Monday, 1 June 2009

Danger of property mediation and agreements without legal advice: part 2

The recent Queensland case of SPD v DRH was a standout of pressure by one party on the other to force the other to get paid a minimal amount. It showed clearly the steps to which the de facto wife would stoop, including a 2006 agreement to transfer the house to her (and giving her 90% of the property) and in 2007 dragging the de facto husband to Relationships Australia for mediation, where, without the benefit of legal advice he agreed to get only $5,000. He received $260,000 at trial.

The de facto wife was clearly dissatisfied with the result,by appealing.

The appeal was unsuccessful. Keane JA (with whom the other members of the Queensland Court of Appeal agreed) held that the appeal was "entirely without substance."

His Honour stated:

First, it was said in the written submissions made on behalf of Ms DRH that
the 2006 transfer reflected a clear intention on the part of the parties that Ms
DRH should be entitled to the house. It is said that the absence of any
reference to the termination of the parties' relationship does not detract from
the clarity of the parties' expression of that intention. It was argued that
this Court should, pursuant to s 277 of the Act, give effect to that intention by excising the house from the pool of assets subject to adjustment. This argument should be rejected.

[44] It was for the learned primary judge to determine what weight he
should give to the context in which the 2006 transfer was executed. It is
apparent that, while his Honour made no specific finding to the effect that Mr SPD
had been acting under undue influence from Ms DRH in executing the transfer, his
Honour was troubled by the disadvantageous effect of this transfer from Mr SPD 's
viewpoint which was explicable only by Ms DRH's dominant position in the
relationship and Mr SPD 's desire to preserve it. One can readily understand that, in making the discretionary assessment required by s 277(2) and (3) of the Act,
his Honour was not disposed to aid Ms DRH's determined effort to expropriate Mr SPD 's equity in the house.

[45] As to the 2007 agreement which was signed under the benevolent
auspices of Relationship Australia, it is argued on Ms DRH's behalf that the
operative provisions of the agreement reflect an agreement to split the pool of
the parties' assets – including the house – 72.5/27.5, and that any order made
under Pt 19 of the Act should reflect that intention.

[46] Once again, it must be acknowledged that it is readily understandable
that the learned primary judge was not disposed to give any effect at all to an
agreement which was so plainly unfair to Mr SPD
and the premises of which were so bizarre that the written submissions filed in
this Court on Ms DRH's behalf conceded that they were rightly described as
"absolute nonsense".

[47] The second ground of Ms DRH's challenge to the decision on appeal is
without substance....

Ms DRH complains that the learned primary judge failed to accord
appropriate weight to the non-financial contributions of the parties or to their
contributions to family welfare. In particular, Ms DRH focuses upon his Honour's
observations that "... this was not a case where [Ms DRH] did not work and did
everything around the house, thereby significantly improving [Mr SPD 's]
capacity to earn income", and that Ms DRH's "contribution to his earning income
and in turn to his superannuation, as I have said, was not significant."

[49] Ms DRH attributes to his Honour the view that:
"a wife (usually) who does not work and therefore does 90%
of the household duties and makes 90% of the contributions to family welfare
makes a significant contribution and yet a wife who works, but still contributes
the vast majority of household and family welfare contributions does
not." That view is plainly erroneous. It would be a grave – and obvious –
error if the submission made on Ms DRH's behalf were accurate. But this
submission is not accurate.
[50] The learned primary judge found that the
parties shared household tasks and that Ms DRH made a greater overall
contribution to work around the house. But his Honour went on expressly to find
that Ms DRH's contributions were not at a level which required recognition that,
overall, their total contributions were not equal. That his Honour took such an
approach is hardly surprising given that there were no dependent children of the
relationship to be cared for, that both parties were in paid employment, and
that Mr SPD 's financial contributions vastly outstripped those made by Ms DRH. Moreover, and importantly, Ms DRH had, by her surreptitious misappropriation of joint funds, improved her financial position to the substantial disadvantage of Mr SPD . The learned primary judge would have been understandably reluctant to crown Ms DRH's dishonesty with further success.

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