search and then being downloaded and completed under the misapprehension that it complied with all the legal requirements to give effect to its terms.

( … )

[45] In this case the agreement does not comply with ss 90B or 90C … because it fails to state that it is made under s 90B … and therefore fails to comply with the definition of financial agreement in s 90B.

( … )

[49] The role of the Court is to interpret contracts to give effect to their discernible purpose. The court also proceeds on the basis that where two constructions of an instrument are equally plausible, upon one of which the instrument is valid, and upon the other of which it is invalid, the court should lean towards that construction which validates the instrument: Caltex Australia Petroleum Pty Ltd v Commissioner of Taxation [2008] FCA 1951; (2008) 173 FCR 359 at [170]. ( … )

[50] In my view, on the face of the document the parties intended that they enter into a binding enforceable agreement before their marriage in relation to financial matters. It is stated that the agreement will take effect ‘only upon the solemnisation of the marriage between the parties’. As the parties intended the document to be a binding agreement I accept the submission that the parties intended this to be an agreement made under part VIIIA of the Act and not an agreement that was a void pre-nuptial agreement.

( … )

[52] The evidence of the husband does not suggest that it was not intended that there be an enforceable financial agreement between the parties that would give effect to the terms of the agreement reached.

[53] That the rectification is extensive is not a bar to the Court making the orders. The Court has the power to correct errors that go beyond minor verbal infelicities and errors of grammar and spelling: Chartbrook Ltd v Persimmon Homes Ltd [2009] UKHL 38 …

[54] I accept the wife’s submissions as to content of the document [ie. that the agreement when read in its totality and by reference to its operative terms clearly displays an intention of the parties to enter into an agreement before their marriage in relation to their property and spousal maintenance issues] … and am of the view that it can and should be rectified to make reference to s 90B of the Act and to rectify paragraph 17 [i.e. rectify the reference to the laws of Victoria]”

It was ordered that pursuant to s 90KA of the Family Law Act the financial agreement be rectified by being amended to express that it was made pursuant to s 90B of the Act and it was declared that the financial agreement is binding on the parties.


NOTE – A further 6 cases are summarised for members this month at our Members’ Home Page under “latest notable cases” under the following headings:

Property – Notional add-backs do not offend Stanford – Court’s approach to paid legal fees – Trial judge erred by declining to add back $437,000 paid by wife for her legal fees – Contributions equal during long separation

Children – Trial judge misapplied M v M [1988] HCA 68 where High Court held that a court could be satisfied of an unacceptable risk of harm despite an allegation of past sexual abuse not being made out – Unacceptable risk test does not have a more general application to fact finding in parenting cases

Children – Mother denied procedural fairness where expert’s recommendation for no time was made for the first time from the witness box – Alleged risk of harm and proposed order for no time not supported by child (who at 12 was not consulted by expert) or by another expert or by mother, neither of whom were cross-examined about same

Procedure – Certificate against self-incrimination only available where a party is required to give evidence – In the absence of an order to give it, there was nothing in the Rules as to the duty of disclosure that required wife to give evidence that impinged on her right against self-incrimination – She could decline to give such evidence in response to husband’s allegation of non-disclosure

Spousal maintenance – Applicant not required to pursue employment she knew she could not secure due to inexperience, nor to return to a field of work she had “outgrown” – Respondent found to have capacity to pay maintenance where he had spent $180,000 on legal fees and had valuable assets

Property – Right to litigate a s 79 application is a personal right that does not pass to a trustee in bankruptcy, but s 60 of the Bankruptcy Act has the effect that existing property (and parenting) applications are deemed abandoned if the trustee does not elect to prosecute or discontinue the application within 28 days