Husband Opposes Financial Agreement

Johanson & Johanson [2022] FedCFamC1A 74 (20 May 2022)

The husband filed an appeal against orders dismissing an application to have a financial agreement declared non-binding.  The primary judge found that the husband had received the requisite independent legal advice and declared that the financial agreement was binding.  The Court, in determining whether there are errors in the finding of the primary judge, assessed his regard to the parties' evidence.

Facts:

By Notice of Appeal filed 14 September 2021, Mr. Johanson (“the husband”) appeals against orders made on 19 August 2021 by a judge of the Family Court of Australia (as this Court was then known) dismissing the husband’s application seeking a declaration that a financial agreement entered into between the parties dated 22 January 2014 (“the financial agreement”) was not binding.  The primary judge also made a declaration that the financial agreement was binding upon the parties.  

The husband contends that the primary judge erred in finding that the husband received “independent legal advice” before he signed the agreement (Ground 1).  The husband maintains (in Ground 2) that the primary judge “failed to properly consider” certain evidence and the husband says (in Ground 3) that the primary judge “failed to give adequate reasons” as to why he preferred the evidence of Mr. N (the husband’s former solicitor) ahead of the husband’s own evidence.  Ground 4 contained in the Notice of Appeal maintains that the primary judge erred in making the declaration as to the binding nature of the financial agreement.

The parties married in September 1989 and separated on a final basis in February 2013.  A divorce order was made in the Federal Circuit Court of Australia (as it was then known) on 7 May 2014 and the order became absolute on 8 June 2014.  The parties negotiated for many months from May 2013 until the signing of the financial agreement on 22 January 2014.  The financial agreement provided (inter alia) for a division of the parties’ property and superannuation assets, as well as ongoing spousal maintenance to be paid by the husband to the wife.

This maintenance was to be paid in the sum of $130,000 per annum in monthly installments of $10,833 until the husband reached the age of 64 (which would not occur until May 2026).  There was a clause allowing for this payment to be reduced should the husband’s income, net of tax, fall below $260,000 in a financial year prior to him turning 64 years of age.  The financial agreement also provided that the husband was to continue paying the premiums on a life insurance policy to which the wife was the beneficiary until he attained 64 years of age.  The financial agreement came into effect on 22 January 2014 and the husband commenced making the spousal maintenance and other payments in accordance with his obligations under the agreement. 

In November 2016 the husband ceased the payment of the premiums for the life insurance policy.  In April 2017 the husband ceased payment of the monthly spousal maintenance.  This precipitated the wife bringing enforcement proceedings by an Initiating Application filed on 3 July 2017 in the Family Court of Australia (as it was then known).  The husband sought (by way of an Amended Response to the Initiating Application filed 9 March 2018) a declaration that the parties had abandoned the financial agreement by their conduct. 

That interlocutory application was heard and dismissed by another judge of the Family Court of Australia, with orders and reasons for judgment delivered on 23 May 2018.  The proceedings were then adjourned for the allocation of further trial dates, and ultimately, the balance of the husband’s Amended Response became the subject of a hearing before the primary judge.  The primary judge delivered his reasons and orders on 19 August 2021, dismissing the husband’s application and the proceedings were then adjourned for a further case management hearing before the primary judge for directions in respect of the wife’s application for the enforcement of the financial agreement.

Issue:

Whether or not the appeal should be granted.

Applicable law:

Family Law Act 1975 (Cth) s 90G - sets out the circumstances in which a financial agreement is binding on the parties. 

AMS v AIF (1999) 199 CLR 160; [1999] HCA 26 -provides that an appellate court, invited to review the exercise of discretion at first instance will avoid an overly critical, or persnickety, analysis of the primary judge's reasons, given the large element of judgment, discretion, and intuition which is involved.

Analysis:

A review of the primary judge’s reasons reveals that his Honour referred to certain evidence, including the evidence of Mr. N – which his Honour clearly accepted; his Honour referred to the husband’s evidence and noted the concessions made by the husband, and his Honour made various findings based upon the evidence.  There are references to certain evidence that was obviously accepted by his Honour and included evidence of advice given by Mr. N to the husband concerning the effect of the financial agreement on the husband’s rights and also included evidence of advice provided by Mr. N to the husband about the advantages and disadvantages to the husband of making the agreement.  His Honour made findings based on all of the evidence.

The primary judge devoted approximately three pages to his reasons summarising aspects of the husband’s evidence.  The fact that the trial judge did not “refer” to particular parts of the husband’s evidence does not mean that the trial judge failed to “consider” those parts of the husband’s evidence. 

His Honour was not required to specifically refer in his reasons to each item of evidence provided by the losing party and provide reasons as to why that part of the losing party’s (the husband’s) evidence was not accepted by the Court.   

Conclusion:

The appeal is dismissed.  The appellant should pay the respondent’s costs of the appeal fixed in the sum of $19,553.33.