Commercial Bank of Australia Ltd v Amadio

Commercial Bank of Australia Ltd v Amadio | Case summary | Zoe

[17]

The husband relies on an affidavit filed 20 March 2024. At [10] he discloses that he was sexually abused as a minor by a priest who was a relative and again by a teacher at boarding school.
The husband deposes that he was subjected to abuse whilst in Defence by bullying, intimidation, humiliation, and sexual assault.
After leaving Defence in 1988 the husband trained as a Medical Professional and worked for Victoria Health Services from 1989 to 2007.
The husband says that the parties moved to Tasmania in 2008 and operated an unsuccessful small business.
From 2011 the husband says he worked as a fly-in-fly-out Medical Professional in Western Australia and similarly in Queensland from 2016.
The husband deposes at [17] that in 2017 he suffered a significant decline in his mental health. He reported his abuse in Defence to the Commonwealth Ombudsman and made a claim for incapacity. He received a one-off repatriation payment of $50,000 and the life-time Department of Veteran Affairs Pension and benefits.
The husband says he was diagnosed in December 2018 by Dr G, Psychiatrist, with Post-Traumatic Stress Disorder ("PTSD") and co-morbid Major Depressive Disorder. He says that the symptoms identified were suicidal ideation, insomnia, marked reactivity to perceived criticism, memory and concentration deficits, and fatigue.
The husband says that the wife assisted him in his submissions and application and that the wife was witness to the manifestations of his symptoms.
The indication from the husband at [22] is that the relationship between he and the wife was "loving and supportive" until "the beginning of 2022".
The husband's affidavit gives a chronology of the wife's education, that she moved to Melbourne as a legal professional, and of her suffering a "psychiatric injury in the course of her employment". Further the husband references the wife's workers compensation and unsuccessful common law claims noting the wife to have been receiving income benefits from an insurance policy for the past 18 years.
The husband acknowledges at [30] that he contracted HIV in 2019 as a result of sexual encounters he had with men. He says that he immediately advised the wife of his diagnosis and that she was "very understanding, loving and supportive" even though she herself had to endure HIV testing.
The husband deposes that in 2020 he confided in greater detail to the wife's sister as to his male sexual encounters and that the sister then told the wife "sometime in January 2022".
The husband says at [34] that there were discussions by exchanges of text messages and emails between the parties soon after separation "in about late March 2022."
The husband says at [36] that the wife was aware of his "vulnerable state" at the time and confirmed by texts in March and April 2022.
The husband at [37] cites an email of 13 April 2022 from the wife stating:

[43]

(a) he suffers diagnoses of PTSD and Major Depressive Disorder;

(b) at all material times he was at a special disadvantage to the wife in negotiating the BFA by reason of his diagnoses and symptoms;

(c) his capacity to protect his own interests in the negotiation of the BFA was compromised;

(d) the wife pressured him to agree to her terms for a financial settlement and that she thereafter took unconscientious advantage of the husband entering into the BFA;

(e) the BFA provides that the wife receives approximately 84 per cent of the assets (excluding superannuation) and that the husband receives 16 per cent of the assets (excluding superannuation) with the wife to receive approximately 48 per cent and the husband to receive 52 per cent of the parties combined superannuation entitlements;

(f) the husband's DVA pension entitlements are and were at all material times inalienable from the husband by operation of the provisions of the Veterans Entitlements Act 1986 (Cth);

(g) the BFA is unfair and that the terms of the BFA are unfair and unreasonable to the husband;

(h) the wife's conduct was unconscionable within the meaning of s 90K(1)(e) of the Act;

(i) by reason of his mental health and the wife's qualifications as a legal profesional, the husband was dependent upon the wife for emotional and psychological support, trusted the wife, and was prepared to act upon the advice of the wife and that the wife was able to and did influence the husband in his decision to sign the BFA and particularised as:

(i) by communicating with the husband's family, detailing the negotiations she was having with the husband in a manner calculated to, and which did, result in family members urging the husband to agree with the wife's proposal;

(ii) by telling the husband that she could not have any arrangements made for him to see their children because of the stress that she was under in relation to the negotiations of the final settlement; and

(iii) by threatening to "expose" the husband's behaviours in civil and criminal proceedings against him.

(j) that the husband's signature on the BFA was induced by undue influence making it voidable within the meaning of s 90K(1)(b) of the Act and that the BFA should be set aside;

(k) the wife made threats to the husband calculated to having the husband agree to her terms on a financial settlement and that the husband's signature was obtained by duress making it voidable within the meaning of this s 90K(1)(b) of the Act such that the BFA should be set aside; and

(l) the wife made representations to the husband that his DVA pension had a "value" of $733,711 and represented in a hand-written ledger prepared by the wife and provided to the husband on 15 May 2022 thereby representing the DVA pension to be an "asset" in the hands of the husband together with statements that the parties should complete a BFA as the consent order process was subject to "massive delays" and further accompanied by the wife stating that she would not pursue child-support from him if he agreed to the terms of the BFA such that the husband says that his signature was induced by misrepresentation making it voidable within the meaning of s 90K(1)(b) of the Act and that the BFA should be set aside.

[49]

(i) denied she assisted the husband in making his DVA claim and only attended one appointment with the husband to see his DVA Advocate on 10 April 2019 and for less than 10 minutes;

(j) she did not read Dr G's (husband's psychiatrist) report in full until June 2022 and that the husband did not let her read the report at the time it was given to him on or about 24 December 2018;

(k) did not corroborate the history provided to Dr G by the husband of his symptoms and had no contact with Dr G prior to his report;

(l) the husband made threats of suicide:

(i) in December 2019 when the husband said he would kill himself if the wife left him and/or if she told anyone else about him being HIV positive;

(ii) in or about 2020 when the husband told the wife that if she left him then he would make life hell for her and that the kids would suffer too and then he would kill himself;

(iii) in September or October 2020 when the husband called the daughter Ms X and said "if you want this family to stay together you'd better ring your mother and say something otherwise I'm done";

(iv) on or about 27 January 2022 when the husband asked the wife for a copy of her "rough" property split and said that she should not take too long deciding about the marriage as he didn't want to do anything stupid, which the wife understood as another threat to kill himself; and

(v) on or about 30 September 2022 when the husband said to their son, Mr Y, that the only reason he (the husband) was living was because of his relationship with Mr Y.

(m) denied that she was in a superior bargaining position than the husband save and except that she was a legal professional and says that she has not worked in that capacity since November 2003;

(n) denied that she placed pressure on the husband to agree to her terms for a financial settlement save that she admits sending the relevant email, but says that the email speaks for itself in the context of the surrounding circumstances including other text messages including:

(i) text message from the husband of 13 February (set out above);

(ii) text conversation between the parties on 19 April 2022 as follows:

[53]

(r) denied [13] of the husband's Statement of Claim that as a result of his mental health issues the husband is unable to support himself without an income tested pension/allowance or benefit. The wife references the following:

(i) that the husband left Defence in 1988 after applying for and being accepted by the Victoria Health Services to train as a Medical Professional for a 156 week traineeship;

(ii) that the husband became fully qualified as a medical professional in early 1992 and also with a Diploma;

(iii) in early 1992 the husband trained to develop his skills in busier metro branches;

(iv) in late 1995 the husband was successful in his application for the role of an Instructor;

(v) in late 1995 the husband was selected for a division of Victoria Health Services;

(vi) in late 1995 the husband studied for and obtained further qualifications and taught first aid;

(vii) in early 2007 the husband owned and operated a small business in Suburb J, Tasmania which was sold at no loss enabling him to purchase a business in Hobart;

(viii) the husband trained as a professional hospitality worker, operated the Hobart business, employed 2 to 3 staff, and worked from about 7.00am/8.00am until 3.00pm/4.00pm five days per week;

(ix) in late 2011 the husband obtained full-time employment as fly-in-fly-out ("FIFO") Medical Professional in Western Australia requiring rigorous courses to be to be undertaken and also trained and qualified as an Emergency Officer with emergency response skills for mine sites;

(x) in 2012 the husband studied for and obtained a Certificate IV Diploma;

(xi) in early 2013 the husband obtained his Safety Induction and Emergency Training qualifications incorporating air and underwater training;

(xii) in early 2013 the husband undertook driving courses for emergency driving at mine sites and trained as a substances tester;

(xiii) the husband obtained full-time employment in early 2014 with K Pty Ltd at Town L, Tasmania where he was responsible for substance testing and compliance duties;

(xiv) in mid-2014 the husband was offered a full-time position as Health and Safety Officer with Company M, a company contracted for state road maintenance and with a salary of $120,000 per annum;

(xv) in late 2014 the husband returned to FIFO work on a job-share basis and obtained casual work with N Hospital in Compliance and was First Aid Trainer together with being a transport worker with Tasmania Health Services;

(xvi) from mid-2018 the husband worked as a FIFO in medical services in remote mine sites in Queensland; and

(xvii) in early 2022 the husband worked on a farm driving a harvester full-time for up to 6 days per week and 14 hours per day.

(s) denied [15] of the husband's Statement of Claim that paragraph 11.14 of the BFA is unfair;

(t) denied [16] of the husband's Statement of Claim that the BFA conferred substantial benefit on her;

(u) denied at [18] of the Statement of Claim that the terms of the BFA were unfair and unreasonable to the husband;

(v) denied that her conduct was unconscionable;

(w) denied that she was able to and did influence the husband in his signing of the BFA or that the signature was induced by undue influence;

(x) denied [22] of the husband's Statement of Claim and says that the husband knew or ought to have known that his own conduct provided a reasonable basis for family violence orders, civil, or criminal options (Judge should it be prosecutions rather than options) against him;

(y) denied [23] of husband's Statement of Claim;

(z) denied [24] of the husband's Statement of Claim saying that the text messages cited by the husband speak for themselves in the context of their surrounding circumstances;

(aa) denied [28] of the Statement of Claim saying further that the BFA and text messages speak for themselves in the context of the surrounding circumstances and hence denies [29] of the Statement of Claim; and

(bb) denied [30] of the Statement of Claim and says further that the BFA was signed by the husband after having received advice from his legal advisers.

[59]

At [22] of her affidavit the wife relates events of December 2019 where she says the husband disclosed to her that he was HIV positive and that he had been having unprotected sex with men. The husband advised the wife that she would need to be tested against HIV. The wife says that she considered the marriage to be at an end from this date although the parties continued to live under the same roof until 27 January 2022. The wife tested negative to HIV.
The wife deposes that the husband threatened to kill himself when the wife said she would leave him. The husband demanded that the wife not disclose his diagnosis. The wife says that she has been advised by a psychiatrist that she would have been suffering from severe exacerbation of her underlying PTSD (from her previous workplace issues).
At [23] the wife says that during 2020 she endured frequent anger, agitation, and outbursts of rage from the husband and including instances of physical violence [25]. The husband repeated threats to kill himself should the wife leave him.
At [32] the wife deposes that in January/February 2022 the parties had a two hour conversation which she recorded. The husband admitted to continuing to have unprotected sex with random men confirming to the wife that he was bisexual, that he was a sexual exhibitionist, and that he had been active on an online gay website for about 15 years. The parties confirmed their separation and the wife told the husband that she had prepared "a rough property split" which the husband asked for.
The wife deposes at [33] and [34] that she placed caveats on the two real properties and opened her own bank account transferring half of the offset account funds to the new account to ensure her financial security.
The husband moved from the former matrimonial home on 4 February 2022.
The wife deposes to the text message from the husband on 13th February 2022 referenced above suggesting that "...something formally needs to be drawn up in the sake of fairness... The next time you see me will be across a table with someone in a suit taking notes...".
At [41] the wife deposes that during a telephone call on or about 26 March 2022, whilst the husband was living interstate. He again asked for a "property proposal". She deposes:

[77]

Importantly, a Financial Agreement cannot be set aside simply because of a change in one or both of the parties' financial circumstances or because the terms of the agreement are subsequently seen to be unfair to one or other of the parties.[2]
The use of the word "may" in s 90K(1) emphasises the discretionary nature of the consideration and determination for the Court in that should one of the grounds at s 90K(1) be established then the Court has a discretion whether to set aside the Financial Agreement.[3]
Discretion is unfettered but must be exercised judicially and circumstantial to the case.[4]
Commonly a party asserting a fact carries an onus to prove that fact to the requisite standard of proof being here one of on the balance of probabilities.[5] In the context of Financial Agreements it is accepted that the onus of proof rests upon a party seeking to establish the Financial Agreement is binding. There is no issue here as to the Financial Agreement being binding. The sole issue for the Court is whether the Agreement be set aside and here it is the party seeking the positive exercise of that discretion who carries the onus being in this case the husband.
Nevertheless, the question of onus or burden of proof may be blurred or influenced by presumptions of the premises of special disadvantage/disability or unconscionable conduct/undue influence. In Thorne v Kennedy[6] at [34] the plurality held that there are different methods of establishing undue influence (and presumably unconscionable conduct).
This issue was discussed by a later Full Court in Beroni & Corelli:[7]
1. The husband contends that, given the primary judge rejected that this was a case of presumed undue influence..., it fell into the first category described at [34] of Thorne v Kennedy, and thus the onus of proving undue influence rested with the wife.
2. However, the wife submits that the husband has misconceived the issue of onus, both in respect of undue influence and unconscionable conduct. She contends that there is no challenge to the primary judge's findings that the relationship between the husband and wife was one of ascendency and dependence and that the BFA transaction was highly improvident for the wife..., and thus the particular relationship fell into the recognised category of presumed undue influence as discussed in Thorne v Kennedy at [34].

[117]

Firstly, it should be emphasised that it is fundamental to a BFA that parties can "contract out" of the justice and equity requirements of s 79 of the Act. That is, they are able to enter into an agreement binding in the sense of having the same force and effect of a Court order but that it not be "fair". They can enter into a "bad bargain". The essence of the husband's argument here is, however, and as observed in Thorne & Kennedy [56], that an unfavourable agreement might of itself "be an indicium of undue influence". It can only be in this sense, therefore, that the husband argues for a finding that the BFA is "unfair". The BFA in its Recitals at [H] sets out in a discrete table the agreed assets and liabilities of the parties with net value of $2,173,000.
Separately at Recital [I] appears reference to the husband's DVA pension at $1,531.60 per fortnight and that the payment has been valued by an actuary with "a current value of $733,717". The husband's DVA pension is not referred to as an "asset" in the table. Commonly, the husband's pension entitlement might be accepted as a financial resource in the hands of the husband.
Recitals [J] and [K] set out the parties' superannuation entitlements respectively with the wife's valued at $830,000 and the husband's at $876,627.
The parties agree that the wife made greater financial contributions than the husband and specifically with the wife having equity in real property at the commencement of cohabitation which had a "slingshot" effect into the contents of the value of the property pool as at the date of the BFA. Secondly, the parties acknowledge a contribution of $100,000 by the wife's parents. Thirdly, it is agreed that the wife made a superior financial contribution by income during the marriage. Fourthly, the parties acknowledge a superior contribution by the wife as carer of the children.
At [B] and [C] of the Recitals the parties agree the wife receives an income of $190,000 per annum gross and the husband receives income at $1,531.60 per fortnight. The husband's pension is not taxable and is indexed twice yearly and is provided for life. The wife's payment is taxable. It is reviewed quarterly and terminates at the age of 65.
There are three children of the marriage aged 19, 17, and 13 as of the date of the BFA. The parties agreed that the children lived with the wife on a full-time basis and with a continuing financial dependency.
Contemporaneously with the BFA the parties agreed to a Binding Child Support Agreement relieving the husband from his liability to pay child support together with the wife being responsible for independent school fees for the two younger children. Notably, the husband did not argue to set aside the contemporaneous Binding Child Support Agreement.
I calculate that the wife retains gross assets excluding superannuation of value of $2,584,000 giving her net property of $2,063,000. The wife made a cash adjustment to the husband of $255,000 giving her then a net of $1,808,000 which I calculate to be some 83.5 per cent of the pool.
Should the parties' superannuation entitlements be "treated as property" then the wife would receive "property" at value of $2,638,000. The husband would receive "property" at value of $1,225,627 which I calculated to be a split of 68.3 per cent to the wife and 31.7 per cent to the husband.
If "fairness" is to be gauged as a consideration of justice and equity under s 79 of the Act and given the broad discretion conferred under s 79, I am unable to make a finding sought by the husband that the terms of the BFA are "unfair". Specifically, the parties agree that the wife made significantly greater financial contributions. Secondly the adjustments available to the Court, following the consideration of contributions, would very much favour and substantially increase her percentage entitlement. Whilst the husband's pension might be less on a fortnightly basis than the wife's current income, his pension is for life whilst the wife's ceases at 65. His is free from taxation. Hers is not. His is indexed. Hers is subject to review.
The circumstances of the children's living with the wife and her complete financial support for them during their minority would ordinarily attract a significant adjustment and noting the benefit to the husband of the Binding Child Support Agreement. Consequently, within the broad discretion that would be available to a Court, and given the circumstances of contributions and further adjustments, I cannot make the finding sought by the husband that the BFA is "unfair" either in its own terms or if considered against the "justice and equity" considerations of s 79 of the Act.

[119]

In support of this argument the husband relies on firstly his diagnosis of PTSD and MDD and, secondly, as I understand it, that the wife was a former legal professional.
Firstly, the evidence of the three Psychiatrists discloses that both parties suffer the same diagnoses of PTSD and depression and therefore one is not prima facie at a disadvantage vis-à-vis the other.
The husband relies heavily on the evidence of Dr G, Psychiatrist. However, Dr G in evidence agreed that there were inaccuracies in his report relevant to collateral and corroborative material.
Dr G's assessment of the husband's disability sits uncomfortably in many ways with the evidence which, I find, as to the husband's subsequent work history including his work on a farm and in a supermarket apparently full-time or more hours.
Dr G was asked during his cross-examination whether someone can entirely and appropriately function despite the diagnosis and past history and Dr G responded "absolutely". Further, Dr G was asked by counsel for the husband as to an email by the husband to the wife of 25 May 2018, "doesn't the fact of the communication cause you to consider the veracity of what he told you?" Dr G responded: "yes to a degree". Still further, it is apparent that the husband was selective in conveying his social history to Dr G, it being apparent that the sole purpose of the husband's attendance on Dr G in 2018 was to obtain a DVA pension.
Dr G was not able to provide a professional opinion as to the husband's capacity to independently enter into a BFA in June 2022.
For the reasons above, I find little probity in the evidence of Dr G specifically as to the question of whether the husband was at a special disadvantage to the wife as at June 2022.
Dr S's report is dated 3 June 2022 and therefore contemporaneous to the BFA. Dr S notes the husband entering into a BFA, but makes no comment as to the husband's capacity and/or any disadvantage/disability relative to the wife or at all.
There is no evidence from either psychiatrists relied upon by the husband that a diagnosis of PTSD and/or MDD placed the husband at any disadvantage or disability or even impacted his capacity to voluntarily enter a BFA. In fact the tenor of the evidence might be seen to the contrary.
The BFA itself is enlightening in respect of this question. Both parties were represented in the negotiations towards the BFA as distinct from simply obtaining a Solicitor's Certificate. Relevantly, therefore, the husband's Solicitor's Certificate carries acknowledgement by the solicitor that "[the husband] gave assurances which appear to me to be credible that he was not acting under coercion or undue influence". Further at [S] of the Recitals to the BFA appears the following:

[127]

Communications by the wife during the negotiations undoubtedly included her opinion and advice that she had remedies available to her in respect of prosecuting criminal and civil cases against the husband. Equally undoubtedly the wife in those negotiations proposed settlement towards the BFA including not taking those remedies. Prima facie the wife's comments can be interpreted as an inducement (if not a "threat" as submitted by the husband).
Nevertheless, the wife's statements must be seen and considered within the context and fullness of the communications and certainly not in isolation. Firstly, the remedies were in all likelihood available to the wife in both the criminal and civil jurisdictions. No question is taken as to this issue.
Secondly, the husband did not immediately and obviously succumb to the wife's proposals in that negotiations were protracted with the parties putting offers and counteroffers and negotiating terms where the chronology is highly suggestive of agreement being reached by the wife ultimately accepting a counteroffer from the husband. Such might be seen as contrary to the husband succumbing to a threat or inducement.
Thirdly, the husband was represented well before the signing of the BFA with the solicitor being aware of the wife's mention of her criminal and civil remedies, and again where the husband's solicitor was not called to give evidence to contradict the clauses in both the recitals to the BFA and the Solicitor's Certificate as to the voluntariness of the husband's consent. In fact, it is clear from tendered letters that the husband's solicitor was acutely aware of the negotiations directly between the parties and gave her advice to the husband as to the wife suggesting that she might not pursue civil and criminal remedies.
Fourthly, in any event, the wife is entitled to bargain towards a BFA noting that a BFA is a different creature to the justice and equity requirements of Court orders. Further, and within this context, it is not contrary to public policy for the wife to conditionally elect to forego her available remedies where no charge has been laid and no statute bars her contracting out of available remedies. Similarly, the parties negotiated to contract out of s 79 of the Act itself. They also elected to negotiate out of the statutory right of the wife to pursue child support from the husband. Put simply, the very essence of the BFA is one of "contracting out". I find no evidence of the Agreement here being contrary to public policy.
Fifthly, and contrary to the tenor of the submissions of the husband's counsel, I did not detect from a comprehensive reading of the email/text communications between the parties, any sense of urgency on the part of the wife and indeed the wife, on at least one occasion, told the husband directly that she did not want further direct communications or negotiations with him. To the contrary the evidence of the communications suggested that it was the husband who not only disregarded the wife's request for no direct communication, but who showed a sense of urgency toward settlement.
Sixthly, the husband contemporaneously negotiated a Binding Child Support Agreement with the wife, the terms of which were beneficial to him and prima facie contrary to the wife's financial best interests. The husband does not here raise issues of undue influence or unconscionable conduct.
Taking all of the above into account, I am not persuaded that the husband has discharged his onus in proving on the balance of probabilities that he was subject to undue influence in executing the BFA either directly as argued or by presumption.

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Judgment (139 paragraphs)

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Legislation Cited (3)

Cases Cited (4)