plaintiff. The court ordered that the plaintiff (Mrs Grant) was entitled to specific performance of the mediated heads of agreement and to relief giving effect to that settlement, on the grounds that the...
Key principles
A heads of agreement signed at court-mediated settlement which shows the parties intended to be immediately bound falls within the first Masters v Cameron category and is...
A settlement reached at mediation in the Equity Division can be given effect by the court under s 29(1) of the Civil Procedure Act 2005, and the court should give that provision...
Where a party who invoked equitable remedies and agreed a settlement in mediation seeks to rely on a statutory provision (here the Family Law Act) to avoid the settlement, equity...
A heads of agreement that divides existing matrimonial property after breakdown of the marriage is not a s 90C 'financial agreement' (and therefore not subject to the Family Law...
Issues before the court
Whether the heads of agreement executed at mediation was a concluded enforceable agreement or an unenforceable agreement to agree (Masters v Cameron...
Plain English Summary
The parties, elderly spouses, settled at court-mediated mediation and their lawyers signed heads of agreement dividing properties and arranging sales. The wife signed a deed implementing the heads; the husband refused to sign the deed alleging non-disclosure. The court held the heads were immediately binding (first Masters category), were not a s 90C financial agreement or an unenforceable maintenance agreement under the Family Law Act, and that the court could enforce the settlement under s 29(1) Civil Procedure Act and by applying the equitable maxim that a statute cannot be used as a cloak for fraud. The wife was entitled to specific performance. The court therefore ordered relief to give effect to the mediated settlement.
AI-generated legal information, not legal advice. Zoe can make mistakes. Check the cited source, and for advice about your situation consult a qualified Australian lawyer.
Whether the heads of agreement constituted a financial agreement under s 90C of the Family Law Act, thereby invoking the Act's formal requirements...
Whether the heads of agreement was a maintenance agreement within the meaning of s 86A of the Family Law Act, and if so whether that made it...
Whether the Civil Procedure Act 2005 s 29(1) authorises the court to make orders to give effect to agreements arising out of mediation, thereby...
Cited legislation
2 cited instruments linked from this judgment.
Deep Dive
2,137 words · generated 25/06/2026
What happened
The parties, Merle Gwynneth Grant (wife, plaintiff) and Dr Alan Grant (husband, defendant), were elderly spouses who had separated and were litigating competing equitable claims about title and beneficial interests in multiple properties. Dr Grant commenced proceedings in the Equity Division seeking injunctions, declarations and the extension of caveats with respect to various properties (paras 2-5). The matters proceeded to a court-appointed mediation in the Equity Division. Both parties were legally represented. Their solicitors signed a written heads of agreement at mediation on 19 September 2011, recording a negotiated settlement that surrendered certain claims, reconstituted ownership of specified properties as tenants in common in equal shares, provided for severance of joint tenancies and immediate sale of the properties, and contained provisions about costs, liabilities, personal property, the role of agents, and an express clause stating the parties "intend to enter into a deed to reflect this agreement which is in full and final settlement" (paras 6-7, 15, 21-22). The registrar's record confirmed settlement with a deed to follow (para 7).
Mrs Grant executed a deed prepared to reflect the heads. Dr Grant refused to sign that deed. He alleged disentitling conduct by Mrs Grant, pointing in particular to the fact that Mrs Grant had granted a lease to their son over one property, a fact not disclosed at mediation; the lease itself was not before the court (paras 8-11). Correspondence passed between solicitors; Mrs Grant's solicitor asserted vacant possession could be provided to a purchaser and drafted a deed of variation which would ensure vacant possession on settlement, but Dr Grant's solicitors did not agree to that draft (para 10). Mrs Grant applied to the court for relief to give effect to the settlement, seeking specific performance of the heads and orders consistent with the mediated terms.
Gzell J heard the matter and held the heads of agreement were immediately binding, not a financial agreement under s 90C Family Law Act, not an unenforceable maintenance agreement under s 86A, and enforceable either because equity would not allow a statute to be used as a cloak for fraud, or because the court could exercise its power under s 29(1) Civil Procedure Act 2005 to make orders giving effect to agreements arising out of mediation (paras 13-24, 29-38, 41-44, 53-54). The plaintiff was entitled to specific performance and consequential relief (para 54).
Why the court decided this way
Three lines of reasoning support the court’s decision:
Classification under Masters v Cameron, intention to be bound immediately
The court applied the classic Masters v Cameron framework (as set out at para 13) to decide whether the heads were a concluded agreement or merely an agreement to agree. The decisive indicators were textual and contextual. Clause 15 described the arrangement in the present tense as "in full and final settlement", and the document contained detailed operative terms (consent orders, severance, sale mechanics, liabilities sharing and steps to be taken). The judge emphasised that if the parties had intended the heads to be binding only upon a future deed they would have used the future tense (for example "which will be"), but they did not; the present tense indicated the heads themselves were the settlement (paras 21-24). No subsequent conduct suggested a contrary intention. On that basis the heads were categorised in the first Masters class, immediately binding, with a formal document to follow as a restatement rather than a condition precedent, and thus specifically enforceable (paras 13, 22-24).
Statutory formalities of the Family Law Act did not bar enforcement
Dr Grant argued the heads were caught by the Family Law Act regime. The court analysed s 90C (financial agreements) and s 86A (maintenance agreements). A s 90C financial agreement, by its terms, has prospective force and presupposes the marriage subsists at the time of the agreement and contemplates future breakdown; it must also be expressed to be made under s 90C (paras 30-34). Here the marriage had already broken down, the agreement related to division of existing property and had immediate effect, and it was not expressed to be under s 90C; accordingly it was not a s 90C agreement (paras 29-35). Section 86A renders unenforceable maintenance agreements that are not financial agreements; the judge found the heads did not operate as a maintenance agreement in the sense relevant to s 86A such as to negate enforceability (paras 36-38).
Equity and the court's statutory power to enforce mediated settlements
Separately, the court relied on s 29(1) of the Civil Procedure Act 2005 which permits the court to make orders to give effect to agreements or arrangements arising out of mediation (para 41). Given the public policy favouring mediation, the court said s 29(1) should be given wide operation to effect finalisation of disputes and to avoid undermining mediation (paras 41-43). Moreover, the court applied the equitable maxim that equity will not allow a statute to be used as a cloak for fraud. Allowing Dr Grant, who invoked equitable remedies and agreed a mediated settlement, to rely on the Family Law Act’s formalities to escape the settlement would amount to using the statute as a shield to perpetrate an unconscionable result. Equity will intervene in such circumstances (paras 44-48, 53-54). The judge therefore concluded Mrs Grant was entitled to relief either because of the equitable maxim, or because the court could act under s 29(1), or because the parties had agreed the court's jurisdiction would be exercised to give effect to the settlement (para 54).
Before and after state of the law
Before this judgment practitioners applying Masters v Cameron were required to focus on the objective intention of the parties, with the written document and surrounding circumstances being key evidence of that intention (Master v Cameron; cited at para 13). Courts had cautioned against mechanical presumptions and stressed context (Brereton J in Cacace, cited at para 16).
This decision reaffirms that:
A detailed heads signed at court-mediated settlement that describes itself in present tense as "in full and final settlement" and contains operative detail is likely to be characterised as immediately binding (first Masters category), not merely an agreement to agree (paras 21-24).
Agreements settling existing property post-breakdown are not necessarily financial agreements under s 90C (paras 29-35) and thus do not automatically fall within the Family Law Act formalities.
The court will give weight to the Civil Procedure Act s 29(1) power to make orders giving effect to mediation outcomes, supporting enforcement.
Equity continues to prevent parties from evading settlements by invoking statutory formalities where to do so would be unconscionable; the maxim extends beyond the Statute of Frauds context and may apply to statutes like the Family Law Act where invocation would be a cloak for fraud (paras 44-48, 53-54).
Practically, the decision strengthens the enforceability of mediated settlements recorded in written heads executed in court mediation, even in the family/property dispute context, and signals reluctance to allow statutory technicalities to subvert mediated resolutions.
Key passages with plain-English translation
Masters passage (para 13)
Court text: the three Masters categories.
Plain English: Preliminary agreements fall into three types: (1) binding immediately even if a formal contract will be drafted later; (2) binding but performance made conditional on a formal document; (3) not binding until a formal contract is made. The court must decide which category applies based on what the parties objectively intended.
Clause 15 interpretation (paras 21-22)
Court text: the present tense "is in full and final settlement" indicates the heads themselves were the settlement.
Plain English: Because the heads say they are already a full and final settlement, not that they will become one later, the judge treated them as the final agreement the parties intended to be binding at once.
Civil Procedure Act s 29(1) (para 41)
Court text: the court can make orders to give effect to agreements from mediation.
Plain English: The court has statutory power to turn mediated agreements into enforceable court orders; that power should be used to uphold mediation outcomes.
Equitable maxim (paras 44-47, 53)
Court text: equity will not allow a statute to be used as a cloak for fraud; applying this prevented husband using Family Law Act formality to avoid settlement.
Plain English: A party cannot rely on a technical requirement of a law to escape a fair settlement if using that requirement would be unconscionable; the court will use equitable doctrines to stop that.
What fact patterns trigger this precedent
A mediated settlement recorded in written heads of agreement executed at a court-appointed mediation, where the document:
uses present-tense language describing the settlement as “in full and final settlement” or equivalent;
contains specific operative terms (detailed steps for transfers, severance, sale, division of proceeds, liabilities, etc.);
is signed by solicitors on behalf of parties in the context of court mediation;
A subsequent refusal by one party to sign an implementing deed where the refusing party seeks to evade the settlement by invoking statutory formalities (for example, arguing the arrangement is a s 90C financial agreement or a maintenance agreement caught by s 86A);
Instances where any non-disclosure at mediation (e.g. a prior lease) is either remediable by the settlement mechanics (e.g. deed of variation to ensure vacant possession) or is not such that it disentitles a party from enforcing the negotiated settlement;
Cases in which a party initially invoked equitable remedies or litigation and then negotiated a mediated settlement, subsequently attempting to use statutory technicalities to avoid the settlement.
In these circumstances, Grant demonstrates that courts will: (a) scrutinise textual and contextual indicators of immediate intention; (b) resist categorising post-breakdown division agreements as s 90C financial agreements when they lack prospective force; (c) use s 29(1) Civil Procedure Act and equitable maxims to give effect to mediated outcomes.
How later courts have treated it
The judgment itself does not record later appellate treatments or subsequent citations. The decision is a trial-level (Supreme Court of NSW, Equity Division) primary judgment by Gzell J dated 28 June 2012. Practitioners should check subsequent case law and citators to determine how appellate courts or other judges have adopted, distinguished, or criticised its reasoning. The immediate effect of Grant is persuasive authority in New South Wales for enforcement of court-mediated heads of agreement in family-property disputes, but its weight may vary depending on appellate confirmation or contrary authority.
Still-open questions
Appellate treatment and binding precedent: As a NSW Supreme Court single-judge decision, Grant is persuasive but not binding on higher courts. Whether appellate courts will adopt the same approach to the interplay of Masters categories, s 90C, s 86A and the equitable maxim in family-property mediated settlements remains to be tested on appeal or in other reported cases.
Boundary between financial agreements and settlement of existing property: The judgment draws a distinction based on prospective force and timing (agreement made during the marriage addressing future breakdown versus post-breakdown settlement dividing existing property). Close fact patterns could arise where an agreement mixes present disposals and future arrangements; how courts will classify such hybrid agreements may demand further elaboration.
Scope of the equitable maxim vis-a-vis a statutory regime designed to regulate family property: Grant applies the maxim to prevent misuse of the Family Law Act’s formality requirements. Future courts may need to articulate more precisely when reliance on statutory formalities will constitute a 'cloak for fraud', particularly where public policy underlying those statutes (for example, protection in financial agreements) is strong.
Effect of non-disclosure discovered post-mediation: In this case the concealed lease was not treated as disentitling because the wife proposed mechanisms to secure vacant possession; but where non-disclosure is more serious or prejudicial to the essence of the bargain, courts will need to define thresholds for disentitlement and whether those thresholds differ in mediated settlements compared with contractual rescission contexts.
Interaction between s 29(1) Civil Procedure Act and family law jurisdiction: The judgment treats s 29(1) as an independent statutory basis for giving effect to mediated outcomes. How that power interacts with the Family Court’s exclusive or primary jurisdiction under family law statutes and whether state courts will be constrained in other scenarios is a topic for further judicial consideration.
Conclusion: Grant is a practical, text-and-context-focused endorsement of enforcing detailed mediated heads in family property disputes. It underscores the judiciary’s willingness to protect mediation outcomes through contract law, equity, and procedural statutes while resisting tactical invocation of statutory formalities to evade settlements. Practitioners drafting mediated heads should ensure clarity of present-tense settlement language and operative detail; practitioners seeking to resist settlements will face significant hurdles unless they can demonstrate clear evidence of different intentions, serious disentitling conduct, or statutory requirements squarely applying.
Catchwords
(2009) 42 Fam LR 336
Maddison v Alderson (1883) 8 App Cas 467
Frame v Dawson (1807) 14 Ves 386 at 387(1807) 33 ER 569
Nelson v Nelson (1995) 184 CLR 538
Judgment (2 paragraphs)
[1]
Judgment
1The plaintiff, Merle Gwynneth Grant, and the defendant, Alan Grant, are an elderly married couple. Mrs Grant seeks orders to give effect to a settlement agreement reached in mediation.
2Dr Grant brought proceedings against the NSW Registrar General of Lands and Mrs Grant in the Equity Division of this court seeking an injunction restraining the Registrar General from registering any transfer severing joint tenancy on the application of Mrs Grant in respect to three properties. He sought a declaration that Mrs Grant held a portion of her undivided share in the joint tenancy in the properties on trust for him in a percentage to be determined by the court, and a declaration that Mrs Grant held two other properties on trust for him in a percentage to be determined by the court.
3In the alternative, Dr Grant sought orders that the properties be subject to orders under the Family Law Act 1975 (Cth), s 78 and s 79.
4The former section empowers the court to declare the title or rights of the parties to a marriage in property in proceedings between them. The latter section, so far as is relevant, provides as follows:
"(1) In property settlement proceedings, the court may make such order as it considers appropriate:
(a) in the case of proceedings with respect to the property of the parties to the marriage or either of them - altering the interests of the parties to the marriage in the property."
5Dr Grant commenced further proceedings in the Equity Division of this court seeking the extension of caveats over the two properties in Mrs Grant's name, declarations that he was the beneficial owner as joint tenant with Mrs Grant in the two properties or, alternatively, that Mrs Grant held on resulting or constructive trust for him the two properties to an extent to be determined by the court. Alternatively, Dr Grant sought a declaration that he was entitled to, and held, an equitable charge over the two properties to an extent to be determined by the court.
6A mediation took place before a court appointed Registrar. Both parties had legal representation. A settlement agreement was negotiated and signed on behalf of the parties by their legal representatives. It was in the following terms:
"Heads of Agreement
No: 2011/165201
2011/183568
Alan Grant v Merle Gwynneth Grant
(Dr Grant) (Mrs Grant)
The parties agree to compromise this dispute and settle their entitlements to the matrimonial property on a full and final basis in the following manner:
The parties will consent to the following orders:
(a) An order that Dr & Mrs Grant own XX XXXX XX McMahon's Point and XX XXXX XX Killcare as tenants in common in equal shares.
(b) An order that the following joint tenancies be severed:
(i) XX XXXX XX McMahons Point
(ii) XX XXXX XX, Elizabeth Bay
(iii) XX XXXX XX Killcare
and Dr & Mrs Grant own those properties as tenants in common in equal shares.
(c) Proceedings dismissed
(d) Each party bear their own costs.
Once the transfers have been effected, all properties will be sold immediately.
Both Dr & Mrs Grant will each nominate an agent who will each co-list each property for sale subject to an agreement on the ale price between the parties.
Any agent nominated must not be related to the parties.
Once the agent is nominated, only the parties solicitors' will deal with the agent. Neither the parties, nor persons related to the parties, will communicate directly with the agent.
Liabilities incurred in respect of the properties and the sale of the properties (being those properties listed in 1(a) and 1(b)) to be shared equally between the parties and paid from the proceeds of sale of each property.
Each party retain the superannuation entitlements in his or her name.
Each party is entitled to retain any funds invested or held in his or her name.
Each party is entitled to retain any shares held in his or her name. Any shares in joint names are to be sold immediately and the proceeds divided between Dr & Mrs Grant.
Dr Grant is to do all things necessary to resign as the trustee of Mrs Grant's super fund.
Dr & Mrs Grant agree to provide copies of all correspondence in joint names or correspondence relating to the properties to their solicitors.
Dr Grant's solicitor for the purposes of this agreement is David Lalic of Jackson Lalic. Mrs Grant's solicitor for the purpose of this agreement is John Quinn of Lockhardt Quinn.
In the event that stamp duty or other tax is payable to transfer XX XXXX XX McMahons Point and XX XXXX XX Killcare as per clause 1(a), the parties agree:
(1) The properties will remain in Mrs Grant's name.
(2) The caveats will remain on the properties.
(3) The properties will be sold immediately in the same way as provided for above.
(4) The proceeds of sale will be divided equally and liabilities in relation to the properties will be jointly shared.
The parties to keep whatever personal property they have in their possession.
The parties intend to enter into a deed to reflect this agreement which is in full and final settlement not only of these proceedings but of the property accumulated during their marriage. The parties agree that they have no further claim against each other & will provide releases to that effect.
In relation to (3) above, the parties agree that the sale price will be set on the basis of the highest sale price set by the 2 agents. The parties may agree to accept a lower sale price for any particular property through their solicitors...[unreadable]
[2]
DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.
Decision last updated: 29 June 2012
The court ordered that the plaintiff (Mrs Grant) was entitled to specific performance of the mediated heads of agreement and to relief giving effect to that settlement, on the grounds that the heads were immediately binding (Masters first category), enforceable under s 29(1) Civil Procedure Act 2005, and that equity would not allow the Family Law Act to be used as a cloak for fraud (paras 24, 41-44, 53-54).
In the event that Mrs Grant is able to locate:
(a) books at Killcare
(b) a study board
she will return them to Dr Grant.
In the event that Dr Grant is able to locate:
(a) Tansn's sailing trophies
(b) music or music related books
he will return them to Mrs Grant.
[Signature] [Signature]
Counsel for Solicitor for
Mrs Grant Alan Grant
19/9/11 19/9/11
The parties agree to use their best endeavours to draw up deed and enter consent orders on or before 29 September 2011 when the matter is back before the equity registrar.
[Initial] [Initial]"
7The Registrar's (mediator) record of proceedings noted that both matters had settled and that heads of agreement had been executed by both parties in both matters with a deed to follow.
8A deed was drawn and executed by Mrs Grant. Its content was not before the court. Dr Grant refused to execute it. One of his grounds for doing so was an allegation of disentitling conduct on Mrs Grant's part.
9One of the properties to be sold had been occupied by one of their sons as a principal place of business for approximately 40 years. What Dr Grant did not know, and of which he was not informed at the mediation, was that Mrs Grant had granted their son a lease of the premises. The lease was not in evidence.
10Correspondence passed between the solicitors on this issue. Mrs Grant's solicitor said that, if required by a purchaser, vacant possession of the premises would be available and the son would surrender the existing lease. Subsequently, Mrs Grant's solicitor prepared a draft deed of variation of the lease that would ensure vacant possession on settlement of the sale of the property. Agreement to the terms of this document was sought from the solicitors for Dr Grant. It was not provided.
11Dr Grant's solicitors served a notice to admit facts. Amongst other matters it sought admissions with respect to rent payable on jointly owned property. The opportunity was not taken to seek admissions with respect to the ability to obtain vacant possession.
12I reject the contention of disentitling conduct by Mrs Grant. Quite apart from the fact that the property could be sold subject to the tenancy, Dr Grant had his opportunity to ensure vacant possession by agreeing to the variation of lease. There was no challenge to the statement that vacant possession would be given if required by a purchaser. In these circumstances any effect of the non-disclosure was spent and Dr Grant was not excused on that account from executing a deed formalising the heads of agreement.
13In written submissions counsel for Dr Grant did not challenge the proposition that the parties were immediately bound by the heads of agreement as a document falling within the first category in the well known passage from Masters v Cameron (1954) 91 CLR 353 at 360 where the High Court said:
"Where parties who have been in negotiation reach agreement upon terms of a contractual nature and also agree that the matter of their negotiation shall be dealt with by a formal contract, the case may belong to any of three classes. It may be one in which the parties have reached finality in arranging all the terms of their bargain and intend to be immediately bound to the performance of those terms, but at the same time propose to have the terms restated in a form which will be fuller or more precise but not different in effect. Or, secondly, it may be a case in which the parties have completely agreed upon all the terms of their bargain and intend no departure from or addition to that which their agreed terms express or imply, but nevertheless have made performance of one or more of the terms conditional upon the execution of a formal document. Or, thirdly, the case may be one in which the intention of the parties is not to make a concluded bargain at all, unless and until they execute a formal contract."
14At first instance in Baulkham Hills Private Hospital Pty Ltd v GR Securities Pty Ltd (1986) 40 NSWLR 622 at 628, McLelland J suggested that their was a fourth category in which the parties were content to be bound immediately and exclusively by the terms which they had agreed upon whilst expecting to make a further contract in substitution for the first contract, containing, by consent, additional terms.
15In oral submissions, however, counsel for Dr Grant submitted that the heads of agreement was within the third category in Masters.
16In Cacace v Bayside Operations Pty Ltd [2006] NSWSC 572 at [9], Brereton J stated the principles with respect to the determination of which class under Masters a preliminary agreement should be categorised:
"To which of those four classes a preliminary agreement belongs depends essentially on the intention of the contracting parties, objectively ascertained from their acts and statements. In ascertaining that intention, where there is a written document recording the preliminary agreement, that document will often be the starting point. However, the court may, and indeed must when it comes to ascertaining whether or not there was an intention to make a binding contract, have regard also to the factual context and any oral basis on which the preliminary agreement was made: see Branir v Owston Nominees (No 2) Pty Ltd (2001) 117 FCR 424, [272]-[293]. At [293], Allsop J, with whom Drummond and Mansfield JJ agreed, said:
For my part, I think it unwise to express the principle in terms of presumptions. McHugh JA did not do so in State Rail Authority (NSW) v Heath Outdoor. In a sense, a document apparently contractual on its face may lead to the need for some cogent or persuasive evidence to enable a conclusion to be drawn that it was not intended by the parties to embody their bargain. (Or, it may be simply and easily explained.) However, to introduce the notion of presumptions, in my respectful view, risks a mechanical approach to the analysis. The better expression of the principle is reflected in the words of McHugh JA, as consistently applied by the New South Wales Court of Appeal and supported otherwise by courts of appeal in Queensland and South Australia, that the existence of an apparently complete contract is no more than an evidentiary foundation for a conclusion that the agreement is wholly in writing."
17It was submitted that the heads of agreement was incomplete because it did not disclose the lease nor did it deal with an art collection, rental income and personal belongings. It was, therefore, merely an agreement to agree.
18But it did deal with specified personal belongings in clause 17 and clause 18 and provided in clause 14 that the parties should keep other personal belongings in their possession. That dealt with the art collection.
19It does not seem to me that the non-reference to rental income makes the heads of agreement an agreement to agree. It dealt with the physical assets of the parties. The question is whether the parties reached finality and intended to be bound forthwith by the heads of agreement but at the same time they intended that their agreement would be expressed in more precise terms. Alternatively, the question is whether the heads of agreement but an agreement to agree.
20In Cacace the heads of agreement specified that they should take effect from the date of exchange of further agreements incorporating the heads of agreement.
21It was submitted that clause 15 of the heads of agreement in this case was to the same effect.
22I disagree. Clause 15 stated that "[t]he parties intend to enter into a deed to reflect this agreement which is in full and final settlement". The use of the present tense with respect to the settlement can only refer to the heads of agreement. No deed was in existence when the heads of agreement was signed. It could only be the heads of agreement that was in full and final settlement. If it was the intention of the parties that they would only be bound when a deed was executed, future tense was required such as "which will be" in full and final settlement.
23Nothing in the subsequent conduct of the parties detracts from this interpretation of their intention.
24In my judgment the heads of agreement fall within the first category in Masters.
25Dr Grant's principal submission was that the heads of agreement was unenforceable as it did not comply with Part VIIIA of the Family Law Act (Cth).
26Reliance was placed upon the decision of a Full Court of the Family Court in Kostres v Kostres [2009] FamCAFC 22; (2009) 42 Fam LR 336 where a pre-nuptial agreement, designed to oust the jurisdiction of the Family Court, provided for the manner in which property acquired during the marriage would be dealt with in the event that the marriage failed.
27The court referred at [107] to the Family Law Act (Cth) s 79(4) and its mandate that a court determining a claim for property adjustment must have regard to the parties' financial and non-financial contributions to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them. The pre-nuptial agreement did not do that.
28It was submitted that the heads of agreement in the instant litigation was unenforceable because it did not reflect those fundamental statutory concepts of contribution.
29But the heads of agreement deals with a vastly different situation. It does not seek to deal with property acquired, conserved or improved in the future during a marriage. It seeks to settle a dispute by agreement as to the division of existing property after the marriage has broken down.
30If the parties to a marriage execute a proper financial agreement they oust the jurisdiction of a court, whether state or federal, to entertain an application for property adjustment under the Family Law Act (Cth), s 79.
31The term financial agreement is defined in the Family Law Act (Cth), s 4 to include a financial agreement under s 90C of the Act. That provision, so far as is material, is in the following terms:
"(1) If:
(a) the parties to a marriage make a written agreement with respect to any of the matters mentioned in subsection (2); and
...
(b) the agreement is expressed to be made under this section;
the agreement is a financial agreement. ...
(2) The matters referred to in paragraph (1)(a) are the following:
(a) how, in the event of the breakdown of the marriage, all or any of the property or financial resources of either or both of the spouse parties at the time when the agreement is made, or at a later time and during the marriage, is to be dealt with."
32Section 90C(2)(a) applies to an arrangement with prospective force. It presupposes that when the agreement is reached the marriage persists. It provides for the future event of marriage breakdown and the application, then, of the agreement to the property or financial resources of the parties or either of them. The agreement may relate to the property or financial resources of the parties at the time the agreement is entered into or it may relate to property and resources at a later time during the marriage but it has no effect unless and until there is a marriage breakdown.
33That is not the character of the heads of agreement. The marriage had broken down. There was no prospective force in the agreement in relation to other property. The heads of agreement had immediate effect and was not conditional upon the future breakdown of the marriage. It was not a financial agreement.
34Furthermore, the absence of expression in the heads of agreement that it was made under the Family Law Act (Cth), s 90C meant that it was not a financial agreement within the meaning of that provision.
35Section 90G(1) of the Family Law Act (Cth) provides that a financial agreement is binding on the parties to the agreement if and only if certain specified matters are satisfied. But that restriction does not apply to the heads of agreement because it is not a financial agreement for one or other or both of the reasons expressed above.
36The Family Law Act (Cth), s 86A provides that a maintenance agreement that is not a financial agreement does not have any effect and is not enforceable in any way.
37A maintenance agreement is defined widely in the Family Law Act (Cth), s 4(1) as an agreement in writing made between the parties to a marriage that makes provision with respect to financial matters. That term is defined in the same section to mean matters with respect to the maintenance of one of the parties, the property of those parties or either of them, or the maintenance of children of the marriage.
38The heads of agreement does not provide for maintenance but it does make provision with respect to the property of the parties. If it is, therefore, a maintenance agreement it does not have any effect and is not enforceable in any way.
39Counsel for Dr Grant submitted that the court should not make the declarations and orders sought, as they would lack utility.
40It is a strange result if settlements reached at mediations in the Equity Division of this court between the parties to a marriage cannot be enforced.
41The Civil Procedure Act 2005, s 29(1) provides:
"The court may make orders to give effect to any agreement or arrangement arising out of a mediation session."
42It is in the public interest that that provision be given a wide operation. The just, quick and cheap resolution of the real issues in dispute required by s 56(1) of the Civil Procedure Act requires every effort to be made towards the finalisation of legal proceedings. Mediation is an important step in achieving this purpose. It would hamper its operation if each time a settlement agreement was reached at mediation with respect to the property of the parties to a marriage, one of the parties could argue that he or she was not bound by the agreement because of the Family Law Act (Cth).
43When a settlement agreement is reached at mediation there is a lot to be said for the proposition that the parties have agreed that the court's jurisdiction will be exercised by the making of orders giving effect to the settlement.
44Another way of regarding the matter is that equity will not allow a statute to be used as a cloak for fraud.
45Lord Wilberforce described the maxim thus in British Railways Board v Pickin [1974] AC 765 at 795-796:
"The doctrine may well be admitted that equity, when faced with an appeal to a regulatory public statute, which requires compliance with formalities, will not allow such a statute (assumedly passed to prevent fraud) to be used to promote fraud and will do so by imposing a trust or equity upon a legal right."
46The maxim was developed with respect to part performance to overcome the requirement of writing under the Statute of Frauds 1677 (29 Car II c 3) and its modern equivalents. Part performance being unequivocally referable to the contract in question, to the knowledge and benefit of the defendant, it would be fraudulent in the equitable sense for the defendant to rely on the statute (Frame v Dawson (1807) 14 Ves 386 at 387; (1807) 33 ER 569 per Sir William Grant MR):
"It is admitted, that supposing an agreement ever so clearly proved, yet, as a parol agreement, the Plaintiff is not entitled to have it executed. It is necessary therefore to shew a part-performance: that is, an act, unequivocally referring to, and resulting from, the agreement; and such, that the party would suffer an injury, amounting to fraud, by the refusal to execute that agreement."
47Lord Selborne put it differently in Maddison v Alderson (1883) 8 App Cas 467 at 475:
"In a suit founded on such part performance, the defendant is really 'charged' upon the equities resulting from the acts done in execution of the contract, and not (within the meaning of the statute) upon the contract itself. If such equities were excluded, injustice of a kind which the statute cannot be thought to have had in contemplation would follow."
See also Nelson v Nelson (1995) 184 CLR 538; Fitzgerald v FJ Leonhardt Pty Ltd (1997) 189 CLR 215.
48The learned authors of Meagher, Gummow and Lehane's Equity Doctrines & Remedies, 4th ed (2002), Butterworths LexisNexis at [12-105] express the view that the maxim is not confined to the Statute of Frauds, but will apply to any statute that requires observance by the parties of a particular form as a precondition to enforceability at law.
49Fitzgerald was such a case. It was concerned with a provision of the Water Act 1992 (NT) that required a landowner to obtain a bore construction permit under the Act and a provision that made it an offence to construct a bore unless it was authorised.
50In Ash Street Properties Pty Ltd v Pollnow (1987) 9 NSWLR 80, Priestley JA, with whom Samuels JA, agreed dealt with the question whether reliance upon the Stamp Duties Act 1920, s 29 would give rise to a fraud. So far as is material the provision was as follows:
"... no instrument executed in New South Wales, or relating (whersoever executed) to any property situate or to any matter or thing done or to be done in any part of New South Wales, shall, except in criminal proceedings, be pleaded or given in evidence, or admitted to be good, useful or available in law or equity for any purpose whatsoever, unless it is duly stamped in accordance with the law in force at the time when it was first executed."
51His Honour concluded at 100, as was pointed out in Dent v Moore (1919) 26 CLR 316, that there is a public interest of the state to collect revenue and the purpose of the provision of the Stamp Duties Act was to deprive a transaction of effect as a sanction directed to achieving payment of stamp duties.
52While there was no fraud, his Honour (at 101) did not regard it as untoward that the maxim that equity will not allow a statute to be used as a cloak for fraud should be considered in relation to a statute other than the Statute of Frauds.
53Dr Grant might have sought relief in the Family Court. He might have prosecuted his alternative claim under the Family Law Act (Cth), s 79 in these proceedings. Instead he chose to evoke equitable remedies. By agreeing to a settlement of marital disputes ,he gave assurance that the heads of agreement immediately bound him and the court had jurisdiction to perfect that settlement. To raise the statute in defence of Mrs Grant's claim to specific performance is to use it as a cloak for fraud, which the court will not tolerate.
54Mrs Grant is entitled to her relief, either because the maxim that equity will not allow a statute to be used as a cloak for fraud applies, or because the court may act under s 29(1) of the Civil Procedure Act 2005, or because, by agreeing to the settlement at mediation, Dr Grant agreed that the court's jurisdiction would be exercised by the making of orders giving effect to the settlement.