Matech & Matech [2020] FamCA 163 (19 March 2020)

[2020] FamCA 163

FAMILY LAW - PROPERTY - financial agreement - whether agreement is void for uncertainty - whether agreement should be otherwise set aside - agreement found to comply with s 90G of the Family Law Act 1975 - agreement declared to be binding on the parties - further submissions required as to the manner of enforcement

Family Law Act 1975 (Cth), ss. 90K, 90KA, 90G

Matech & Matech [2018] FCCA 270

Matech & Matech (No. 2) [2018] FamCA 1029

Garvey & Jess [2017] FamCA 783

Jess & Garvey [2018] FamCAFC 44

(1) That pursuant to s 90G of the Family Law Act 1975, the financial agreement dated 26 July 2005 is binding on the parties.

(2) That these proceedings be adjourned for further submissions and directions at 9.30am on 25 March 2020 in the Family Court of Australia at Brisbane.

(3) That all parties have leave to appear by telephone on 25 March 2020.

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 Matech & Matech 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).

1. The proceedings between the Applicant Ms Matech (hereafter called "the wife") and Mr Matech (hereafter called "the husband") have been ongoing since 2018 and relate to a financial agreement between the parties dated 26 July 2005 ("the said financial agreement"). The past Court events have been the subject of two published decisions (see Matech & Matech [2018] FCCA 270; Matech & Matech (No. 2) [2018] FamCA 1029), and I rely on the background set out in those reasons without restating them.
2. The issue which was the subject of the hearing on 12 September 2019 included the following discrete issues:

1. Whether the Court finds that the said financial agreement should be set aside; 2. If the said financial agreement is not set aside is it binding on the parties; and

1. If found to be binding, then how should it be enforced.
2. Before dealing with these issues separately, it is proper to record that at the hearing Mr Matech did not have any legal representation. He has, during the currency of the proceedings, at different times, retained different lawyers. Whilst the husband is a very experienced developer who is articulate and respectful to the Court process, many of the legal nuisances which arose in this case seemed, frankly, to be not readily comprehended by him. I attempted, as required by authority, to ensure he was aware of the issues to be decided and explained the effect of his election not to cross-examine the wife, as he was entitled to do. At least he had previously engaged lawyers to assist him to prepare an Affidavit and some "pleadings" as directed. However, he was not able to fully respond to the oral and written submissions of experienced Counsel for the wife, Mr Hackett.

1. I regard it as helpful to identify the material relied upon:
   1. Applicant wife (and filing dates):
      1. Initiating Application filed 6 March 2018;
      2. Amended Application in a Case filed 28 March 2019;
      3. Amended Statement of Claim filed 18 March 2019;
      4. Affidavit of the wife filed 26 April 2019; and
      5. Tender bundle to the Affidavit of the wife filed 26 April 2019 (Exhibit 2).

It is noted that a number of earlier filed documents are referred to in the Affidavit of the wife.

1. Respondent husband (and filing dates):
   1. Further amended Response filed 15 February;
   2. Amended Defence filed 13 May 2019;
   3. Notice to Admit Fasts filed 8 May 2019;
   4. Affidavit of the husband filed 26 April 2019; and
   5. Tender bundle to the Affidavit of the husband filed 26 April 2019 (Exhibit 5).

1. Although the husband sought to rely upon Affidavits of Ms K and Mr L, relating to the whereabouts of solicitor Ms M, those Affidavits were ruled to be irrelevant to the issue being determined. The husband did rely on the "List of Cases and Contentions as to Law", prepared by his Counsel at the time and filed on 16 May 2019.
2. The Application was originally set down for hearing on 16 May 2029, however after a day filled with negotiations, the Court was informed the parties had resolved the matter. The matter was adjourned with the parties' consent to allow terms of settlement to be filed. However, when terms were not filed, the matter was re-listed.
3. By way of further background, and consistent with earlier Orders made permitting the wife, as Trustee for the husband, to sell a property that was unencumbered and solely registered in the husband's name, a settlement of a contract of sale of the property, executed by the wife on 25 May 2019 for the property at G Street, Suburb H, was imminent. The husband, at the hearing on 12 September 2019, sought by Application to restrain the wife from effecting the settlement. For reasons delivered orally, the Court made Orders on 12 September 2019 that, inter alia:

1. dismissed the husband's application seeking to prevent the sale; and 2. authorised the wife to complete the sale;

1. the nett proceeds of sale be retained in trust pending determination of these applications; and

1. adjourned other pending application for contempt (filed 28 March 2019); to join the husband's children as parties (filed 28 March 2019) and for further injunctive relief (filed 28 March 2019), to a date to be fixed.

1. As earlier noted, the wife was not required by the husband for cross-examination. The husband was briefly cross-examined, and falling from that examination, the husband said that:
   1. by reference to paragraph 32 of the wife's Affidavit filed 6 March 2018 and his reply Affidavit of 28 March 2018 (paragraph 31), the husband confirmed he accepted that there was a financial agreement however maintained his response that "however, what she doesn't state is that it all changed when I became bankrupt in 2012";
   2. his Affidavit filed 1 May 2018 was prepared by his solicitor at the time on his instructions and although he says he has found some "diary notes", the facts as he swore them to be true at the time were correct, namely:

"31. Leaving aside the fact that I simply do not have the funds available to make such a payment, [Ms Matech] and I are parties to a s90B financial agreement, entered into on 26 July 2005.

1. My understanding is that such an agreement effectively 'ousts' the jurisdiction of the Court to make any property adjustment Orders unless and until the financial agreement is set aside.
2. As at the date of swearing this affidavit the financial agreement has not been set aside, nor have [Ms Matech] and I entered into a termination agreement.
3. I am not aware of any technical defect with the document itself or otherwise which would render the agreement void, or voidable, or any conduct at the time the agreement was entered into which would place the binding nature of the agreement into question."

1. As his new solicitors, when retained, asserted that "the property schedule(s) outlining the parties property interests were not in existence at the time of the independent legal advice (of either party) and were not annexed to the Financial Agreement at the time of execution, but at some later time" - the husband was examined about the underlying facts to support this contention. The husband said that:
   1. page 79 of his tender bundle (Exhibit 5) is a document (titled "Schedule 1") which he had prepared and revealed the nett assets in the "[Matech Group of Companies]" to be $26,945,500 at the time;
   2. the document was prepared by him on or about 30 May 2005; and
   3. the document was faxed to his solicitors T Lawyers a month before the said financial agreement was signed.

1. On 9 April 2018 he accepts he received a draft separation agreement and minutes of consent orders. He said he signed the minutes of consent orders (acknowledged by all parties as not having been signed by the wife or presented to the Court to be made) on 9 December 2017 - as is apparent from pages 46 to 79 of the wife's tender bundle (Exhibit 2), being a signed Application for Consent Orders with the orders attached.

SHOULD THE SAID FINANCIAL AGREEMENT BE SET ASIDE?

1. It is uncontentious that there is a financial agreement entered into by the parties on 26 July 2005. Although the wife submits (see paragraph 21) that the Court has found the terms of the said financial agreement "are certain, they are clear, precise and the intent of the parties is clear", the earlier findings made at paragraph 6 and 7 of my Reasons delivered orally on 3 April 2018 (see Matech & Matech [2018] FCCA 270) were made in the context of being in the absence of the husband, but with at least his Affidavit filed 28 March 2018 before me. Paragraphs 6 and 7 set out some terms of the said financial agreement, which is clear on the terms of the agreement.
2. The said financial agreement is a contract and as such the normal rules of construction apply. It is an agreement which deals with the property of the parties and possible future alteration of property interests - with the clear intention that, if it is a binding financial agreement (complying with the requirements of the statute), it ousts either wholly or partly the Court's jurisdiction under s 79 of the Family Law Act 1975 ("the Act").
3. Section 90K(i) of the Act provides:

"(1) A court may make an order setting aside a financial agreement or a termination agreement if, and only if, the court is satisfied that:

(a) the agreement was obtained by fraud (including non-disclosure of a material matter); or

(aa) a party to the agreement entered into the agreement:

(i) for the purpose, or for purposes that included the purpose, of defrauding or defeating a creditor or creditors of the party; or

(ii) with reckless disregard of the interests of a creditor or creditors of the party; or

(ab) a party (the agreement party ) to the agreement entered into the agreement:

(i) for the purpose, or for purposes that included the purpose, of defrauding another person who is a

1. Further, and relevantly, s 90KA of the Act provides:

"The question whether a financial agreement or a termination agreement is valid, enforceable or effective is to be determined by the court according to the principles of law and equity that are applicable in determining the validity, enforceability and effect of contracts and purported contracts, and, in proceedings relating to such an agreement, the court:

(a) subject to paragraph (b), has the same powers, may grant the same remedies and must have the same regard to the rights of third parties as the High Court has, may grant and is required to have in proceedings in connection with contracts or purported contracts, being proceedings in which the High Court has original jurisdiction; and

(b) has power to make an order for the payment, by a party

"Doing the best that we can, given the nature of the Husband's pleadings, it appears the Husband contends that the financial agreement should be set aside on the following grounds:-

1. Void for uncertainty (s 90K(1)(b) of the Act); and
2. In the circumstances that have arisen since the agreement was made it is impracticable for the agreement or a part of the agreement to be carried out (s 90K(1)(c) of the Act)"

1. At the hearing, and without legal representation, the husband found it difficult to engage meaningfully with this legal issue - save to continue to assert that his deteriorating financial situation, he says, prevents him from complying with the terms of the agreement. He said he relied on the written submissions filed by his Counsel on 16 May 2019, but did not really understand what they meant. The submission as to setting aside the agreement is brief, and contends that:

"The Husband's evidence (unchallenged in the Wife's evidence) is that the Financial Agreement signed by each of the parties did not contain the schedules of property that are now annexed to the Financial Agreement. This is corroborated by the evidence of his solicitors, [Ms M and Mr L of T Lawyers]. The Wife leads no evidence from her solicitor at the time, [Ms S]."

1. In reliance on this assertion (noting it was made on 16 May 2019 before the evidence of the husband coming from his cross-examination), it is merely submitted that:
   • - "the Financial Agreement is void for uncertainty as to its terms"; and further
   • - it is impracticable for the Financial Agreement to be carried out", because after the husband's bankruptcy, the parties significantly altered their property interests and the manner in which the entities were held; and
   • - significantly, the principal place of residence as set out in clause 12.1(b)(i)(B) of the financial agreement was transferred to a trust and the indebtedness increased.
2. I agree with the submissions of the wife as to the asserted grounds for seeking to set aside the financial agreement. I am not satisfied, being generous to the husband's pleadings, that he seeks to rely upon s 90K(1)(e) - namely that a party to the agreement engaged in conduct that was, in all the circumstances, unconscionable.
3. In that last respect, at paragraph 35 of his trial Affidavit, the husband refers to the document he prepared and sent to his solicitor on 28 June 2005 and says now:

"35. That schedule does not represent my personal assets and liabilities as at the time the Agreement was entered into."

1. Whilst I deal below with the contention about the schedule being available at the time of execution of the said financial agreement, I agree with the wife's submissions that to the extent the husband may be relying upon a misrepresentation as to his true asset position at the time of the agreement, the husband:

1. failed to properly plead that allegation and should be precluded from departing from his pleadings; 2. prepared the schedule, instructed his solicitors it was accurate, and if there was a misrepresentation, then it was the husband who made it; and

1. there is no evidence that the wife claims, or was induced, to enter into the financial agreement by the now asserted misrepresentation by the husband.
2. I accept the submission of the wife (at paragraph 27) that:

"It is absurdity in the extreme for the Husband to contend that he induced himself and therefore the agreement should be set aside."

IS THE SAID FINANCIAL AGREEMENT VOID FOR UNCERTAINTY?

1. Although the husband says his evidence in his Affidavit was "corroborated by the evidence of his solicitors":
   1. Mr L merely provided his firm's file. He did not given any substantive evidence; and
   2. there is no evidence from the husband's solicitor Ms M; as she cannot be found.
2. I have considered the documents at pages 39 to 78 of the husband's tender bundle (Exhibit 5), in light of the signed financial agreements offered as evidence (pages 1 to 38 of the husband's tender bundle), and they are in identical terms and both contain the same schedule, which the husband says he prepared and sent to his solicitors a month before the agreement was signed.
3. The three diary notes from the file of T Lawyers for 26 July 2005 do not have any indication as to:

1. when the telephone call between the husband and his solicitor took place, where the husband is recorded as saying "the document was not in final form ready for [Ms Matech] to sign"; 2. if the telephone call between the solicitors at 10.45am took place before the husband's call above to his solicitor. To that end, the diary note says that "the agreement that I sent through to her yesterday had all of the schedules on the one page and I asked whether she needed me to email her another copy if she was signing up the document today";

1. when the husband attended at 2.00pm to sign the agreement, the agreement had been signed by the wife. The husband is recorded as saying to his solicitor that "[Ms S] did not have the schedule of his assets on hand to provide for the agreements and I said that was fine, I could insert those".
2. It is clear that the Court has not been provided with the full file of the husband's solicitors. By way of example, apart from the letter of 25 July 2005 (page 39 of the husband's tender bundle) providing to the wife's solicitors "an amended copy of the draft Binding Financial Agreement", no other correspondence is produced - e.g. sending from one solicitor to the other, the signed agreement by their solicitor.
3. At paragraph 16 of her trial Affidavit, the wife says she entered into the financial agreement set out in her tender bundle. The agreement attaches the schedule of the husband's interests, as he represented them to be, and further are referred to as "[Mr Matech's] separate property" at clause 2.2 and in Recital 4, which the wife at paragraph 19 of her Affidavit says was true.
4. In the circumstances, on all the evidence, the husband has failed to discharge the evidentiary onus, that when the wife signed the said financial agreement and obtained the independent legal advice that Schedule 1 (being his assets) was not include in the said financial agreement.
5. This being the only basis pleaded for asserting the financial agreement was "void for uncertainty", the husband's claim cannot be sustained.

IMPRACTICABLE TO CARRY OUT (S 90K(1)(C))

1. It is common ground that under the terms of the said financial agreement the husband at the time was the sole legal owner of the property at B Street, Suburb N - the property accepted to have been "the principal place of residence of [Mr Matech] and [Ms Matech] as at the date of separation" as defined in clause 12.1(b)(i)(B) of the said financial agreement. In that respect, the clause provides for Mr Matech to transfer "or cause to be transferred" to Ms Matech the principal place of residence within 30 days of separation. The date of separation was 10 December 2017.
2. This is one of the provisions the wife seeks to enforce.
3. It is not disputed that at the time of the said financial agreement, the husband's interest in the property was encumbered. It is also not contentious that in August 2007 the property was transferred by the husband personally to F Pty Ltd as Trustee of the Ms Matech Trust created 2 May 2007. The husband is shown as the Principal of the Trust whilst the husband and the wife are named as the primary beneficiaries (see Trust Deed at pages 91 to 126 of Exhibit 5).
4. The said financial agreement further provides the following provisions for the wife upon separation:
   1. A motor vehicle, with the husband to pay the motor vehicle lease instalments (clause 12.1(a));
   2. A cash payment calculated by the formula:

"length of marriage in years x $100,000" (clause 12.1(d)), payable within 90 days of the date of separation.

It is common ground the parties were married in 2005 (some five days after the said financial agreement was entered into), and subsisted for over 12 years, meaning a payment of $1,200,000 is due to the wife.

1. Nowhere in these proceedings has the husband taken issue with the calculation of the wife's entitlements under clause 12.1(d) - save to say the said financial agreement should be set aside.
2. At the hearing, Exhibit 3 was tendered by the wife, being a letter from R Services dated 6 September 2019 which reveals the repossessed motor vehicle realised a nett sale amount of $14,973 against a total liability of approximately $34,882.48. The "borrower" is shown to be F Pty Ltd as Trustee for the Ms Matech Trust.
3. Furthermore, Exhibit 4 was tendered by the wife, being a copy of a Supreme Court claim instituted by P Bank against F Pty Ltd and the wife and the husband, seeking recovery of possession of B Street and the sum of $2,259,458 for the outstanding debt and interest.
4. Although the husband asserts that his financial position is precarious, and whilst further investigations are likely to be required in this regard if the said financial agreement is found to be binding, much of the husband's Affidavit in respect of current financial interests was not relevant to whether the terms of the said financial agreement are impractical to carry out.
5. As earlier recorded, the said financial agreement simply provided for the wife to receive the former matrimonial home, her car and a cash sum.
6. The husband did not clearly particularise the grounds upon which he claims that it is impractical to carry out the said financial agreement. Impracticability does not equate to difficulty. The husband has asserted his financial affairs are complex and are accumulated in a network of interlocking corporate or trust entities which, he says, are controlled by family or have little equity. However, the husband has not established that the terms of the agreement are impracticable and I reject this ground to set aside the said financial agreement.

1. It follows from authority that if the said financial agreement is not set aside, then it is still a matter for the Court's determination as to whether this financial agreement is a binding financial agreement within the strict requirements of s 90G(1) of the Act, which provides:

"(1) Subject to subsection (1A), a financial agreement is binding on the parties to the agreement if, and only if:

(b) before signing the agreement, each spouse party was provided with independent legal advice from a legal practitioner about the effect of the agreement on the rights of that party and about the advantages and disadvantages, at the time that the advice was provided, to that party of making the agreement; and

(c) either before or after signing the agreement, each spouse party was provided with a signed statement by the legal practitioner stating that the advice referred to in paragraph (b) was provided to that party(whether or not the statement is annexed to the agreement); and

(ca) a copy of the statement referred to in paragraph (c) that was provided to a spouse party is given to the other spouse party or to a legal practitioner for the other spouse party; and

(d) the agreement has not been terminated and has not been set aside by a court."

1. I am satisfied on the evidence, not seriously challenged in this case, that:

1. the said financial agreement was signed by the husband and the wife; 2. before signing the said financial agreement, each party was provided with independent legal advice from a legal practitioner as to the effect of the said financial agreement and their rights;

1. a signed statement was provided by Mr L to the husband and by Ms S to the wife as required by s 90G(c); and

1. the said statements were incorporated in the signed said financial agreement which satisfies s 90G(1)(ca).
2. I will therefore declare, pursuant to s 90G(1B) of the Act, that the said financial agreement dated 26 July 2005 is binding on the parties to the said financial agreement.

1. I am not strictly required to make a finding about this contention and where, in final submissions, the husband was unable to articulate any submission in support of the broad assertion made in the written submissions by his then Counsel that:

"Estoppel can not be raised in respect of non-compliance with section 90G"

I choose only to make a brief observation.

1. Counsel for the wife, at paragraphs 29 to 32 contends that the husband is "estopped from challenging the financial agreement because earlier in the proceedings he contended that it was binding and enforceable". The particulars supporting this contention can be found in paragraphs 11 to 15 of the wife's statement of claim, being as follows:

"11. The Respondent signed a termination agreement on 9 December 2017.

1. The Applicant and or the Respondent made a Separation Declaration within the meaning of Section 90DA of the Act by no later than 9 April 2018.
2. In the premises, the Agreement is a financial agreement which is binding upon the Applicant and Respondent pursuant to s 90G of the Act.
3. On 19 July 2018 the Respondent made application to this Court contending as to a lack of jurisdiction on the basis that he Agreement was binding and enforceable but that any obligation by the Respondent to the Applicant pursuant to the Agreement was discharged by his bankruptcy on ... 2012.
4. In the premises of paragraphs 11 and 14 above, the Respondent is estopped from denying that the Agreement is a financial agreement which is binding upon the Applicant and Respondent pursuant to s 90G of the Act."
5. Whilst at paragraphs 11 to 15 of the amended Defence filed 13 May 2019 the husband took issue with the statements of the wife, no argument was advanced by the husband in support of the defence.
6. I was directed by Counsel for the wife to the decision of Carew J in Garvey & Jess [2017] FamCA 783 and the subsequent Reasons delivered by the Full Court in dismissing the appeal against Orders of the primary Judge (see Jess & Garvey [2018] FamCAFC 44). I regard the facts in Jess & Garvey (supra) as distinguishable from the facts in this case - such that adoption of the principle found in that case to exist - namely (at [73]) that the wife's position "is unreasonable in the Anshun sense and amounts to an abuse of process" - is not readily available.

1. Having now determined that the said financial agreement is binding, and where the wife seeks to enforce the said financial agreement, I have determined that I should take further submissions at 9.30am on 25 March 2020 as to the further orders by way of enforcement considering:

1. at the hearing on 12 September 2019, a sale of the G Street, Suburb H property was imminent. The Court should now be in a position to receive evidence that settlement was effected and what funds are now available and where those funds are; 2. at the hearing, Mr Hackett for the wife pressed for the wife to obtain some of the orders set out in the amended Application in a Case filed 28 March 2019, but in particular for the sum of $211,000 to be paid to the wife's solicitors either by way of an interim costs order or by way of enforcement for costs Orders made for the hearings on 3 April 2018, 16 May 2018, 7 December 2018, 19 February 2019, 25 March 2019, 6 May 2019 and 12 September 2019;

1. the husband really did not engage with this issue, merely indicating he had other creditors who should be paid before the wife or her solicitors;

1. subsequent to the hearing, further material has been filed, but I have not read this material or considered it, although I intend to do so after delivery of these Reasons in preparation for the Case Management Hearing now set for 9.30am on 25 March 2020, namely: 1. amended Application in a Case filed 27 September 2019 by the husband; 2. Affidavit by the husband filed 19 September 2019 (x 2) and 27 September 2019; 3. Affidavit by Mr Q filed 9 December 2019; and 4. Application in a Case filed 2 March 2020 by the wife.
2. No application was made to re-list this matter for the purpose of re-opening the hearing on 12 September 2019 whilst judgment was reserved.
3. I note however that the wife has filed an application on 2 March 2020 seeking that her contempt application filed 28 March 2019 be urgently listed for hearing.
4. The contempt application will also be listed for further directions at 9.30am on 25 March 2020.

I certify that the preceding forty-nine (49) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Baumann delivered on 19 March 2020.