//
© 2026 Zoe. All rights reserved.
Zoe is a legal information platform. Always consult the Federal Register of Legislation for authoritative text.
[2019] VSC 375
Supreme Court of Victoria
2019-06-07
Osborn JA
Original judgment source is linked above.
PROFESSIONAL NEGLIGENCE - Claim against solicitor arising out of financial agreement between parties purportedly in a de facto relationship - Family Law Act 1975 (Cth) - Financial agreement allegedly defective by reason of s 90UC - Limitation defence with respect to consequential losses claimed - Threshold fact of continuing de facto relationship not established - Discussion of claim for loss of opportunity if primary conclusion wrong - Family Law Act 1975 (Cth) pt VIIIAB - Wrongs Act 1958 -
1 On 9 October 2009 the Plaintiff ('Ms Orwin') engaged the First Defendant ('Mr Rickards') to advise her and prepare a binding financial agreement between herself and her former de facto partner ('Mr Sarah'). Ms Orwin's instructions to Mr Rickards were that although she and Mr Sarah lived in the same premises at 1 Murchison Street, East St Kilda, they were not in a de facto relationship. On 22 December 2009, Mr Rickards briefed the Second Defendant ('Ms Ilias') to advise on a proposed agreement and forwarded a draft to her. Ms Ilias provided advice to Mr Rickards that day and a marked-up version of the proposed agreement by fax the following day.
2 An agreement ('the financial agreement') was subsequently signed by Ms Orwin and Mr Sarah on 12 March 2010. By then, and upon the instructions of Ms Orwin and Mr Sarah, the financial agreement had been amended to include an acknowledgement that the parties were still in a de facto relationship. Certificates annexed to the financial agreement recorded that Ms Orwin had received independent legal advice from Mr Rickards and Mr Sarah had received independent legal advice from the Third Defendant, a solicitor ('Mr Connor').
3 It was a matter of contention during the trial as to whether the parties were still in a de facto relationship at the date of the financial agreement or whether the relationship had in fact ended some years earlier. In any event Ms Orwin and Mr Sarah separated completely in 2011 and, in March 2015, Mr Sarah brought an application in the Federal Circuit Court of Australia ('FCC') seeking to set aside the financial agreement on grounds of non-disclosure, duress, undue influence and unconscionable conduct and seeking an order for the just and equitable alteration of property interests.
4 In the first instance Ms Orwin resisted this application on the basis that it was out of time. But Mr Sarah was successful in obtaining an extension of time, and in the course of interlocutory proceedings[1] counsel for Ms Orwin conceded that the financial agreement was invalid as, on its face, it had not been drafted in accordance with the correct legislation.
5 On 1 March 2009 Part VIIIAB of the Family Law Act 1975 (Cth) ('the FLA') 'Financial Matters in Relation to De Facto Relationships' had commenced with the effect that from that date financial agreements between de facto partners were governed exclusively by the FLA and not the Relationships Act 2008, except in the case of de facto relationships that had ended before 1 March 2009.
6 Following the commencement of a trial on the merits a sum of $550,000 was paid to Mr Sarah by Ms Orwin to settle the family law proceeding together with the forgiveness of $22,470 owing by Mr Sarah to Mr Orwin in respect of the legal costs of other proceedings.
7 In this proceeding Ms Orwin claims damages for breach of duty of care[2] in relation to the preparation and finalisation of the financial agreement by Mr Rickards. She alleges that she retained Mr Rickards to prepare an agreement which would be valid, binding and enforceable in the event that the relationship came to an end and which would protect her assets and the assets she expected to inherit under her mother's will from any claim brought by Mr Sarah. Had she obtained such an agreement, she claims she would not have been required to pay the settlement sum or her legal costs in the family law proceeding. She also claims Mr Rickards' fees and other legal costs. Alternatively, Ms Orwin alleges that as a result of Mr Rickards' breach of duty of care she lost the opportunity to rely on a properly drawn agreement.
8 Mr Rickards says that, save that the financial agreement was expressed to be made under the Relationships Act 2008, it otherwise complied with the requirements of the FLA. He further contends that a valid Part VIIIAB agreement would not have been an effective or complete bar to family law proceedings brought by Mr Sarah, first, because Ms Orwin and Mr Sarah were not in a de facto relationship at the date of the financial agreement; second, because it is probable that such an agreement would have been set aside on one of the grounds advanced by Mr Sarah to impugn it in the FCC; and, third, because the financial agreement could not have extended to a subsequent inheritance from Ms Orwin's mother. He further contends that in any event Ms Orwin would have paid legal fees in a jurisdiction where parties ordinarily bear their own costs.
9 If he is found to be liable, Mr Rickards further says that Ms Ilias and Mr Connor are concurrent wrongdoers within the meaning of s 24AH of the Wrongs Act 1958 and seeks to limit his liability for damages to an amount reflecting his proportion of the wrongdoing.
10 In response to Mr Rickards' proportionate liability defence Ms Orwin brought a separate claim against Ms Ilias. On the second day of trial Ms Orwin withdrew that claim with the leave of the Court. No claim was made by Ms Orwin against Mr Connor.
11 Mr Rickards also alleges that Ms Orwin is a concurrent wrongdoer, and any liability of Mr Rickards should be reduced for her contributory negligence.
12 Further and in the alternative Mr Rickards says Ms Orwin's claim is statute barred by operation of s 5(1)(a) of the Limitation of Actions Act 1958.
13 For the reasons set out below I have come to the following conclusions:
(a) Ms Orwin's claim is statute barred.
(b) The financial agreement into which Ms Orwin and Mr Sarah entered was not an effective agreement made in accordance with s 90UC of the FLA with respect to the rights of the parties upon the termination of a de facto relationship.
(c) I am not satisfied on the evidence that a de facto relationship was continuing at the date the financial agreement was made and accordingly Ms Orwin has not established that s 90UC governed her situation at that date. In turn the threshold premise of the claim for breach of duty of care is not made out. Any failure by Mr Rickards to draft an agreement which took effect pursuant to s 90UC did not cause Ms Orwin damage because s 90UC did not in fact govern her situation. I shall refer to the question of whether the de facto relationship was on foot at the date of the financial agreement as 'the threshold factual issue'.
(d) If (but only if) I am wrong in my primary conclusion with respect to the threshold factual issue, then Ms Orwin suffered damage as a result of the breach of Mr Rickards' duty of care, constituted by the fees paid to Mr Rickards by Ms Orwin and the loss of the opportunity to rely on an agreement protecting her interests in accordance with s 90UC.
(e) Assuming Ms Orwin was in a continuing relationship generally of the kind described by her in evidence the opportunity lost was of some substantial value. Whilst a hypothetical agreement taking effect in accordance with s 90UC would not have prevented Ms Orwin from suffering loss in respect of fees incurred in collateral caveat removal proceedings against Mr Sarah, nor in respect of legal costs in potential family law proceedings, it would have constituted at least a potential partial bar to property alteration proceedings of the type which were settled in the FCC in the sum of $572,470.
(f) The loss of chance in this respect fell to be discounted for the following factors:
• The risk Mr Sarah would not have signed the hypothetical agreement;
• The risk that the hypothetical agreement would have been set aside on the basis of a material non-disclosure of assets by Ms Orwin;
• The risk that the hypothetical agreement would have been set aside as unconscionable for the reasons advanced by Mr Sarah in the FCC; and
• The risk that Mr Sarah would in any event have succeeded in a claim with respect to property of Ms Orwin inherited from her mother after the de facto relationship ended and which could not be the subject of protection under a s 90UC agreement.
(g) Mr Rickards contended that the loss of chance should also be discounted to reflect a risk that the hypothetical financial agreement would have been set aside because Mr Sarah did not receive independent advice. I am not satisfied the evidence establishes that this risk was real.
(h) Likewise if I am wrong in my primary conclusion as to the threshold factual issue, insofar as Mr Rickards raises defences of proportionate liability I am not satisfied the evidence establishes negligence either on the part of Ms Ilias or Mr Connor.
(i) Conversely (again assuming I am wrong in my primary conclusion on the threshold factual issue) given that Ms Orwin was a practising barrister holding both undergraduate and Masters degrees in law, I am satisfied that there was some contributory negligence on Ms Orwin's part in entering into the financial agreement.
14 In consequence of either of my conclusions concerning the limitation issue or the threshold factual issue Ms Orwin's claim must fail. Accordingly I will deal first with the statutory context in which the claim for breach of duty is formulated, the alleged defective nature of the financial agreement when considered in this context, the limitation issue, and the threshold factual issue.
15 I will then for the sake of completeness address the further contentions of the parties on the assumption that my primary conclusions are not correct.
Part VIIIAB of the Family Law Act
16 Part VIIIAB of the FLA governs financial matters relating to de facto relationships. A de facto relationship is defined by s 4AA of the FLA in terms which it will be necessary to examine in due course.
17 The legislative scheme with respect to the making of effective financial agreements under the FLA operates in a similar way with respect to marriages and de facto relationships. Accordingly the authorities relating to matrimonial causes inform the understanding of the provisions with respect to de facto financial causes.
18 Division 2 of Part VIIIAB provides for orders with respect to maintenance, declarations of property interest and alterations of property relations as between parties to de facto relationships. Section 90SA(1) provides:
(1) This Division does not apply to any of the following matters to which a Part VIIIAB financial agreement that is binding on the parties to the financial agreement applies:
(a) the maintenance of one of the spouse parties;
(b) the property of the spouse parties or of either of them;
(c) the financial resources of the spouse parties or of either of them.[3]
19 Section 90SA(3) further provides:
(3) Despite subsection (1), a party to a de facto relationship is not prevented from bringing property settlement proceedings under this Part if a Part VIIIAB financial agreement is not binding on that party.
20 Section 90SL provides for declarations as to property interests:
(1) In proceedings between the parties to a de facto relationship:
(a) after the breakdown of the de facto relationship; and
(b) with respect to existing title or rights in respect of property;
the court may declare the title or rights, if any, that a party has in respect of the property.
(2) If a court makes a declaration under subsection (1), it may make consequential orders to give effect to the declaration, including orders as to sale or partition and interim or permanent orders as to possession.
21 Section 90SM provides for alteration of property interests:[4]
(1) In property settlement proceedings after the breakdown of a de facto relationship, 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 de facto relationship or either of them - altering the interests of the parties to the de facto relationship in the property; or
(b) in the case of proceedings with respect to the vested bankruptcy property in relation to a bankrupt party to the de facto relationship - altering the interests of the bankruptcy trustee in the vested bankruptcy property;
including:
(c) an order for a settlement of property in substitution for any interest in the property; and
(d) an order requiring:
(i) either or both of the parties to the de facto relationship; or
(ii) the relevant bankruptcy trustee (if any);
to make, for the benefit of either or both of the parties to the de facto relationship or a child of the de facto relationship, such settlement or transfer of property as the court determines.
...
(3) The court must not make an order under this section unless it is satisfied that, in all the circumstances, it is just and equitable to make the order.
(4) In considering what order (if any) should be made under this section in property settlement proceedings, the court must take into account:
(a) the financial contribution made directly or indirectly by or on behalf of a party to the de facto relationship, or a child of the de facto relationship:
(i) to the acquisition, conservation or improvement of any of the property of the parties to the de facto relationship or either of them; or
(ii) otherwise in relation to any of that lastmentioned property;
whether or not that lastmentioned property has, since the making of the contribution, ceased to be the property of the parties to the de facto relationship or either of them; and
(b) the contribution (other than a financial contribution) made directly or indirectly by or on behalf of a party to the de facto relationship, or a child of the de facto relationship:
(i) to the acquisition, conservation or improvement of any of the property of the parties to the de facto relationship or either of them; or
(ii) otherwise in relation to any of that lastmentioned property;
whether or not that lastmentioned property has, since the making of the contribution, ceased to be the property of the parties to the de facto relationship or either of them; and
(c) the contribution made by a party to the de facto relationship to the welfare of the family constituted by the parties to the de facto relationship and any children of the de facto relationship, including any contribution made in the capacity of homemaker or parent; and
(d) the effect of any proposed order upon the earning capacity of either party to the de facto relationship; and
(e) the matters referred to in subsection 90SF(3)[5] so far as they are relevant; and
(f) any other order made under this Act affecting a party to the de facto relationship or a child of the de facto relationship; and
(g) any child support under the Child Support (Assessment) Act 1989 that a party to the de facto relationship has provided, is to provide, or might be liable to provide in the future, for a child of the de facto relationship.
22 By reason of s 90SA a Part VIIIAB financial agreement may constitute a complete or partial bar to orders that might otherwise be made under s 90SM.
23 In the present case Ms Orwin asserts that Mr Rickards should have prepared a financial agreement taking effect pursuant to s 90UC of the FLA. This relevantly provides:
(1) If:
(a) while in a de facto relationship, the parties to the de facto relationship make a written agreement about any of the matters mentioned in subsection (2) in the event of the breakdown of the de facto relationship; and
(b) at the time of the making of the financial agreement, the parties to the de facto relationship are not the spouse parties to any other Part VIIIAB financial agreement that is binding on them with respect to any of those matters; and
(c) the financial agreement is expressed to be made under this section;
the financial agreement is a Part VIIIAB financial agreement. The parties to the de facto relationship may make the Part VIIIAB financial agreement with one or more other people.
(2) The matters referred to in paragraph (1)(a) are the following:
(a) how all or any of the:
(i) property; or
(ii) financial resources;
of either or both of the spouse parties at the time when the financial agreement is made, or at a later time and during the de facto relationship, is to be distributed;
(b) the maintenance of either of the spouse parties.
(3) A Part VIIIAB financial agreement made as mentioned in subsection (1) may also contain matters incidental or ancillary to those mentioned in subsection (2).[6]
(a) Section 90UC is concerned with financial agreements made between the parties while in a de facto relationship. There is a contest of fact between Ms Orwin and Mr Rickards as to whether Ms Orwin was in such a relationship with Mr Sarah at the time Mr Rickards prepared the property agreement ultimately executed by Ms Orwin and advised her with respect to it.
(b) A financial agreement under s 90UC may govern the distribution of property or financial resources of either or both parties held at the time of the financial agreement or at a later time and during the de facto relationship.
(c) Such a financial agreement governs the distribution of such property and financial resources in the event of the breakdown of the de facto relationship.
25 For completeness it should be noted that property settlement proceedings under s 90SM may be directed to the property of the parties as at the date of the proceeding.[7]
26 Section 90UJ governs the question of whether financial agreements are binding.
(1) Subject to subsection (1A), a Part VIIIAB financial agreement (other than an agreement covered by section 90UE) is binding on the parties to the agreement if, and only if:
(a) the agreement is signed by all parties; and
(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.
(1A) A Part VIIIAB financial agreement (other than an agreement covered by section 90UE) is binding on the parties to the financial agreement if:
(a) the financial agreement is signed by all parties; and
(b) one or more of paragraphs (1)(b), (c) and (ca) are not satisfied in relation to the financial agreement; and
(c) a court is satisfied that it would be unjust and inequitable if the financial agreement were not binding on the spouse parties to the financial agreement (disregarding any changes in circumstances from the time the financial agreement was made); and
(d) the court makes an order under subsection (1B) declaring that the financial agreement is binding on the parties to the financial agreement; and
(e) the financial agreement has not been terminated and has not been set aside by a court.
(1B) For the purposes of paragraph (1A)(d), a court may make an order declaring that a Part VIIIAB financial agreement is binding on the parties to the financial agreement, upon application (the enforcement application) by a spouse party seeking to enforce the financial agreement.
28 In the present case Ms Orwin contends that if Mr Rickards had fulfilled his obligations pursuant to his retainer by Ms Orwin, Ms Orwin would have obtained a binding financial agreement in accordance with s 90UJ(1).
29 Section 90UM governs the circumstances in which a court may set aside a financial agreement as contemplated by s 90UJ(1)(d). Section 90UM(1)(a), (e) and (h) relevantly provide:
(1) A court may make an order setting aside, for the purposes of this Act, a Part VIIIAB financial agreement or a Part VIIIAB termination agreement if, and only if, the court is satisfied that:
(a) the financial agreement was obtained by fraud (including nondisclosure of a material matter); or
...
(e) the financial agreement is void, voidable or unenforceable; or
...
(h) in respect of the making of a Part VIIIAB financial agreement - a party to the financial agreement engaged in conduct that was, in all the circumstances, unconscionable; ...
The question whether a Part VIIIAB financial agreement or a Part VIIIAB 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 to the financial agreement to another party to the financial agreement, of interest on an amount payable under the financial agreement, from the time when the amount became or becomes due and payable, at a rate not exceeding the rate prescribed by the applicable Rules of Court; and
(c) in addition to, or instead of, making an order or orders under paragraph (a) or (b), may order that the financial agreement, or a specified part of the financial agreement, be enforced as if it were an order of the court.
31 The financial agreement contained a series of recitals to the following effect:
• Since about 2000 the parties had resided together at 1 Murchison Street, East St Kilda, a property owned by Ms Orwin.
• The parties had lived in a de facto relationship since 2000 and continued to do so.
• The parties entered into the financial agreement voluntarily and independently.
• The parties intended the financial agreement to be legally binding as to their respective rights and obligations arising out of their relationship.
• Each party had received independent legal advice.
• The parties understood the financial agreement would 'finalise all financial matters resulting from their relationship'.
• The following properties were registered in the names of each of Ms Orwin and Mr Sarah:
(a) 1 Murchison Street, East St Kilda registered in Ms Orwin's name;
(b) 3 Lillian Street, Rye registered in Mr Sarah's name;
(c) 10 Turnberry Avenue, Fingal registered in Mr Sarah's name;
(d) 4/43-47 Clowes Street, South Yarra registered in Mr Sarah's name;
(e) 47 Booran Parade, Tootgarook registered in Mr Sarah's name; and
(f) 71 Jetty Road, Rosebud registered in Ms Orwin's name.
• Ms Orwin owned a Holden Commodore car registered in Mr Sarah's name.
• Ms Orwin had loaned Mr Sarah $43,882 to assist him in acquiring the Tootgarook and Rosebud properties.
• The Rosebud property was formerly registered in the names of Mr Sarah and one Mr Williams but transferred to Ms Orwin on or about 22 February 2010.
• The financial agreement was entered into 'for the mutual benefit of the parties and in order to clarify their respective positions and to create certainty'.
• Ms Orwin and Mr Sarah acknowledged that as at the date of the financial agreement they were in a de facto relationship with each other.
• Mr Sarah would continue to reside in the Murchison Street property until given written notice to vacate by Ms Orwin.
(1) The Murchison Street property was owned by Ms Orwin and Mr Sarah had no interest in it;
(2) The Jetty Road property was owned by Ms Orwin and Mr Sarah had no interest in it;
(3) The Lillian Street property was owned by Ms Orwin but held by Mr Sarah on trust for Ms Orwin;
(4) The Turnberry Avenue property was owned by Ms Orwin but held on trust by Mr Sarah for Ms Orwin;
(5) The Clowes Street property was owned by Ms Orwin but held by Mr Sarah on trust for Ms Orwin;
(6) The Booran Parade property was owned by Mr Sarah and Ms Orwin had no interest in it;
(7) The Holden car was owned by Ms Orwin and Mr Sarah had no interest in it.
• The parties then acknowledged that other than the assets described in the financial agreement the parties did not own any assets jointly and neither Ms Orwin nor Mr Sarah had any interests in any other assets each of them owned and not referred to in the financial agreement.
• Ms Orwin forgave the sum of $43,882 owed by Mr Sarah to Ms Orwin.
• Mr Sarah agreed to transfer to Ms Orwin each of the properties he held on trust for her within 90 days of receipt of a written demand 'at the cost of [Ms Orwin] including any stamp duty that may apply to such transfers, but on the basis that [Mr Sarah] acknowledges that at the time the properties were registered in [Mr Sarah's] name, [Mr Sarah] and [Ms Orwin] were in a de facto relationship and that [Mr Sarah] holds such properties on trust for [Ms Orwin]'.
• Mr Sarah would upon written demand return the Holden car to Ms Orwin.
• The parties would do all such acts and things necessary to give effect to the financial agreement.
• Mr Sarah would do all such acts and things, including signing any documents as may be necessary to effect the transfer of the properties contemplated by the financial agreement.
• The parties mutually acknowledged that they had no rights or claims of any nature against each other save for their respective rights and obligations pursuant to the financial agreement.
Was the financial agreement a s 90UC agreement?
33 The financial agreement did not meet the formal requirements of s 90UC(1)(c) in that it was not expressed to be made under s 90UC. Further the financial agreement did not purport to provide for what should occur upon the breakdown of the relationship. Rather it declared the existing rights of the parties in respect of property.
34 Further the financial agreement did not describe:
(a) All the real property owned by Ms Orwin at the date of the financial agreement;
(b) All the financial resources of the parties at the date of the financial agreement;
(c) The property which it was then anticipated Ms Orwin would shortly inherit from her mother.
35 The acknowledgment at term 4 of the financial agreement related to assets at that point in time:
36 The release set out in term 10 of the financial agreement was with respect to rights or claims which the parties had at that point in time:
37 If the relationship continued after the date of the financial agreement (as Ms Orwin maintains it did) the financial agreement did not provide for the resolution of rights acquired during that continuing relationship and crystallising upon its termination. This deficiency was not one arising out of any inadequacy of the description of existing rights but one resulting from the lack of prospectivity in the scope of the agreement.[8]
38 The combination of these matters meant that the settlement agreement was not a binding financial agreement constituting an effective and complete or partial bar to proceedings brought after the conclusion of the de facto relationship (assuming that it did not conclude as Ms Orwin submits until early 2011).
39 It follows from this conclusion that contrary to the submissions of Mr Rickards the financial agreement was not curable by way of rectification. This was not simply a case of a mutual slip by the parties with respect to the identification of a relevant statutory provision.[9]
40 Mr Rickards submits that Ms Orwin's claim is barred by s 5(1)(a) of the Limitation of Actions Act 1958, in that the proceeding was instituted more than six years after Mr Rickards drew up the financial agreement and advised Ms Orwin with respect to it.
41 Ms Orwin contends that the loss suffered by her was contingent upon the de facto relationship ending thereafter and Mr Sarah making a claim pursuant to the FLA for an alteration of property interests.
42 The leading case is Wardley Australia Ltd v The State of Western Australia.[10] In that case a plaintiff was induced by misleading or deceptive conduct to grant an indemnity under which it was obliged to make a payment when the loss of the party to be indemnified was ascertained and quantified. The plurality of the High Court[11] concluded that the plaintiff first suffered loss in respect of a contingent loss of this type only when the loss crystallised. Their Honours stated further:
The conclusion which we have reached is reinforced by the general considerations to which we referred earlier. It is unjust and unreasonable to expect the plaintiff to commence proceedings before the contingency is fulfilled. If an action is commenced before that date, it will fail if the events so transpire that it becomes clear that no loss is, or will be, incurred. Moreover, the plaintiff will run the risk that damages will be estimated on a contingency basis, in which event the compensation awarded may not fully compensate the plaintiff for the loss ultimately suffered. These practical consequences which would follow from an adoption of the view for which the appellants contend outweigh the strength of the argument that the principle applicable to the cases in which the plaintiff acquires property (or a chose in action) should be extended to cases where an agreement subjects the plaintiff to a contingent loss. In such cases, it is fair and sensible to say that the plaintiff does not incur loss until the contingency is fulfilled.
It seems to us that the High Court has set out the principles which are applicable here and that the other authorities relied upon should properly be seen as particular applications of those principles. The principles are:
(a) loss and damage may be suffered immediately in some circumstances, such as where an asset is acquired at a price above its true value: HTW Valuers;
(b) however, if the detriment is exposure to a loss which will only be suffered if events transpire in a particular way, loss and damage will not be suffered until those events do so occur: Wardley, Murphy.
(a) analyse the facts of the particular case: Wardley;
(b) identify the economic interest of the claimant which allegedly has been infringed: Hawkins v Clayton, Wardley; and
(c) have regard to the pleaded loss and damage claimed: Wardley.
The plaintiff could have found out at once that it had bought something which was worth less than that which it had agreed to pay and did pay. It could have recovered at least the difference between the price paid for, and the market value of, the Plaza. The limitation period would have begun to run.
45 In the present case Ms Orwin claims both for an immediate loss, namely the fees paid to Mr Rickards, and a subsequent contingent loss which crystallised upon the institution of proceedings by Mr Sarah. Ms Orwin submits that when a solicitor negligently renders services which are worthless, the solicitor is not entitled to recover or retain the legal fees for the service.[16] The question thus arises whether for the purpose of the rules governing the limitation of actions the damage first suffered in the present case arose from the fees paid to Mr Rickards in 2010.
46 In Wardley the plurality recognised that there may be cases where a plaintiff suffers a 'measurable loss at an earlier time, quite apart from the contingent loss which threatened at a later date'.[17] Their Honours further held that this was the proper characterisation of a number of earlier English decisions.[18] Forster v Outred and Co[19] and DW Moore and Co Ltd v Ferrier[20] were specifically referred to. Such cases are to be distinguished from cases in which as a result of a defendant's negligence a plaintiff enters into a contract which exposes him or her to a contingent loss or liability. In the second kind of case the plaintiff suffers no actual damage until the contingency is fulfilled and the loss becomes actual. Wardley itself was an example of the second kind of case. Conversely the present case may be regarded as an example of the first type of case. Ms Orwin claims that the financial agreement did not convey to her the asset which was intended. It was of no value to her in securing her ongoing property interests and in consequence she suffered an immediate loss.
47 In Vining v Marsden[21] Cohen J (in considering a claim for damages arising from allegedly negligent advice with respect to a maintenance agreement) put the critical conceptual distinction this way:
Thus the distinction to be drawn is on the one hand where there is a potential loss which may be suffered dependent upon a contingency, and on the other hand where a loss is suffered immediately even though the assessment of the damages might itself require a consideration of contingencies.[22]
48 In the case of the former situation time will not commence to run until the happening of the contingency, which is the first time when it can be said that damage has been suffered. In the latter case time runs as soon as some form of damage is suffered, even though the ascertainment of the amount of that damage might require the taking into account of unknown but possible situations.
49 There are two cases which help illustrate the distinction for the purpose of characterising the present case. In Winnote Pty Ltd v Page[23] a plaintiff sought advice from a firm of solicitors regarding the acquisition of a right to extract peat from a deposit in Victoria. In reliance upon that advice the plaintiff obtained a lease of the land comprising the deposit. Subsequently a third party obtained a mining license over the deposit and prevented the plaintiff from extracting peat from the land.
50 Mason P and Tobias JA held that the plaintiff first suffered damage as a result of the solicitor's advice at the time it obtained the lease, because the bundle of rights it obtained was inferior to that which it would have obtained if properly advised. The fact that the quantum of damage increased materially thereafter was irrelevant.
51 Mason P elaborated the concept of immediate damage as follows:[24]
Of course, a defendant wishing to show that the negligently induced 'transaction' caused immediate actual loss of a measurable kind has to establish that proposition. But sometimes this can be 'self-evident' (Wardley at 528 per Mason CJ, Dawson J, Gaudron J, McHugh J) or 'clear beyond argument' (Moore & Co at 279 per Bingham LJ. See also per Neill LJ at 277.).
The present is such a case, in my opinion. From the outset, Winnote got significantly less than it should have, in consequence of the solicitors' 1988 negligence. The 'goods were damaged' to use Lord Walker's terms. This is demonstrable when one compares the rights secured under the RPL with the rights that ought to have been secured under mining tenements from the outset. The former instrument was legally worthless as later events demonstrated. As Mr Gageler SC put it during argument in this Court, the rights secured by the RPL 'were of a dramatically inferior kind' (CA Tr p24).
Entry into the RPL and onto the land also prejudiced Winnote from the outset. There was measurable damage, albeit that the assessment exercise would have been a difficult one had Winnote got the matter to court in 1989-90. In October 1988 Winnote paid FS $3,650 for professional costs in drafting the RPL. Further substantial costs were paid in August 1989 for legal services provided by FS and FM in relation to obtaining the lease (J105-6). On 21-22 August 1989 Winnote paid Mr Sadler $7519 on account of royalties and $5305 on account of his costs (Blue 14/3403, 3417. Orange 533), these being obligations imposed by the RPL. The royalties were paid for peat that was not Mr Sadler's to sell. In truth, Winnote had exposed itself to a claim in conversion by the true owner of the peat, ie the Crown in right of Victoria. All of these were items of wasted expenditure that did not produce any proven commensurable value (see Commonwealth v Amann Aviation Pty Ltd [1991] HCA 54; (1991) 174 CLR 64 at 81-2, 107).
52 Because Winnote entered onto the land and commenced extracting peat, the facts in Winnote were complex and their characterisation was not free from difficulty.[25]
53 In the present case the facts are much simpler. Ms Orwin sought to acquire property rights by entering into the financial agreement. It was the failure to acquire these rights which gave rise to the possibility of contingent loss. But the fact that the financial agreement was legally worthless also gave rise to an immediate loss.
54 In Burton v Thom[26] the Supreme Court of New Zealand considered a claim in negligence against solicitors who failed to ensure a prenuptial agreement complied with the provisions of the Matrimonial Property Act 1976 (NZ). Because the wife did not receive independent legal advice and the agreement was not accompanied by certification in terms required by the Act, the agreement did not protect property of the husband from a claim under the sharing provisions of the legislation.
55 The negligent advice was given in 1990 and the claim in negligence was not bought until 2002. A six year limitation period applied, running from the date the cause of action accrued.
56 The husband maintained he did not suffer loss until the Family Court refused to treat the agreement as effective in 1999. The solicitors maintained that loss was first suffered when the agreement was entered into in March 1990 or when the matrimonial home was first occupied in October 1993.
57 After referring to the High Court's decision in Wardley, Elias CJ said:[27]
The present claim however is different. It is based on the immediate consequences of the defendant solicitors not performing their duty. Lord Hoffmann in Sephton considered that loss in such a claim was more readily inferred than in cases where the loss depends upon the outcome of a transaction into which the plaintiff has entered by reason of a misrepresentation:
If the liability is for the difference between what the plaintiff got and what he would have got if the defendant had done what he was supposed to have done, it may be relatively easy, as Bingham LJ pointed out in DW Moore & Co Ltd v Ferrier, to infer that the plaintiff has suffered some immediate damage, simply because he did not get what he should have got.
The present case is therefore comparable to cases such as Iron Trade Mutual Insurance Co Ltd v JK Buckenham Ltd, Bell v Peter Browne & Co, D W Moore, and Knapp v Ecclesiastical Insurance Group plc. They are cases where the plaintiff, through the negligence of the defendant, did not obtain the rights he should have obtained or had imposed on him liabilities or obligations that should not have been imposed.
58 Her Honour concluded that having regard to the effect of the Matrimonial Property Act (1976) (NZ) in the absence of a valid prenuptial agreement the husband suffered an immediate loss on his marriage because he 'did not get what he should have got'. Further, the husband would have had a claim in 1990 in respect of costs:[28]
Moreover, I think it clear that in March 1990 Mr Thom would have had an immediate claim for the costs of remedying the deficiencies in the agreement. They would have included the costs of obtaining legal advice on the options then available to him. There were a number of possible courses of action open to him, all of which would have entailed cost if Mr Thom was to be put in the position he would have been in but for the negligent advice. If Mrs Thom had been unwilling to enter into a further agreement on the same terms, Mr Thom might successfully have sought a different agreement to preserve the home as his separate property. Any additional benefit obtained by the wife as the price for entry into the agreement could well have been recovered as the measure of his loss. If his wife had not been willing to enter into an agreement, Mr Thom could have made application to the Court under s 21(9) for a declaration that the agreement have effect. Alternatively, he could have sought an order under s 25(3) as to the separate status of the Devon Street property, notwithstanding the fact that he remained living with his wife.
59 After analysing relevant authorities and the facts Tipping, McGrath and Wilson JJ said:
This is therefore a damaged asset case, not one of exposure to a contingent liability. The asset in question is the prenuptial agreement under which the plaintiff was supposed to obtain full protection against claims by his future wife for a share in the matrimonial home. The asset which the plaintiff acquired was, as a result of the combined negligence of his solicitors and himself, defective in that it did not give him the protection which it was his purpose to obtain. The product which he instructed his solicitors to procure for him was created with an inherent flaw. That flaw represented actual damage or harm which was suffered by the plaintiff from the moment the defective prenuptial agreement came into existence. The damage was quantifiable at that stage, either on the straightforward basis of what it would have cost the plaintiff to obtain or attempt to obtain a valid agreement or on the more difficult basis of the difference in value between a defective agreement and one which was not defective.
60 A directly similar analysis applies in the present case. The economic interest of the plaintiff was that of obtaining the asset of effective ongoing protection with respect to her property rights upon any future breakdown of the de facto relationship. The financial agreement did not give her any effective protection of this kind. The plaintiff's damages were quantifiable in the first instance on the straightforward basis that the costs incurred with respect to the financial agreement were entirely thrown away. The plaintiff claims for this damage and it is plain the loss in issue was suffered in 2010. It follows that the plaintiff's claim as a whole is statute barred.
Were the parties in a continuing de facto relationship when the financial agreement was signed on 10 March 2010?
61 The threshold premise of Ms Orwin's claim against Mr Rickards is that Ms Orwin and Mr Sarah were in a de facto relationship at the time the financial agreement was entered into. It was this alleged relationship which engaged s 90UC and Mr Rickards' breach of duty of care is alleged specifically by reference to a failure to comply with the provisions of s 90UC:
19. By way of operation of the FLA, particularly sections 90UC(1) and/or 90UJ(1) of the FLA the Binding Financial Agreement was not binding, valid or enforceable as between the Plaintiff and Sarah.
20. In breach of the Retainer and in breach of the First Defendant's duty of care to the Plaintiff, the First Defendant:
(a) drew the Binding Financial Agreement without reference to the FLA;
(b) drew the Binding Financial Agreement in terms so that it was not binding, valid or enforceable as between the Plaintiff and Sarah and in particular did not protect her assets and inherited assets, being the assets inherited from her mother's estate;
(c) failed to advise the Plaintiff that the Binding Financial Agreement was not binding, valid or enforceable as between the Plaintiff and Sarah; and
(d) allowed the Plaintiff to execute the Binding Financial Agreement despite it not being valid, binding or enforceable.
62 It follows that if Ms Orwin was not in a de facto relationship with Mr Sarah at the time the financial agreement was entered into the threshold premise of Ms Orwin's claim fails. Any failure to comply with s 90UC will not in fact have caused Ms Orwin damage because it did not govern her situation.
63 Section 4AA of the FLA relevantly defines de facto relationship as follows:
(1) A person is in a de facto relationship with another person if:
(a) the persons are not legally married to each other; and
(b) the persons are not related by family (see subsection (6)); and
(c) having regard to all the circumstances of their relationship, they have a relationship as a couple living together on a genuine domestic basis.
Paragraph (c) has effect subject to subsection (5).
Working out if persons have a relationship as a couple
(2) Those circumstances may include any or all of the following:
(a) the duration of the relationship;
(b) the nature and extent of their common residence;
(c) whether a sexual relationship exists;
(d) the degree of financial dependence or interdependence, and any arrangements for financial support, between them;
(e) the ownership, use and acquisition of their property;
(f) the degree of mutual commitment to a shared life;
(g) whether the relationship is or was registered under a prescribed law of a State or Territory as a prescribed kind of relationship;
(h) the care and support of children;
(i) the reputation and public aspects of the relationship.
(3) No particular finding in relation to any circumstance is to be regarded as necessary in deciding whether the persons have a de facto relationship.
(4) A court determining whether a de facto relationship exists is entitled to have regard to such matters, and to attach such weight to any matter, as may seem appropriate to the court in the circumstances of the case.
64 It can be seen that the application of the definition requires a consideration of all the circumstances of a relationship. In the present case the evidence reflected three possible characterisations of the extent of the relationship between Ms Orwin and Mr Sarah:
(a) A multifaceted and very full relationship between Ms Orwin and Mr Sarah from 2000 up until after the settlement agreement was entered into;
(b) A relationship which commenced in 2000 but ceased to be that of a couple living together on a domestic basis in or about 2004; and
(c) An intermediate position in which the relationship commenced in 2000 but due to progressive deterioration ceased to be that of a couple living together on a domestic basis in or about 2008 and in any event before the settlement agreement was signed (what I will refer to as 'the Jetty Road scenario').
65 These three scenarios emerge from five significant bodies of evidence:
(a) Ms Orwin's evidence to this court;
(b) Ms Orwin's evidence to the FCC;
(c) The evidence of Mr Rickards and his file notes bearing on the nature of the relationship between Ms Orwin and Mr Sarah at the time of the making of the financial agreement;
(d) The financial agreement itself; and
(e) The evidence relating to property transactions involving both Ms Orwin and Mr Sarah before and after the financial agreement.
66 I will address each of these parts of the evidence individually but before doing so I make the following general observations:
(a) The only witness to give direct evidence of the relevant relationship was Ms Orwin. Mr Sarah was not called by either party. It may be inferred that Ms Orwin did not call Mr Sarah to give evidence because despite maintaining that a de facto relationship persisted until 2011, he would also have given evidence that the financial agreement was entered into only because of Ms Orwin's undue influence. Conversely, it may be inferred Mr Rickards did not call Mr Sarah because he would have given evidence of a continuing de facto relationship up until 2011 albeit one in which he was subjected to undue influence. Perhaps more surprisingly, no friend or acquaintance of either Ms Orwin or Mr Sarah was called to describe circumstances of their behaviour during the relationship. This is despite the fact that on Ms Orwin's evidence the parties lived together in the same place in a close relationship for 11 years subject only to short separations and absences and as she said in evidence her friends came to the house from time to time.
(b) Ms Orwin's case thus turns squarely upon her acceptance as a witness of substantial truth and reliability.
(c) I am satisfied from Ms Orwin's evidence that the breakdown of her relationship with Mr Sarah was deeply disturbing to her. In consequence she gave evidence that was at times emotional about what were to her emotionally charged events. Mr Rickards submitted that I should draw inferences adverse to Ms Orwin's credit from the way she gave her evidence. In the circumstances I have identified I decline to do so. Likewise Mr Rickards attacked Ms Orwin's credit more generally by reference to the content of her Vic Bar website and other matters. Ultimately however I have reached my conclusion strictly upon the evidence that related to the issues in dispute. Because that evidence was detailed it will in turn be necessary for me to deal with it in some detail in order to do the parties' cases justice.
Ms Orwin's account of her relationship with Mr Sarah
67 Ms Orwin's evidence was that she met Mr Sarah in about 1997 at Hawthorn Toastmasters. In January 2000 Mr Sarah moved in to live with her at her home in Murchison Street, East St Kilda. The premises were large and comfortably accommodated both of them on two floors. Thereafter the parties engaged in a wide range of shared activities, including bicycle riding, going to Ms Orwin's family for Passover and Mr Sarah's family for Christmas, jointly visiting their respective parents on birthdays, going out regularly for dinner, going to movies together, travelling overseas (including a trip to Europe) and attending motor sports events together. They did everyday things together such as cooking, shopping and washing of clothes. They were initially sexually intimate but ceased sleeping together because Mr Sarah had restless leg syndrome. Sexual relations ceased in about 2004. Their joint activities changed over time. After 2004 Mr Sarah took up high end photography and they jointly attended family weddings for the purpose of him taking photographs. They also regularly visited a series of holiday properties on the Mornington Peninsula owned by Ms Orwin.
68 Ms Orwin paid all outgoings in respect of the household except some shared food expenses. Mr Sarah paid no rent. Mr Sarah was initially in substantial debt. After a period of unemployment he obtained steady employment with Radio Rentals. In the 2000s Ms Orwin completed a series of tertiary qualifications, worked in a marketing business involving health products called Nikken and completed her articles.
69 By 2008 Ms Orwin's mother's health had deteriorated and Mr Sarah helped care for Ms Orwin's mother, calling in on her each morning on his way to work.[29] Ms Orwin and Mr Sarah also visited Ms Orwin's mother jointly in the evening from time to time.
70 Ms Orwin described the relationship as close: 'I would go to the tailor with him and help him choose his suits, choose the colour of his shirts together, all the normal, as they say in Yiddish, the shtick. The full shtick. You know ... I bought him his first pair of Bally shoes. Why not.'
71 In her evidence in chief Ms Orwin described the impetus for contacting Mr Rickards as coming from a desire to protect the assets she owned and expected to inherit from her mother, and a desire to sort out her property as her father would have wanted, all her assets being derived from her father or her father's estate.
72 Ms Orwin says that her initial instructions to Mr Rickards were founded on a misconception that a de facto relationship was necessarily a sexual relationship. She says that she changed her mind after Mr Sarah insisted that they were in a de facto relationship and she investigated the definition of such a relationship (including having discussions with the principal of a firm of solicitors with whom she had formerly done articles).
73 Ms Orwin's evidence was that at the time the financial agreement was signed that Ms Orwin and Mr Sarah expected the relationship to continue and they were doing all the things previously mentioned 'regularly'.
74 She said that after the financial agreement was signed she and Mr Sarah stayed living in the same home together. They went out for her birthday in May and did 'all the same things from before'.
75 By February 2011 however the relationship had got to a point of 'substantial deterioration'. At that point Ms Orwin and Mr Sarah mutually decided Mr Sarah should move out of Murchison Street and live at Ms Orwin's mother's home in Sebastopol Street where he acted as a carer. As Ms Orwin put it 'that was when we really split up' although they still had quite a good friendship.
76 Ms Orwin's mother died in December 2011 but Mr Sarah stayed at Sebastopol Street until December 2012 when he moved out to live with his then fiancé.
77 In cross-examination Ms Orwin further elaborated this picture stating that the relationship did go through ups and downs and periods in which the parties were angry with each other. Such a period occurred at the end of 2009 but the parties reconciled after Christmas - 'we had gone away on our holidays together to the coast which we - which he booked very long in advance each year so that he could take - that he could utilise - Christmas and New Year public holidays so we could have, like, two and a half weeks or more on the Peninsula. And we'd reconciled. Everything was good and we both decided that we were in a de facto relationship given all our activities together and we'd been on holiday together to the holiday house together, we'd been on bike rides together, we'd been out for dinner for - together, we'd been to his family for Christmas together'.
78 This picture does not sit entirely comfortably with the file note of Mr Rickards of 3 February 2010 'Michael is in South Yarra + things are not good'. But Ms Orwin explained this and other records of stress involving Mr Sarah as simply reflecting recurrent arguments in a continuing strong underlying relationship.
79 When Ms Orwin's evidence to this court is considered as a whole, it can be seen that Ms Orwin described a well nuanced multifactorial mutually close domestic relationship as being existent at the date of the financial agreement essentially in a form that had continued for many years and continued thereafter.
80 Ms Orwin had adopted a dramatically different position before the FCC. The high point of that position may be regarded as the trial affidavit which she swore on 10 March 2017. In that affidavit she responded to an assertion in an affidavit sworn by Mr Sarah that Ms Orwin and Mr Sarah were in a de facto relationship from approximately April 1999 to February 2011:
As to paragraph 3, in around 2003-2004 we had become estranged as a couple and man/woman activity had ceased, essentially living separately under the same roof. In the following years I asked the Applicant to move out on numerous occasions however he would always reply, 'where will I go'. As he was bigger and stronger than me and simply refused to leave there was little I could do. I went to the police who declined to assist me.[30]
81 When cross-examined about this affidavit Ms Orwin said that what she said was not true. In particular it was not true that she and Mr Sarah became estranged as a couple in 2003/2004. She agreed that she had asked Mr Sarah to leave when they had arguments but denied that she had ever gone to the police.[31] Mr Rickards places particular emphasis on the following passage of transcript:
You swore falsely on oath about being estranged as a couple; did you? --- Yes.
You swore falsely on oath in the Federal Circuit Court in this affidavit in 2017 about being estranged as a couple; is that your evidence now? --- Yes.
82 These answers may be contrasted with Ms Orwin's evidence at another point
I would never lie to the Court. I've not been ever known to lie to the Court or mislead a court and I would never mislead a court under any circumstances. That would be risking my practising certificate and my entire career, and I take it very seriously ... it would be a breach of ethics.'
83 The position stated in her trial affidavit was fundamental to the case Ms Orwin presented to the FCC at trial. On 15 March 2017 Ms Orwin filed an outline of case in accordance with an order made by the trial judge. This commenced with a chronology which comprises a useful introductory summary of sequential dealings between the parties and is annexed as Appendix 1. The chronology stated:
Mid 2004 - parties commenced to live separate and apart under the one roof.
February 2011 ...
(b) Parties' de facto relationship ends.
85 Documents from Ms Orwin's solicitor's file indicate that the first entry was made after an initial draft chronology prepared for a mediation was discussed with Ms Orwin. Handwritten notes on the draft demonstrate an instruction was given to insert the first entry and delete the second, albeit that the second entry remained in both the position paper used at mediation and that subsequently filed in the Court.
86 In any event the position paper went on to put Ms Orwin's stance beyond doubt:
2. In the latter part of 1999, the Applicant and the Respondent formed a causal [scil casual] relationship, culminating in early 2000, with the Applicant leaving his shared accommodation and moving into the Respondents home at 1 Murchison Avenue St Kilda East ('Murchison Street'). At the time of that move, the Applicant had no substantive assets but substantial credit card debt.
3. From the outset the parties each occupied separate bedrooms, and engaged in a sporadic sexual relationship. At some time following the Applicant moving into Murchison Street, but certainly by the beginning/end of 2004, the companionship and/or sexual side of the association had ended however the parties continued to occupy the same house. From this time however they were not engaged in any domestic or de facto relationship in any legal or practical sense. They lived independently and apart at Murchison Street, alternatively at the Respondents holiday home, until finally the Applicant moved into the Respondent's late mothers' house at Sebastopol Street, St Kilda ('Sebastopol Street') for which he paid nominal rent.
4. At no time during the parties association did Sarah or Orwin:-
(a) Share joint bank accounts;
(b) Blend funds
(c) Make or Create Will in which the other was a beneficiary;
(d) Have Powers of Attorney in favour of the other;
(e) Make or consider making provision for the others future needs;
(f) Name or nominate the other as beneficiary in any superannuation fund;
(g) Hold life insurance policies in which the other was named as a beneficiary;
(h) Purchase or otherwise acquire property in joint names;
(i) Purchase or otherwise acquire any substantial assets such as motor vehicles, furniture, computer equipment and the like jointly or gift such items to the other;
(j) Hold a joint share portfolio or deal in shares;
(k) Live together (from early 2004 onwards) on a genuine domestic basis;
(l) Other than loan advances referred to below, enter into any arrangement that created any measure of financial dependence or inter dependence;
(m) Enter into any arrangement for financial support as between the parties;
87 The position paper is directly inconsistent with Ms Orwin's evidence in this Court.
88 When cross-examined about the position paper in this Court Ms Orwin said that the reference to companionship ending in 2004 was mistaken and that the document should have referred to the cessation of 'physical companionship'.
89 Ms Orwin further said that the statement that the parties were not engaged in any domestic or de facto relationship in any legal or practical sense was completely wrong.
90 She further elaborated that it was a 'policy position' which she adopted but it was completely wrong.
91 Likewise the further statement that the parties did not live together on a genuine domestic basis was also incorrect. They did live separate and apart in the sense that they had separate bedrooms and bathrooms but not otherwise.
92 Ms Orwin not only put forward a case of estrangement in 2004 in the documents she relied on at trial, but when Mr Sarah gave evidence at trial in the FCC, counsel for Ms Orwin put squarely to him that from 2004 onwards Ms Orwin and Mr Sarah became estranged and he occupied the house as a boarder who refused to leave.
93 Further when Ms Orwin gave evidence to the FCC she asserted both in her evidence in chief and in partially completed cross-examination that Mr Sarah was no more than a boarder who did not pay rent or outgoings - 'a non-financial boarder'.
94 For completeness I note that the affidavit and position paper put forward at trial and the position pursued in oral evidence followed 13 and a half days of preparation and conferences by Ms Orwin's counsel with Ms Orwin. The position adopted was a deliberate and considered one.
95 In my view despite Ms Orwin's attempts to explain away her evidence and position before the FCC, that evidence and position were fundamentally inconsistent with her evidence to this Court as to the continuing nature of her relationship with Mr Sarah in 2009 and 2010.
96 Moreover I note that the position put at trial in the FCC was also at odds with the position taken in an initial affidavit sworn and filed in the FCC. In that affidavit of 15 September 2015 she swore that Mr Sarah and Ms Orwin 'separated on a final basis in March 2010'. She further swore: 'the applicant and my relationship ended five years ago'.
97 In evidence in this proceeding Ms Orwin said both these statements were untrue.
98 The evidence and position adopted by Ms Orwin before the FCC was thus inconsistent in itself as well as being fundamentally inconsistent with her case before this court.
99 There is a final complication to the position of Ms Orwin before the FCC with respect to the duration of her relationship with Mr Sarah. This arises from her evidence with respect to the joint purchase by Mr Sarah and one Williams of a property at Jetty Road, Rosebud. The relevant transfer of land demonstrates this purchase took effect on 23 March 2006.
100 Ms Orwin's evidence in her trial affidavit filed in the FCC concerning this venture echoed evidence given in an initial affidavit filed in the proceeding and was as follows:
49. Whilst I encouraged the Applicant in his interest in property, I did not want to purchase any real estate conjointly, and avoided doing so. Sometime after the Applicant's purchase of Booran Road, he decided to acquire another property but again had insufficient funds to do so. He had become good friends with one of my friends I had introduced him to, Kevin Williams, and they decided to buy a property together. They decided to purchase 71 Jetty Road Rosebud ('Jetty Road') as Tenants in Common as to one half share each. The total purchase price was $214,000.00 and Jetty Road was then mortgaged to the National Australia Bank Limited. Neither Williams nor the Applicant were able to contribute funds to the purchase, and so I agreed to provide the whole of the deposit and incidental costs on the understanding that each of them would repay me in due course from profits from the transaction. At the time, I had no immediate funds at my disposal, and so relied on borrowed funds taken from my line of credit on which I paid interest. Neither Williams nor the Applicant reimbursed any of the interest to me. I paid all of the deposit in an amount of $21,400.00 being 10% of the purchase price of $214,000.00.
...
50. Unfortunately, the purchase of Jetty Road did not prove to be a viable venture for either the Applicant or for Williams. Neither had the funds to contribute any equity to the property so as to make up the balance of Mortgage repayments or to maintain it when it was not rented out.
In 2008- 2009, they both had real difficulty in meeting their obligations, and for a time I provided funds to both of them to enable them to pay the Mortgage. I recall that the Applicant blamed Williams for these difficulties, accusing him of not being able to maintain appropriate books in relation to the property. In late 2009 or early 2010 Williams advised the Applicant that he wanted to dispose of his interest in the property. I was approached to take over that share but as I was reluctant to have any conjoined property dealings I indicated that I could only assist if I purchased the whole of the property. Finally, to extricate both of them from this situation, and to avoid a forced sale of the Jetty Road property, I purchased Williams' share for $111,150.00, and recovered the funds I advanced to the Applicant by taking a transfer of his interest in the land in February 2010. The agreed transfer amount in relation to Williams was $111, 150.00 which was the amount required to:
(a) repay his share of the Mortgage to the National Australia Bank;
(b) reimburse me for the balance of monies paid by me on account of his share of the deposit and Mortgage payments to the date of transfer.
I discharged the Applicant's share of the Mortgage out of my own funds and took a transfer of the land.
...
51. The inability of the Applicant to properly manage his finances caused me real concern and I became anxious to extricate myself from any financial obligation that either he or third parties might assume I had towards him or on his account. It was at about the time that the Applicant first got into trouble in managing the Jetty Road property that I decided that we should have an agreement which set out our financial obligations to one another. By this time too, our association had deteriorated and we had little in common but the stress and anxiety of his finances. He continued to live at Murchison Street on the same arrangements I have described earlier, only contributing a share of our food expenses and doing his share of domestic chores ..
52. The issues surrounding Jetty Road were very stressful for all concerned and had put me to considerable expense. Accordingly, and following the transfer of that property to me I felt that it was important to clearly define the financial arrangement between us.[32]
101 The plain meaning of [51] is that by 2008 Ms Orwin's relationship with Mr Sarah had deteriorated to a point where they had little in common but the stress and anxiety relating to his finances. This account is again inconsistent with the tenor of Ms Orwin's oral evidence to this court. She sought to explain it by giving evidence that the friction occasioned by the involvement of Mr Sarah in the Jetty Road purchase resolved once Ms Orwin took the property over in early 2010. She also said that the statement that they had little in common but the stress and anxiety of Mr Sarah's finances, was written by her in a stressed out state of mind and was not a totally accurate reflection of the truth. She further said that in the period referred to both she and Mr Sarah were under additional stress because of the need to care for Ms Orwin's mother.
102 The statements in issue were made in two separate affidavits filed in the FCC. They were deliberately persisted in as a component of Ms Orwin's trial affidavit. They are not easily explained away. Apart from raising questions as to the consistency of Ms Orwin's evidence they also raise an intermediate scenario between those postulated by Ms Orwin and Mr Rickards. This is that the relationship neither ended in 2004 nor 2011 but deteriorated very substantially between those dates and collapsed in the two years prior to the execution of the financial agreement.
103 The evidence of Mr Rickards went to three significant matters:
(a) The instructions Mr Rickards received from Ms Orwin during the initial stages of the preparation of the financial agreement;
(b) The tenor of the continuing communications then received from Ms Orwin as to the nature of her relationship with Mr Sarah; and
(c) The instructions Mr Rickards received from Ms Orwin to amend the financial agreement to its final form.
104 On 9 October 2009 Mr Rickards received instructions from Ms Orwin over a 50 minute conference and made the following notes:
2.45pm: attendance on Miriam:
Michael Edward Sarah
In the house since January 2000
You want an agreement that he can't claim from you or the estate Not in a de facto relationship
No joint a/cs. You pay for everything
Your DOB 13/5/55 - 54
Michael DOB 20?/6/67 (42)
You want him to go but he says he doesn't want to go.
Never shared a bedroom. He has own room & computer. You have own bathrooms. You do things together Go out together 3 times a month
Some people think you're a couple
Michael works for Radio Rentals as a field rep. You don't know his wage don't know his financial details
Family Law Amendment (de facto financial matter and other measures) Act 2008
Michael's Assets
47 Booran Pde Tootgarook
½ interest 71 Jetty Road, Rosebud
Both properties are subject to a mortgage and rental
1 Murchison Street, East St Kilda 3183
[Phone number redacted]
No sexual relationship for 9 years
Last two weeks you told him you were seeing a solicitor
You will speak with Michael tonight & tell him that a letter is on the way Email this letter to you to look at first
105 Five observations may be made about these notes:
(a) As Mr Rickards said in evidence more was said over 50 minutes than is noted.
(b) Mr Rickards enquired as to and made notes as to the actual elements of the relationship. He did not simply accept the instruction that the parties were not in a de facto relationship.
(c) The instructions noted are in one respect directly inconsistent with Ms Orwin's evidence to this court namely the statement 'No sexual relationship for 9 years'. Moreover they do not reflect a full and multifaceted relationship of the kind which Ms Orwin describes in her evidence.
(d) Ms Orwin expressed a wish that Mr Sarah leave the premises.
(e) Mr Rickards was aware of the amendment to the FLA bringing de facto relationships under that Act. In oral evidence he confirmed that he was aware of the definition of de facto relationship under the FLA. In crossexamination he conceded that he may have known that the FLA provisions relating to de facto relationships came into force in March 2009.
106 On 16 October 2009 Mr Rickards forwarded to Ms Orwin a draft letter which stated:
Miriam has instructed me that you have resided together in the Murchison Street property since about 2000.
I am instructed however, that you do not live in a de facto relationship and that in essence, your relationship is one of convenience. Having taken detailed instructions from Miriam, it would appear to me that clearly there is not a de facto relationship.
Miriam wishes to document at this stage that a de facto relationship does not exist, for both of your benefits.
Miriam is prepared for you to continue to reside in the property. However, Miriam wishes to have me prepare a document acknowledging the fact that:-
• you are not in a de facto relationship
• neither of you will make a claim against the other, or against the other's assets
• the Murchison Street property is Miriam's alone
• that the properties known as 5 Lillian Street, Rye and 10 Turnbury Avenue, Fingal are both held by you, on trust for Miriam
• You owe Miriam the sum of $[to be advised] being moneys loaned by her to you, to assist you with the purchase of both of your properties mentioned below.
By such an arrangement, Miriam would also acknowledge of course that she has no interest in any of your assets, including your property at 47 Booran Parade, Tootgarook and your one half interest in the property at 71 Jetty Road, Rosebud.
Before proceeding to prepare a document outlining these matters, I would be happy to have some discussion with you.
It seems important that given you have been living in Miriam's property for such a long time, that the exact nature of your legal and personal relationship be clarified. Miriam is not calling for this money to be repaid now, but the document would acknowledge that these monies are owed and are to be repaid on agreed terms.
I look forward to hearing from you soon, so that we can commence some discussion about these matters and proceed towards finalising and documenting the situation, as it exists, in order to clarify your respective financial and personal circumstances.
107 The second paragraph of this letter confirms that Mr Rickards took sufficient instructions in conference to enable him to express an opinion as to whether a de facto relationship existed. In oral evidence he said the instructions he had received were consistent with statements Ms Orwin had made on previous occasions concerning her relationship with Mr Sarah.
108 Ms Orwin responded by email that the letter was 'great' and clarified some property details. Mr Sarah responded to a revised form of the letter on 9 November 2009 by way of a handwritten note advising Mr Rickards that Mr Sarah would be happy to discuss the matter regarding his relationship with Ms Orwin and 'documenting the situation as it exists in order to clarify our respective financial and personal circumstances'.
109 On 10 November 2010 Mr Sarah emailed a letter stating in part:
Thank-you for your letter 29 October I wish to let you know that I agree with the following;
• I am not in a de facto relationship
• I will not make a claim against Miriam and that we will not claim against the each other's assets or superannuation
• that the 1 Murchison Street property is Miriam's alone
• and that the properties known as 3 Lilian Street, Rye and 10 Turnbury Avenue, Fingal and 4/43 -47 Clowes Street South Yarra are all held by me for Miriam
• and that I owe Miriam the sum of $43,622.00 being moneys loaned by her to me, to assist me with the purchase of both 47 Booran Pde Tookagrook 3941 and 71 Jetty Rd Rosebud 3939.
I concur with Miriam regarding that above and now wish you to document this including that a de facto relationship does not exist, for both of our benefits.
I am happy that Miriam is prepared for me to continue to reside in the Murchison Street property and am happy that Miriam wishes to have me prepare a document acknowledging the all of the above.
110 There followed an extended series of messages from Ms Orwin to Mr Rickards both by telephone and email in which she urged Mr Rickards to progress the matter. They included statements that Ms Orwin was very stressed and wanted the situation resolved.
111 On 19 November 2009 Ms Orwin provided further details of the total money loaned by her to Mr Sarah for the purpose of purchasing the Booran Parade and Jetty Road properties, together with details of properties held by Mr Sarah. On 26 November 2009 Ms Orwin advised:
I am hoping that the financial agreement for me/Sarah will be completed soon
M Sarah continues to be abusive to me on a regular basis
And I am finding it very stressful to endure
Kindly/reply with proposed time frame
Cheers
112 Mr Rickards responded to this by email stating in part:
If there's abuse why let him stay in the house?
Dear Michael
That's correct - hopefully he will move out this weekend
Cooperation is not a Sarah trait
Excuses are the norm e.g. I'm hot cold tired exhausted hungry didn't know not authentic my parents set bad example - they abused me
It's my personality I'm not authentic I don't know I'm doing it etc etc etc...
Sarah completed high school the sixth form at Wesley College
And has degree from Monash Uni and expects me to buy that above never ending crap with regard to manners and household chores...
When it appears to me that the truth is that he couldn't be bothered or give a shit
Thanks for the advice
It is appreciated
...
114 This email strongly reinforces the view that as stated in her initial instructions Ms Orwin wanted Mr Sarah to move out.
115 On November 2009 a note of telephone discussion records:
You may have been in a de facto relationship once.
116 This reinforces the view that the continuing message conveyed to Mr Rickards was that any de facto relationship was over.
117 A preliminary draft of the proposed financial agreement was forwarded to Ms Orwin in early December. This recorded:
Miriam and Michael hereby acknowledge that they have ceased to be and are no longer in a de facto relationship with each other.
118 The draft was amended by Ms Orwin to record that Mr Sarah was then living at a unit owned by Ms Orwin in Clowes Street, South Yarra.
119 It was further amended to record that Mr Sarah would continue to live part time at Murchison Street. It was proposed that the financial agreement would record that Ms Orwin could give Mr Sarah 21 days' notice to vacate.
120 Further messages received by Mr Rickards from Ms Orwin in December requested the proposed agreement and stated that Ms Orwin was stressed out. Ms Orwin sent an email to Mr Rickards on 15 December 2009:
Hi, I faxed some changes in re the Sarah shit
I was wondering if it can be done ASAP as otherwise - I will not be having a happy xmas nor New Year
With his guillotine hanging over my neck
Hope this can be completed very very soon
121 Once again this letter confirms that Ms Orwin did not regard the relationship as a positive continuing one.
122 Shortly prior to Christmas 2009 Mr Rickards sought to brief counsel to advise with respect to the proposed agreement. Ultimately he forwarded a draft 'Relationship Agreement' to and obtained advice from the Second Defendant Ms Ilias. The instructions to Ms Ilias were in the following terms:
I refer to my discussion with you today and thank you for looking at this Agreement at this difficult time.
I act for a Miriam Orwin. Miriam has resided with a Mr Michael Sarah since about 2000. Their affairs have become intertwined, but they have not been in a de facto relationship for some time and Miriam wanted an Agreement prepared to cover the various matters as outlined in the attached Relationship Agreement that I have draft.
Miriam's main concerns are:-
1. Michael acknowledging that he holds various properties on trust for Miriam;
2. Michael acknowledging that he owes a debt to Miriam;
3. Michael acknowledging that he has no further claim against Miriam.
The difficulty for me has been, that I am not quite certain as to where the Agreement falls as regards relevant legislation. Miriam says they have not been in a de facto relationship for some time and it more or less was a relationship of some convenience, which now appears to be one of inconvenience.
Thanks again, and I look forward to hearing from you soon.
123 Ms Ilias responded by amending the draft agreement and advising:
I have made some amendments to the agreement and attach a marked up version. You can 'accept' or 'reject' the changes as you see fit.
If your client does not wish to have an agreement executed pursuant to the Relationships Act, and otherwise wishes to rely on a trust transfer for exemption from stamp duty, it is important to note that she will be required to satisfy the State Revenue Office that a trust existed at the time that the property was acquired (and that it was acquired by the relevant trustee at that time) and that she was a beneficiary of the trust at that time. The exemption that I suspect she has been told to rely upon is found in either s 36 or s 36A of the Duties Act 2000. The SRO document stamping requirements should be carefully considered if these sections are to be relied upon.
Alternatively, if her stamp duty exemption is founded upon a transfer of property arising from the breakdown in a domestic relationship (as defined), then she can readily produce the Relationship Agreement as prima facie evidence of her entitlement to that exemption (s 44 Duties Act).
As discussed, I otherwise note that the Relationship Agreement does not attract any further relief for Ms Orwin in relation to CGT liability (as far as I am aware off-hand).
I hope this is of some assistance.
Upon receipt of the attached document I would be pleased if you would call me to discuss.[33]
124 The amended draft provided by Ms Ilias included an instruction (in capital letters) that the financial agreement should state the date on which the relationship ended. In evidence Mr Rickards said that he subsequently marked up the date 25 February 2009 in handwriting upon the draft. He says that he must have done this on the instructions of Ms Orwin but he can recall no more about it. It may or may not be a matter of coincidence that this date falls immediately before the commencement of the relevant FLA regime.
125 In any event Mr Rickards also advised Ms Orwin that Mr Sarah would need to get independent advice and communications were then had with a series of solicitors who might undertake that task.
126 On 10 January 2010 Mr Rickards received an email from Ms Orwin advising that:
Thank you for all your help esp at xmas time
WE have renegotiated and Michael is willing to sign a 'de facto Financial Agreement'
So the document you prepared will need to be
Reshaped to convey such and
There are also some other small changes
1. We agree that the clause re Sarah owing monies is to be deleted/removed
2. We agree that his ½ interest [in] the property at 71 Jetty Road Rosebud is equitably mine I also have the financial responsibility for repayment of his portion of the loan over such
127 Mr Sarah also advised by email that he agreed with these changes.
128 Mr Rickards gave evidence that he understood the email from Ms Orwin to mean that the parties had 'renegotiated' but not that they were reconciled.
129 On 20 January 2010 Mr Rickards contacted Ms Orwin to discuss the position of the Jetty Road property. Further telephone messages from Ms Orwin expressed her continuing stress at the failure to resolve the financial agreement.
130 On 3 February 2010 Mr Rickards recorded a telephone call in which Ms Orwin advised:
Jetty transfer will go through on 19th or 20th of the month. Yesterday agreement on a price $242,500
Michael is in South Yarra + things are not good
131 On the same day Ms Orwin further advised she was happy to postpone the financial agreement until the Jetty Road property was transferred to her.
132 On 10 February 2010 Ms Orwin emailed Mr Rickards with further information concerning the Jetty Road transaction together with the following statements:
This needs to go as fast as possible
So that de facto relationship agreement can progress
1. Without 71 Jetty Road in the equation
2. And without Michael owing me any monies
3. Although it may be worth mentioning that I loaned Sarah the deposit being around $20,000
4. For 47 Booran Pde and ... [legal words] by this deed deem that debt has been satisfied
Re de facto relationship agreement it has been going far too long for my wellbeing and as Sarah currently agrees to sign we need to proceed as fast as pos
I do really appreciate your concern-wisdom and consternation
133 This message also reflects an ongoing concern that the financial agreement be signed in circumstances where Ms Orwin did not trust Mr Sarah.
134 On 20 February 2010 Ms Orwin forwarded to Mr Rickards a marked up copy of the proposed financial agreement. Some handwritten alterations had been made by Mr Sarah and some by Ms Orwin. The altered version of the financial agreement revised Mr Sarah's address to be the same as that of Ms Orwin and the first term of the financial agreement was amended to read:
Miriam and Michael hereby acknowledge that they are in a de facto relationship with each other.
135 Other telephone conversations followed relating to the resolution of the Jetty Road transaction. At the beginning of March there were also further telephone discussions about the final form of the financial agreement.
136 On 3 March 2010 Mr Rickards had a discussion with Mr Sarah about the de facto relationship issue. Mr Sarah advised Mr Rickards that he was in a de facto relationship and wanted the financial agreement to say this.
137 On 5 March 2010 Mr Rickards rang Ms Orwin and made the file note:
You say that ok to say that you're still in a de facto relationship now.
138 It is apparent that this did not accord with Ms Orwin's instructions as to the fact of the relationship up to this point in time. It was also at odds with the tenor of the relationship she consistently referred to in telephone messages and emails. As Mr Rickards emphasises his file note did not record an agreement that Ms Orwin was in fact party to a continuing relationship. Rather it noted that Ms Orwin was prepared to sign an agreement that she was.
139 On 5 March 2010 Mr Rickards amended the financial agreement inserting the amendments which he understood both Mr Sarah and Ms Orwin wanted. He forwarded the amended agreement to them.
140 Further difficulties were then experienced in finding a solicitor to independently advise Mr Sarah, but ultimately the revised agreement was signed on 12 March by Mr Sarah together with a certificate of independent advice from Mr Connor and by Ms Orwin together with a certificate of independent advice from Mr Rickards.
141 Viewed as a whole Mr Rickards' evidence and in particular his file records tend to support the account given by Ms Orwin to the FCC of her relationship with Mr Sarah rather than the account given to this Court. Mr Rickards' evidence confirms the following:
• Detailed instructions initially taken by Mr Rickards did not support the conclusion Ms Orwin was in an ongoing de facto relationship;
• The course of communications from Ms Orwin to Mr Rickards up until the signing of the agreement tended strongly to confirm ongoing hostility by Ms Orwin towards Mr Sarah; and
• The instructions ultimately received by Mr Rickards were not that Ms Orwin and Mr Sarah were in fact in a de facto relationship but that Ms Orwin would sign an agreement to this effect because Mr Sarah required this.
The essential character of the financial agreement
142 The terms of the financial agreement itself form part of the circumstantial evidence bearing on the question of whether there was a continuing de facto relationship at the time it was signed. On the one hand the agreement contained mutual acknowledgements of the existence of such a relationship. On the other hand the agreement effectively set out and settled the existing property rights of the parties.
143 There was no significant benefit conveyed by the agreement to Mr Sarah. The substantive terms of the agreement involved a settling of mutual affairs as equally consistent with the termination of a de facto relationship as it was with the making of an agreement in the course of an ongoing relationship.
144 Insofar as it was prospective the financial agreement envisaged:
(a) Ms Orwin could evict Mr Sarah on 21 days' notice;
(b) Ms Orwin could require the transfer back of three properties acknowledged to be held by Mr Sarah on trust for Ms Orwin; and
(c) Ms Orwin could require the return of the Holden motor car.
145 On the face of it, the agreement was disproportionately advantageous to Ms Orwin. At the date of the agreement (and in consequence of it) the parties' position was as follows. Mr Sarah owned the Tootgarook property from the sale of which he ultimately received a net $145,000 in 2012. Ms Orwin (or the family company which she controlled) owned:
146 Ms Orwin retained a very substantial real estate portfolio. The disposition of property did not of itself bespeak a close mutual relationship between the parties.
147 In final submissions Ms Orwin submitted that there were seven property dealings which support the conclusion that Ms Orwin and Mr Sarah were in a de facto relationship which continued up until the date of the financial agreement.
(a) Ms Orwin obtained full ownership of Clowes Street on 21 July 1995. As contemplated by the financial agreement the property was transferred to Mr Sarah as a domestic partner on 30 December 2009. Mr Sarah held the property on trust in accordance with the financial agreement and upon its sale in May 2012 the proceeds were paid to Ms Orwin.
(b) Ms Orwin purchased 13 Marcia Street, Rye in June 2000 and transferred the property to Mr Sarah on 27 November 2008 as a domestic partner. The evidence is that the house upon the property had been destroyed by a fire. It was subsequently sold by Mr Sarah on 10 March 2009 and the proceeds paid to Ms Orwin.
(c) The Booran Parade, Tootgarook property was purchased by Ms Orwin in 2002 but transferred to Mr Sarah in 2004 for the price of $250,000 of which Ms Orwin forgave some part pursuant to term 5 of the financial agreement. The financial agreement acknowledged that this property was owned by Mr Sarah.
(d) 9 and 10 Turnberry Avenue, Fingal were purchased by Ms Orwin on 29 August 2003 and both were subsequently transferred to Mr Sarah. 10 Turnberry Avenue was transferred by Mr Sarah to Ms Orwin on 3 August 2008 and 9 Turnberry Avenue was transferred by Mr Sarah to Ms Orwin on 27 November 2008. Number 9 was then transferred back to Mr Sarah as a domestic partner on 30 December 2009 and on sold on 10 May 2011. The proceeds were paid to Ms Orwin. It appears that the reference to the Fingal property in the financial agreement was treated as a reference to number 9 despite the description of number 10 in the recitals as being registered in the name of Mr Sarah.
(e) 71 Jetty Road, Rosebud was transferred to Ms Orwin by Mr Sarah and Mr Williams in February 2010. The debt forgiven by Ms Orwin to Mr Sarah under the financial agreement was also expressed to relate to moneys owing in respect of this property. Such moneys comprised financial assistance Ms Orwin had previously given Mr Sarah to assist him to purchase an interest in the property.
(f) 3 Lillian Street, Rye was purchased in Mr Sarah's name on 23 February 2009 and was the subject of the financial agreement. It was transferred to Ms Orwin in 2013.
148 Whilst it is true that both Ms Orwin and Mr Sarah were parties to a series of mutual property transactions in and after 2008 the purpose of transfers of land by Ms Orwin to Mr Sarah was explained by Ms Orwin in evidence as being that of reducing the total land tax otherwise payable by her.
149 In contrast the Booran Road transaction involved a partial gift to Mr Sarah in 2004 and the Jetty Road transaction extricated Mr Sarah from financial difficulties in early 2010.
150 Ms Orwin relies upon the fact that a number of transfers were made between 2006 and 2011 which were expressed to be for love and affection or to be in consideration of a domestic relationship. But as Mr Rickards said the obvious purpose of expressing the consideration for the transfers in this way was to avoid stamp duty.
151 The fact that Mr Sarah was prepared to engage in these transactions does not materially advance Ms Orwin's case with respect to the threshold issue of fact. It demonstrates that Mr Sarah was prepared to engage in property transactions at the request of and for the benefit of Ms Orwin but it does not substantiate an ongoing de facto relationship of the kind she describes. Mr Sarah was living rent free as a licensee and some cooperation on his part is hardly surprising.
152 It is convenient to note at this point a second aspect of the evidence highlighted by counsel for Ms Orwin, namely the evidence that Mr Sarah gave ongoing care to Ms Orwin's mother from 2006 up to and after the making of the settlement agreement. The commencement of this care tends to support the evidence of a de facto relationship at that point in time. But its continuation does not of itself necessarily demonstrate that the relationship continued to flourish. It demonstrates an ongoing relationship with Ms Orwin's mother but does not necessarily show a continuing closeness to Ms Orwin. It is a circumstance which favours Ms Orwin's case but it is not conclusive.
153 There is another aspect of the evidence with respect to transfers of land which must be addressed. Mr Rickards relies on certain of the transfers of land by Ms Orwin for the purposes of a collateral attack on Ms Orwin's credit. On three occasions over a period of 13 years Ms Orwin signed documents in circumstances where her signature was purportedly witnessed by 'Marlin Fisher'. The documents are:
(a) A transfer of land (13 Marcia Street, Rye) to Ms Orwin on 30 June 2000;
(b) A transfer of land dated 18 December 2013 (3 Lillian Street, Rye) from Mr Sarah to Ms Orwin; and
(c) A letter to the Australian Securities and Investment Commission dated 19 March 2006.
154 Ms Orwin's full name is Miriam Marlin Orwin. She gave evidence that she was called Marlin by mistake as a result of a misunderstanding when her father (whose first language was not English) sought to name her 'Marilyn'.
155 Ms Orwin also gave evidence that Marlin Fisher was a female friend whom she first met while they were both studying at the Southern School of Natural Therapies.
156 Mr Rickards submitted that Marlin Fisher is an improbable name for a woman and that the way in which Marlin Fisher signed her first name on each of the documents bore a remarkable resemblance to the manner in which Ms Orwin wrote her second name on a number of other documents. In particular the letter 'M' was written in a distinctive manner.
157 It was specifically put to Ms Orwin late in her cross-examination that she had forged the signatures of Marlin Fisher and that Marlin Fisher was fictitious.
158 Because these allegations were made late in Ms Orwin's cross-examination (on Friday 3 May 2019 being the third day of such cross-examination) and because Ms Orwin's response was not stated until that point in the trial I indicated on Monday 6 May 2019 a provisional preparedness to accept evidence prior to final address on Thursday 9 May 2019 of any records from the Southern School of Natural Therapies as to the existence of Marlin Fisher. On Thursday 9 May 2019 (the sixth day of hearing) affidavit evidence was tendered on behalf of Mr Rickards demonstrating that the Southern School of Natural Therapies had no record of Marlin Fisher as a student. In turn I permitted Ms Orwin to adduce evidence from a friend to the effect that she had attended a dinner at Ms Orwin's house some five years earlier and met Marlin Fisher whom she described. I refused leave to Ms Orwin to adduce further evidence from another acquaintance of Ms Orwin confirming the existence and identity of Marlin Fisher because it was proposed such evidence would be adduced after closing addresses.[34]
159 I have examined the photocopy documents upon which Mr Rickards relies. I am not satisfied the allegation of forgery is made out:
(a) The documents are not originals and to my eye there are some variations in the handwriting relied upon;
(b) No expert evidence has been called in support of the allegations of forgery;
(c) The allegation of forgery was not supported by evidence from Mr Sarah who might have been called by Mr Rickards as to the facts in issue but was not.
160 In reaching these conclusions I have had regard to the gravity of the allegation.[35]
161 The evidence establishes that for a number of years Ms Orwin and Mr Sarah were in a de facto relationship. It also establishes that at the date of the financial agreement Mr Sarah continued to live rent free at Ms Orwin's home in Murchison Street or elsewhere such as the unit at Clowes Street, at her request.
162 Ultimately however I am not persuaded that the relationship continued to have the characteristics described by Ms Orwin as at the date of the financial agreement.
163 As she was the only witness called to establish the relationship her credibility was critical in respect of this issue.
164 Having regard to the inconsistencies between her evidence and position before the FCC compared with her evidence to this court, together with the contemporaneous notes taken by Mr Rickards relating to the background to the financial agreement, I am not persuaded that Ms Orwin is a reliable witness as to the ongoing nature of the relationship in March 2010.
165 As a matter of probability I am inclined to the view that what I have called the Jetty Road scenario is more probable than that advanced by either of the parties. On this view the relationship neither ceased in 2004 nor continued to flourish in 2010, but deteriorated markedly in the intervening period and had ceased before Ms Orwin gave instructions to Mr Rickards in 2009.
166 This said I am simply not satisfied that in March 2010 circumstances persisted which amounted to a de facto relationship. I do not accept Ms Orwin has established that she and Mr Sarah were living together as a couple on a genuine domestic basis. In particular I am not satisfied that Ms Orwin's evidence as to the ways in which they lived a mutually shared life is reliable.
167 The relationship had reached the point where Ms Orwin desired and obtained a written agreement that she could require Mr Sarah to vacate the premises on 21 days' notice. Insofar as the relationship remained a mutually positive one I am not persuaded that it extended beyond one of convenience.
168 It follows that irrespective of the limitations defence Ms Orwin's claim also fails on the threshold issue of fact.
Did Ms Orwin suffer damage as a result of Mr Rickards' breach of duty of care?
169 If (but only if) I am wrong in respect of the threshold issue of fact and Ms Orwin and Mr Sarah were in a continuing de facto relationship at the date of the financial agreement, then I would be satisfied that Ms Orwin has suffered damage as a result of Mr Rickards breach of duty of care.
170 The financial agreement was not drawn with reasonable care by Mr Rickards. Mr Rickards was aware of the relevant amendment to the FLA. He initially drew the financial agreement in accordance with his instructions that the de facto relationship was over and indeed had ceased a considerable time ago. In turn he obtained advice from counsel as to an appropriate form of agreement to adopt in these circumstances. There was no failure to take reasonable care up to this point in time.
171 Once the terms of the financial agreement were amended on instructions to record a continuing relationship at the time of the financial agreement, however, then the financial agreement was not in an appropriate form and had to be substantially amended to comply with s 90UC.
172 Mr Rickards cannot rely upon the fact that he sought the advice of counsel to discharge his duty of care because the draft financial agreement settled by counsel recited and the instructions otherwise given to counsel were, that the de facto relationship had ended. Hence s 90UC had no application.
173 Counsel who was briefed to advise emphasised the significance of the termination of the relationship by advising that the financial agreement must recite the date on which the relationship ended.
174 The authorities relied on by Mr Rickards for the proposition that a solicitor may rely on specialist counsel to discharge his or her duty of care to a client, demonstrate that a solicitor may have an independent duty of care despite briefing counsel.[36] In the circumstances which arose Mr Rickards had a duty of care to take reasonable steps to ensure that the amendment of the financial agreement to assert a continuing de facto relationship did not affect its validity. Mr Rickards breached this duty.
175 The financial agreement was not in its terms or its form an effective agreement with respect to the disposition of property upon the future termination of an existing de facto relationship. It was patently defective as an instrument governing the rights of parties to a continuing relationship.
176 The financial agreement did not provide the protection Ms Orwin might have obtained pursuant to s 90UC. In consequence the financial agreement was legally worthless and the costs Ms Orwin incurred were thrown away.
177 In addition Ms Orwin suffered the loss of the opportunity to rely on an effective agreement in the event that the relationship with Mr Sarah terminated and he made a claim for alteration of property interests pursuant to s 90SM.
178 The principles governing the loss of opportunity claim were stated by the plurality of the High Court in Sellars v Adelaide Petroleum NL:[37]
Notwithstanding the observations of this Court in _Norwes_t, we consider that acceptance of the principle enunciated in Malec requires that damages for deprivation of a commercial opportunity, whether the deprivation occurred by reason of breach of contract, tort or contravention of s.52(1), should be ascertained by reference to the court's assessment of the prospects of success of that opportunity had it been pursued. The principle recognized in Malec was based on a consideration of the peculiar difficulties associated with the proof and evaluation of future possibilities and past hypothetical fact situations, as contrasted with proof of historical facts. Once that is accepted, there is no secure foundation for confining the principle to cases of any particular kind.
On the other hand, the general standard of proof in civil actions will ordinarily govern the issue of causation and the issue whether the applicant has sustained loss or damage. Hence the applicant must prove on the balance of probabilities that he or she has sustained some loss or damage. However, in a case such as the present, the applicant shows some loss or damage was sustained by demonstrating that the contravening conduct caused the loss of a commercial opportunity which had some value (not being a negligible value), the value being ascertained by reference to the degree of probabilities or possibilities. It is no answer to that way of viewing an applicant's case to say that the commercial opportunity was valueless on the balance of probabilities because to say that is to value the commercial opportunity by reference to a standard of proof which is inapplicable.[38]
179 In the present case if it is hypothesised that s 90UC was applicable and that the opportunity was lost to obtain a s 90UC agreement then I am satisfied the opportunity lost was of some substantial value.
180 Ms Orwin claims for three contingent losses. First, costs in the sum of $44,447.54 incurred in respect of Supreme Court proceedings taken by her to remove caveats lodged by Mr Sarah over the titles to certain properties owned by Ms Orwin. Ms Orwin was successful in these proceedings and obtained orders for her costs. I am not satisfied that she suffered a loss in respect of these costs as a result of any deficiency in the financial agreement. Nonetheless $22,470 of such costs were forgone as part of the settlement between Ms Orwin and Mr Sarah in the FCC and fall to be considered as part of the property settlement in that case.
181 Secondly, Ms Orwin claims her costs of the proceedings in the FCC in the sum of $207,050.34. The statutory presumption in respect of such proceedings is that each party ordinarily bears their own costs.[39] In my view it is overwhelmingly probable that if a valid s 90UC agreement had been entered into Mr Sarah would still have instituted proceedings in the FCC, either seeking to have the agreement set aside as unconscionable or seeking orders with respect to property not able to protected pursuant to s 90UC. I shall return to both these issues below but for present purposes it is sufficient to say I am not satisfied Ms Orwin has established that it is probable she could have avoided costs of these proceedings in the circumstances hypothesised. Further I accept Mr Rickards' submission that the costs have not been proved to be reasonable.
182 Conversely I accept on the balance of probabilities that if s 90UC applied a properly drawn s 90UC agreement would have constituted a substantial bar to a claim under s 90SM by Mr Sarah. There was a substantial prospect that such an agreement would be signed by Mr Sarah. The loss of the potential benefit of the s 90UC agreement was thus a loss of some substantial value to Ms Orwin.[40] Accordingly, in the circumstances hypothesised, Ms Orwin had a claim (subject to contingencies) for such loss.[41]
183 Ms Orwin claims the sum of $550,000 paid by way of settlement to Mr Sarah in the FCC to which should be added the sum of $22,470 costs forgone pursuant to the settlement giving a total of $572,470.
184 Mr Rickards submitted that such sums had not been shown to be a reasonable settlement. In answer, in reliance upon r 44.04 of the Supreme Court (General Civil Procedure) Rules 2015, Ms Orwin tendered the expert report of Mr Bartfeld QC filed and served on behalf of Mr Rickards.
185 I am satisfied that this report demonstrates that the settlement was reasonable. The report records difficulties arising from the absence of proper valuation evidence. Nonetheless Mr Bartfeld answered a question asking what range of outcomes Ms Orwin could have achieved or might reasonably have expected to achieve by way of settlement on 17 March 2017 as follows:
I have postulated an outcome which, subject to the assumptions and limitations is a payment by Ms Orwin to Mr Sarah of $777,000. He would also retain his assets. From the paid amount Mr Sarah would need to pay the costs ordered by the Supreme Court of $22,470 leaving a balance he retained of $754,530 which I round down to $750,000. I've estimated the range of payments by Ms Orwin to Mr Sarah between $296,872 and $1,376,545 before the repayment of costs.
Looking at the possible outcomes, in my opinion the settlement which was negotiated of $550,000 plus the forgiveness of the costs is both appropriate and advantageous to Ms Orwin and Mr Sarah. It is very pragmatic, solves a lot of the procedural problems confronting both parties and provides certainty and finality. It gives Mr Sarah about 5.6 percent of the total assets of both parties.
The payment of $550,000 plus $22,470 (a total of $572,470) is less than my assessment, but it is well within the range within which reasonable minds may differ. In my opinion the settlement is appropriate and it is just and equitable.
187 I note for completeness that the settlement was arrived at after counsel for Ms Orwin had conceded that the financial agreement could not be relied on under s 90UC. In consequence allegations initially raised in the proceeding by Mr Sarah as a basis for setting aside the financial agreement were no longer live issues. In the present context however the allegations may still give rise to contingencies which would have confronted Ms Orwin if a s 90UC agreement had been entered into.
188 Lastly in this context, Mr Rickards submitted that Ms Orwin suffered no financial loss as a result of the failure to obtain an effective financial agreement because she gave evidence that she always wanted to give Mr Sarah money and that she would have preferred to settle with him at mediation for more than $550,000.
189 I reject this submission. The question is whether Ms Orwin suffered a loss of opportunity at the date of the financial agreement, not what her subsequent thoughts were.
190 The figure of $572,470 fell to be discounted for a series of contingencies.
191 In Thompson v Schacht[42] the New South Wales Court of Appeal considered a case of professional negligence by a solicitor in preparing a binding financial agreement pursuant to the FLA. Basten JA summarised the relevant principles by reference to the decision of Giles JA in Heenan v Di Sisto:[43]
The law approaches questions of causation and damages for loss of a chance differently (and somewhat awkwardly). The principles were addressed by Giles JA (with whom Mason P and Mathews AJA agreed) in Heenan. That case also involved a claim in damages against a solicitor. The respondents had been the owners of two adjoining properties which they agreed to sell to a developer. The sales fell through, but the claim in negligence against the solicitor was based on his failure to make the contracts interdependent. Giles JA identified the issues in the following terms:
'[27] Putting aside nominal damages for breach of contract, the respondents were entitled to such damages as would put them in the position they would have been in had the appellant done what he should have done; that is, had he sought instructions as to whether the contracts for the sale of No 33 and No 126 should be made interdependent or suggested that they should be made interdependent. That position was not limited to having interdependent contracts, but extended to the commercial outcome of having interdependent contracts; the contracts were steps in achieving a commercial transaction. Deciding what the respondents' position would have been involved past hypothetical events. If the appellant had so suggested and sought instructions, would the respondents have instructed him that the contracts should be made interdependent? Would Skyworld [the prospective purchaser] have agreed? Even if contracts were exchanged with interdependency clauses, it was not inevitable that Skyworld would have completed the contracts: would it have completed them?
[28] As a general proposition past hypothetical events in the assessment of damages are not decided on the balance of probabilities, by which satisfaction that it is more likely than not that they would in fact have occurred establishes for the assessment that they would have occurred. Rather, the damages are assessed according to the degree of probability that the events would have occurred, provided that the probability is not so low as to be speculative ...: Malec v J C Hutton Pty Ltd [1990] HCA 20; (1990) 169 CLR 638 at 643. ...
[29] There is, however, an initial question of causation: has the negligence or other wrong caused the loss of a chance? This is decided on the balance of probabilities. ...
...
[33] I adopt this approach to whether the respondents would have instructed the appellant that the contracts should be made interdependent. As will appear, it would not matter if what the respondents would have done was according to the degree of probability. Whether Skyworld would have agreed and whether it would have completed the contracts, however, are part of the valuation of the lost chance, to be ascertained by reference to the degree of probabilities or possibilities.'
192 In Thompson v Schacht, the first potential contingency addressed was whether the wife would have signed a binding financial agreement.[44] The second potential contingency arose from the possibility that the wife would have succeeded in setting the hypothetical binding financial agreement aside.
193 The first contingency to be considered in the present case was the risk that Mr Sarah would not have signed an effective s 90UC agreement.
194 It is probable that a competent independent solicitor would have advised Mr Sarah that:
(a) the effect of such an agreement was to require him to transfer three properties to Ms Orwin of which he was the registered proprietor, in circumstances where no declaration of trust had previously been made, and if the transactions pursuant to which he was registered were made bona fide within a de facto relationship for the consideration stated, Ms Orwin's claim to beneficial ownership was problematic;
(b) The agreement barred Mr Sarah from future claims in the context of an ongoing relationship which had already lasted 10 years and might continue for many further years;
(c) The result of a distribution of the parties' assets was grossly disproportionately favourable to Ms Orwin and disadvantageous to Mr Sarah having regard to the 10 year duration of the relationship, its ongoing nature and their joint assets.
195 As against this the fact is that Mr Sarah did execute the financial agreement after receiving advice from Mr Connor and in turn executed a series of transfers of land at the request of Ms Orwin both before and after the date of the financial agreement.
196 Evaluation of these matters requires consideration of Mr Rickards' submission that Mr Connor was not independent. This is raised as a separate potential ground of challenge to the validity of the hypothetical s 90UC agreement but it also raises a factual issue which bears directly on the probability of Mr Sarah signing a s 90UC agreement and on the issue of undue influence to which I shall shortly come.
197 The evidence shows that Mr Connor was known to both Ms Orwin and Mr Sarah through prior involvement in the Nikken marketing business in which both Ms Orwin and Mr Sarah had involvement over a number of years. Albeit that Mr Sarah's involvement was essentially that of assisting Ms Orwin. I do not accept that this necessarily means he was not 'independent' in the relevant sense at the time of the making of the financial agreement.
198 It was also put to Ms Orwin that Mr Connor had acted for Ms Orwin or her family company in commercial transactions. She agreed that this occurred but not until after the signing of the financial agreement.
199 In addition, shortly before the execution of the financial agreement the evidence supports the view expressed by Mr Rickards that Mr Connor acted for all parties in respect of documenting the sale to Ms Orwin of the Jetty Road property by Mr Sarah and Mr Williams. Once again, I do not accept this establishes Mr Connor was not independent.
200 There is hearsay evidence that Mr Connor advised Mr Sarah not to sign the financial agreement. Conversely Mr Sarah's evidence to the FCC was that Mr Connor 'rubber stamped' the agreement.
201 Mr Sarah was not called to give evidence in this Court and the evidence given by him in the FCC was not admitted as truth of its contents. In my view, Mr Rickards has not demonstrated that the contemporary certificate attached to the financial agreement should be displaced and disregarded.[45]
202 It would be a grave act of professional misconduct if Mr Connor did not tell the truth in his certificate.[46]
203 Accepting that Mr Sarah received independent advice but looking at the evidence as a whole and paying particular regard to the factors which I have identified above, I find that there was a 20 percent risk Mr Sarah would not have signed an effective s 90UC agreement.
204 Mr Rickards contends that a further risk arose with respect to the possibility a s 90UC agreement would be set aside for non-disclosure of assets by Ms Orwin at the time of its making.
205 At the date of the financial agreement Ms Orwin owned a number of properties not referred to in the financial agreement. The chronology submitted by her to the FCC summarises the sequence in which her assets were obtained.[47]
206 In turn, Ms Orwin gave evidence in this Court that although not referred to in the financial agreement, Mr Sarah was well aware of her interest in each of the relevant properties. This evidence was circumstantial and there is no obvious reason to doubt it. On the other hand, Mr Sarah raised an issue of non-disclosure in the FCC which is more problematic.
207 In an initial affidavit filed in the FCC Mr Sarah deposed that at the time the financial agreement was made Ms Orwin had significant assets not mentioned in the financial agreement including funds of approximately US$1 million held in investments with Morgan Stanley Dean Witter. He further stated 'US contact is Sean Yu'.
208 Ms Orwin did not respond directly to this allegation in her subsequent affidavits but denied the existence of any such funds in her evidence to this court.
209 A file note of 1 February 2016 made by Ms Orwin's solicitor during the FCC proceeding states:
Today speaking to Glick, Schlicht and Miriam a few times.
Basically Glick has said the affidavit needs a few changes and Schlicht is working on those.
Miriam is only concerned with the reference to the money in the US and she is going in to see Schlicht about this aspect - she believes it should not be mentioned on the basis that it opens a can of worms and allows discussion but at the same time Sarah mentions it in his affidavit and Schlicht believes we need to address it even in the most simple straightforward way. This is really the only thing she is thinking about.
210 The draft affidavit of Ms Orwin referred to has not been discovered nor produced when requested. In oral evidence, Ms Orwin explained the statement 'she believes it should not be mentioned on the basis that it opens a can of worms' by saying that her solicitor must have misunderstood her.
211 On 9 September 2016 Ms Orwin's solicitor made a further file note:
Speaking to the client on her return from overseas - advising that we have now received the advice from counsel and we are awaiting the advice from Mr Glick.
I said that we would send her a copy of the advice and we would discuss the matter on Tuesday.
I really need to speak to Miriam before Tuesday to discuss the issue of the overseas funds.
Also speaking to Schlicht - he says we need to shorten the length of the relationship - I said that this is adverted to in our affidavit.
212 On 2 December 2016 the trial judge in the FCC ordered:
The respondent produce all documents in relation to any moneys held in the accounts in the United States since 2007.
213 On 14 February 2017 Ms Orwin's solicitor emailed her:
In relation to your US properties, you have not provided a Settlement Statement for 7450 S. Eastern, Las Vegas. Please provide ASAP.
In relation to the US trust properties, you have not provided me with a copy of the Trust Deed(s). Please provide ASAP for these properties, you have provided settlement statements. Given that they are trust properties, I don't propose to provide them with a copy of the settlement statements, just the Trust Deed(s).
Lastly, I am waiting for statements regarding moneys held in accounts in the US since 2007.
214 Subsequently, the plaintiff filed documents disclosing her property holdings in the United States since 2007.
215 Once Ms Orwin's counsel conceded that the financial agreement was ineffective it was unnecessary for Mr Sarah to further pursue the allegation of non-disclosure in the FCC. The critical issue relating to overseas assets became one of ascertaining the pool of assets potentially available as the subject of a property alteration order.
216 In this Court, counsel for Ms Orwin relied upon the order of the trial judge with respect to the provision of information as explaining the solicitor's file notes. Whilst the trial judge's order explains the background to the email set out above, it does not explain the earlier file notes. In particular, the first file note relates specifically to 'the reference to the money in the US 'in the draft affidavit. This in turn was directed to the allegation made by Mr Sarah in his affidavit that moneys were held in the United States at the time of the making of the financial agreement. Likewise, the second file note relates specifically to 'overseas funds'.
217 Ms Orwin's solicitor was not called to explain his file notes. No financial or taxation records were produced by Ms Orwin relating to income received in the United States and in Australia. Ms Orwin said she had destroyed all relevant records relating to the period in which the financial agreement was made.
218 Whilst Ms Orwin denied on oath that she held moneys in the US at the date of making of the financial agreement, I am troubled by the file notes.
219 It is true on the other hand that Mr Rickards did not call evidence from Mr Sarah as to the basis of his knowledge, information or belief concerning the funds allegedly held in the United States. The obvious reason for the decision not to call Mr Sarah as a witness in the proceeding has been addressed above. But once again his absence does not assist Mr Rickards.
220 In the circumstances, I would assess the risk with respect to non-disclosure at 20 per cent.
221 Next there was a risk that a s 90UC agreement would be set aside for undue influence.[48] The basis for that claim is asserted in the affidavits of Mr Sarah filed in the FCC. These were accepted in this Court as evidence of the making of the allegations contained in them but not as evidence of their truth. In essence Mr Sarah maintained that Ms Orwin dominated his daily life whilst he lived with her and bullied him and that he did not enter into the financial agreement freely.
222 Specific factual allegations made by Mr Sarah in his affidavits were put to Ms Orwin in cross-examination in this court and denied by her. Nevertheless in the hypothetical situation under discussion I am satisfied there was a risk Mr Sarah would have applied to the FCC to set aside any s 90UC agreement.
223 The leading case is Thorne v Kennedy.[49] In that case, Kennedy insisted that Thorne sign a prenuptial agreement shortly before their wedding. Thorne received strong legal advice that the agreement was inappropriate and that she should not sign it. Nonetheless, she signed the agreement. After the marriage, Thorne signed a postnuptial agreement in substantially similar terms to the prenuptial agreement. Less than four years after the marriage the parties separated. Thorne then commenced proceedings in the FCC seeking to have the agreement set aside together with orders for an alteration of property interests and a lump sum spousal maintenance order.
224 At first instance, the trial judge found that Thorne's circumstances led her to believe that she had no choice but to sign the agreements and was powerless. Her Honour set aside the agreement. As the plurality of the High Court explained,[50] the primary judge's finding was in effect that Thorne was deprived of the ability to bring a free choice to the decision as to whether to sign the agreement.
Miss Thorne's choices about entering the agreements on Mr Kennedy's terms were subordinated to the will of Mr Kennedy. Despite the strong advice from Miss Harrison, Miss Thorne accepted the terms of the agreements in part due to her 'reliance on Mr Kennedy for all things'. Although the primary judge described her conclusion as one of 'duress', for the reasons explained above her conclusion is more aptly described as one of undue influence. It was, therefore, unnecessary for the primary judge to assess the extent to which the pressure upon Miss Thorne came from Mr Kennedy as might be required for the adoption of duress. It was also unnecessary for the primary judge to consider whether, for the purposes of the doctrine of duress, the pressure that Mr Kennedy exerted upon Miss Thorne was improper or illegitimate. These are matters within the domain of duress rather than undue influence. Contrary to the reasoning of the Full Court, the failure of the primary judge to reach these conclusions was not an error.
225 Likewise, in the present case, the essential risk raised by the allegations made by Mr Sarah was one that the financial agreement would be set aside for undue influence. The same risk affected any s 90UC agreement in the terms hypothesised by Ms Orwin.
226 The risk arose from the view a court might take of the circumstantial evidence as a whole.[51] In Thorne v Kennedy, the plurality observed:
In the particular context of prenuptial and postnuptial agreements, some of the factors which may have prominence include the following:
(i) whether the agreement was offered on the basis that it was not subject to negotiation;
(ii) the emotional circumstances in which the agreement was entered including any explicit or implicit threat to end the marriage or to end the engagement;
(iii) whether there was any time for careful reflection;
(iv) the nature of the parties' relationship;
(v) the relative financial positions of the parties;
(vi) the independent advice that was received and whether there was time to reflect on that advice.
227 The evaluation of the risk (if any) to Ms Orwin in the present case is difficult. The most significant factors emerging from the evidence are:
(a) Ms Orwin was in a position of financial dominance in the relationship.
(b) Mr Sarah was not called to give evidence in this Court in support of the allegations made in the FCC but in the hypothetical situation in issue a court would ultimately be faced with a choice between the evidence of Mr Sarah and Ms Orwin as to the nature of their ongoing relationship.
(c) I have already explained why I am not persuaded Ms Orwin was a reliable witness as to this issue generally. Conversely the failure to call Mr Sarah on these matters obviously does not assist Mr Rickards. Despite this I decline to draw the further inference that the evidence of Mr Sarah would not have assisted Mr Rickards in this respect because the obvious reason for Mr Rickards not calling Mr Sarah is that he would have maintained the de facto relationship continued at the date of the financial agreement albeit that the relationship was one in which he had no independence.[52]
(d) Mr Sarah entered into the financial agreement after obtaining advice from Mr Connor and in the hypothetical situation would have obtained such advice before entering into a s 90UC agreement. For the reasons I have set out above I am not satisfied there is any satisfactory evidentiary basis for doubting that this advice was independent.
(e) Conversely insofar as it may be inferred from the evidence as a whole that the total benefit provided to Mr Sarah under the hypothetical s 90UC would be grossly inadequate, that fact may itself be regarded as an indicator of undue influence.[53]
228 Having regard to the above factors in the context of the evidence as a whole I conclude that there would be a 20 per cent risk that the hypothetical s 90UC agreement would be set aside. That risk is principally generated by the fact that despite a number of contextual circumstances favouring Ms Orwin, determination of the issue must ultimately involve resolution of the conflict between Ms Orwin and Mr Sarah as to the day to day nature of their relationship assessed in part in the context of the deal which the parties entered into.
229 In addition Ms Orwin's claim for loss of opportunity fell to be discounted for the risk that Mr Sarah may have succeeded in any event in making a claim for alteration of property interests despite a s 90UC agreement.
230 Such an agreement could not have prevented a claim with respect to property inherited from Ms Orwin's mother after the de facto relationship terminated.
First an issue has arisen in this appeal as to whether an entitlement based on contributions made to the welfare of the family can only be satisfied out of property available to the parties at the time the contribution was made. In my view, there is nothing in s 79(4)(c) or indeed else in the Act, or in the authorities to date, which would justify such a limitation. Again in my view, if such a limitation were to be applied in any particular case, its justification would have to be found in the generally worded limitation in s 79(2) that a court shall not make an order under s 79 'unless it is satisfied that in all the circumstances it is just and equitable to make the order'.
A property does not fall into a protected category merely because it is inherited. On the other hand if there are ample funds from which an appropriate property settlement can be made and a just result arrived at, then the fact of a recently acquired inheritance would normally be treated as the entitlement of the party in question.
The other party cannot be regarded as contributing significantly to an inheritance received very late in the relationship and certainly not after it has terminated, except in very unusual circumstances. Such circumstances might include the care of the testator prior to death by the husband or wife as the case may be or other particular services to protect a property.[59]
233 In Calvin & McTier the Full Court concluded that the court retains a discretion as to how to approach the treatment of after-acquired property.[60]
234 The difficulty for Ms Orwin in the present case is that on her own evidence Mr Sarah provided daily care to Ms Orwin's mother over a period of years commencing well prior to the cessation of the de facto relationship. Moreover the mother's estate was substantial and contributed to Ms Orwin's total property holdings at the date of trial in the FCC. These were estimated on a conservative basis by Mr Bartfeld to have a value of $11,872,986.
235 At the date of the FCC proceedings Ms Orwin owned two properties inherited from her mother:
• 60 Watsons Road, Glen Waverley which Ms Orwin valued at $450,000;
• 30 Canterbury Road, Heathmont which Ms Orwin valued at $420,000.
236 She had sold the Sebastopol Street property (also inherited from her mother) for $1,250,000 on 9 January 2014.
237 At various points in her evidence, Ms Orwin deposed to the kindness of Mr Sarah to her mother.
238 In my view even if a s 90UC agreement had been executed Ms Orwin faced a real risk that Mr Sarah would succeed in a claim directed to the property inherited by her which could not fall within the protection of the s 90UC agreement. Doing the best I can and having regard to the statutory context I would put this risk at 50 per cent with respect to 50 per cent of the settlement in the FCC.
239 Mr Rickards also contends that the hypothetical loss of opportunity falls to be discounted on the discrete ground of a risk that the s 90UC agreement would be set aside because Mr Sarah was not independently advised.[61] For the reasons I have explained, I am not satisfied the evidentiary basis for the postulated risk has been satisfactorily established.
240 Mr Rickards alleges that Mr Connor and Ms Ilias should be found proportionately liable for any damage in respect of which he is found liable for breach of duty.
241 Given that I have dismissed the claim for breach of duty against Mr Rickards no question of proportionate liability arises. Nevertheless for the sake of completeness, I record:
(a) there was no evidence of negligence on the part of Mr Connor; and
(b) there was no evidence of negligence on the part of Ms Ilias.
242 Insofar as Mr Connor is concerned, there is no satisfactory evidence of the nature of the advice given to Mr Sarah by him. Further, Mr Connor's duty of care with respect to such advice was owed in the first instance to Mr Sarah not Ms Orwin. Insofar as the giving of the certificate was concerned, no satisfactory basis for going behind such certificate has been established.
243 Insofar as Ms Ilias is concerned, she was expressly briefed on the basis that the de facto relationship between Mr Sarah and Ms Orwin had ceased at any earlier time. She settled a proposed financial agreement and advised on the basis of these instructions. The subsequent alteration of the agreement to record a continuing de facto relationship meant that the financial agreement reflected a fundamentally different fact situation than that upon which she advised.
244 When Ms Ilias advised in late December 2009, that the date of separation needed to be inserted in the draft financial agreement she also invited Mr Rickards to telephone her to discuss the draft further. No query was raised with her concerning her advice as to the need to specify the date of separation. Moreover, Mr Rickards failed to discuss with Ms Ilias the proposed change to the agreement which subsequently occurred despite knowing that de facto relationships were then governed by the FLA. There was no failure to take reasonable care on the part of Ms Ilias which caused the financial agreement to be defective.
245 At the date of the financial agreement, Ms Orwin was a practising barrister holding both undergraduate and postgraduate degrees in law. In my view, it was patent that the financial agreement did not provide for an outcome in the event of the future breakdown of the de facto relationship. Indeed it made no provision for future matters generally including the expected inheritance by Ms Orwin of her mother's estate. In this respect it did not comply with her express instructions.
246 In the circumstances, if I had found Mr Rickards negligent in failing to prepare an effective s 90UC agreement, I would also have found Ms Orwin contributorily negligent to the extent of 20 per cent.
247 Ms Orwin's claim fails first by reason of the limitation defence and secondly by reason of the threshold factual issue namely the failure to establish that she was in a continuing de facto relationship at the date of the financial agreement.
248 If my conclusions with respect to both these issues are incorrect, I would have found for Ms Orwin with respect to her claim for breach of duty and awarded damages comprising the costs thrown away by reason of payment to Mr Rickards and damages for loss of opportunity assessed at 30.7 per cent of the settlement sum agreed in the FCC.[62]
I certify that this and the sixty-nine preceding pages are a true copy of the reasons for judgment of Osborn JA of the Supreme Court of Victoria delivered on 7 June 2019.
[2] The claim is also pleaded in contract but it is accepted that this claim is statute barred.
[3] As to the notion of 'binding on the parties' see Fevia v Carmel-Fevia [2009] FamCA 816 [127]-[128] and [315].
[4] Section 90SM substantially mirrors s 79: Watson & Ling (2013) 99 FamLr 303. The scheme of s 79 was considered and explained by the High Court in Stanford v Stanford [2012] HCA 52; (2012) 247 CLR 108.
[5] Section 90SF relates to maintenance.
[7] See the definitions of 'property' and 'property settlement proceedings' in s 4 FLA.
[8] Cf cases such as Doggett v Commonwealth Bank of Australia [2015] VSCA 351; (2015) 47 VR 302.
[9] Senior v Anderson [2011] FamCAFC 129; (2011) 45 FamLR 540.
[10] [1992] HCA 55; (1992) 175 CLR 514 ('Wardley').
[11] Mason CJ, Dawson, Gaudron and McHugh JJ.
[12] [2018] VSCA 17 (Whelan and Santamaria JJA and T Forrest AJA). The judgment discusses Hawkins v Clayton (1998) 164 CLR 539; Murphy v Overton Investments Pty Ltd [2004] HCA 3; (2004) 216 CLR 388; HWT Valuers (Central QLD) Pty Ltd v Astonland Pty Ltd [2004] HCA 54; (2004) 217 CLR 640; Commonwealth of Australia v Cornwall [2007] HCA 16; (2007) 229 CLR 519; Winnote Pty Ltd v Page [2006] NSWCA 287; (2006) 68 NSWLR 531; Van Win Pty Ltd v Eleventh Mirontron Pty Ltd [1986] VicRp 49; [1986] VR 484; St George Bank Ltd v MJK Pty Ltd [1999] FCA 1752; Wardman v Hatfield [2003] NSWCA 283; Tranquillity Pools & Spas Pty Ltd v Huntsman Chemical Co Australia Pty Ltd [2011] NSWCA 75; Issa v Issa [2015] NSWSC 112; Dougall v Melville [2017] NSWCA 309; Hunt & Hunt Lawyers v Morgan Nominees Pty Ltd [2013] HCA 10; (2013) 247 CLR 613.
[15] Ibid 655 [28] (Gleeson CJ, McHugh, Gummow, Kirby and Heydon JJ).
[16] Heywood v Wellers [1975] EWCA Civ 11; [1976] QB 446.
[17] Wardley [1992] HCA 55; (1992) 175 CLR 514, 531.
[21] Unreported, Supreme Court of New South Wales, Cohen J, 25 November 1996.
[24] [2006] NSWCA 287; (2006) 68 NSWLR 531, 542 [59]-[61].
[25] See the judgment of Basten JA in dissent at [2006] NSWCA 287; (2006) 68 NSWLR 531, 555-6 [357]-[358].
[27] Ibid [19]-[20] (citations omitted).
[29] The evidence did not show exactly when this care commenced.
[30] The concept of living separately under the same roof is recognised by s 49 of the FLA.
[31] Subsequently she said that on reflection she had gone to the police on one occasion.
[33] I will return to this advice in due course.
[34] Spotlight Pty Ltd v NCON Australia Pty Ltd [2012] VSCA 232; [2012] 46 VR 1.
[35] See s 140(2) Evidence Act 2008; Briginshaw v Briginshaw [1938] HCA 34; (1938) 60 CLR 336, 361-2 (Dixon J).
[36] Boland v Yates Property Co Ltd [1998] FCA 8; (1998) 85 FCR 84; Wakim v McNally [2002] FCAFC 208; (2002) 121 FCR 162; Darvall McCutcheon v H K Frost Holdings Pty Ltd [2002] VSCA 85; (2002) 4 VR 570; Davy-Chiesman v Davy-Chiesman [1984] Fam 48.
[37] (1994) 179 CLR 332, 355 (Mason CJ, Brennan, Dawson, Toohey and Gaudron JJ).
[39] Section 117(1) FLA**.**
[40] Cf Badenach v Calvert (2016) CLR 440, 454 [40] (French CJ, Kiefel and Keane JJ).
[41] As to causation, see ss 51 and 52 Wrongs Act 1958.
[45] Cf Hoult v Hoult [2013] FamCAFC 109.
[46] See the observations of Hayne J (as his Honour then was) in St George Bank Ltd v Dunstan (Unreported, Supreme Court of Victoria, Hayne J, 10 November 1994).
[48] See generally Thorne v Kennedy [2017] HCA 49; (2017) 350 ALR 1.
[50] Kiefel CJ, Bell, Gageler, Keane and Edelman JJ.
[51] Thorne v Kennedy [2017] HCA 49; (2017) 350 ALR 1, 8-19 [59].
[52] Jones v Dunkel [1959] HCA 8; (1959) 101 CLR 298; O'Donnell v Reichard [1975] VicRp 89; (1975) VR 916.
[53] Thorne v Kennedy [2017] HCA 49; (2017) 350 ALR 1, 7 [18], 18 [56]. Kiefel CJ, Bell, Gageler, Keane and Edelman JJ.
[56] [2017] FamCAFC 125 [46] citing Farmer v Bramley [2000] FamCA 1615 [56].
[59] See James & James [1978] FamCA 10; (1978) FLC 90-487.
[60] [2017] FamCAFC 125 [51].
[62] Reflecting sequential discounts of 20 per cent, 20 per cent, 20 per cent and 25 per cent for the contingencies I have identified and a further 20 per cent discount for contributory negligence.
Orwin
Rickards [2019] VSC 375
(1991) 174 CLR 64
(1990) 169 CLR 638
(2012) 247 CLR 108
(2015) 47 VR 302
(2011) 45 FamLR 540
(1992) 175 CLR 514
(1998) 164 CLR 539
(2004) 216 CLR 388
(2004) 217 CLR 640
(2007) 229 CLR 519
(2006) 68 NSWLR 531
(2013) 247 CLR 613
(1938) 60 CLR 336
(1998) 85 FCR 84
(2002) 121 FCR 162
(2002) 4 VR 570
(1994) 179 CLR 332
(2014) 53 Fam LR 133
(2017) 350 ALR 1
(2017) 91 ALJR 1260
(2017) 56 Fam LR 559
(1959) 101 CLR 298
(1991) 105 FLR 102