Family law: December 2016

Financial agreements – wife alleged duress – ‘real difficulty’ was she had received legal advice

In Kennedy & Thorne [2016] FamCAFC 189 (26 September 2016) the Full Court (Strickland, Aldridge & Cronin JJ) allowed an appeal by the husband’s estate against Judge Demack’s decision to set aside financial agreements under s 90B and s 90C for duress under s 90K(1)(b). The parties met on a dating site (at [6]). The husband was a 67 year old property developer with assets of $18m (at [8]). The wife was 36 and lived overseas when the parties met. At separation after three years, the wife challenged the agreements. The husband died and his case was continued by his estate.

Citing authority, the Full Court said (at [71]-[74]: ‘[t]here needed to be a finding that the “pressure” was “illegitimate” or “unlawful”. It is not sufficient … that … [it] may be overwhelming … that there is “compulsion” or “absence of choice”… “[I]nequality of bargaining power” cannot establish duress. … In any event … [t]he … husband was at pains to point out to the wife from the outset that his wealth was his and he intended it to go to his children. The wife was aware of that … and … acquiesced … [T]he trial judge found that the wife’s interest lay in what provision would be made for her [if] the husband pre-deceased her … not what she would receive upon separation.‘

In declaring both agreements to be valid, the Full Court concluded (at [165]-[167]):‘[t]he fact that the husband required an agreement before entering the marriage cannot be a basis for finding duress. Nor can the fact that a second agreement was required… Again … it was not … the case that the agreements were non-negotiable. Changes were made by the wife through her solicitor, and … were accepted by the husband. However, the real difficulty for the wife in establishing duress is that she was provided with independent legal advice about the agreements, she was advised not to sign them but she went ahead regardless.’