Property – threshold hearing – binding financial agreement…

…solicitors falsely witnessing agreement

In proceedings Pagani & Pagani [2023] FedCFamC2F 805 before the Federal Circuit and Family Court of Australia, a financial agreement was set aside for non-compliance with s90G of the Family Law Act 1975 (Cth) (the Act).

The court found the solicitor who acted for the respondent in the financial agreement transaction had failed to deliver legal services competently and diligently in falsely witnessing the respondent’s signature.

Issues before the court

The application related to a series of transactions relating to the preparation and execution of a financial agreement between the applicant wife and respondent husband. The court was required to consider whether the agreement was compliant with s90G (1) of the Act, and if not, whether it should be declared binding having regard to s90G(1A) or be otherwise set aside.

Conduct of the respondent’s solicitor

The circumstances of the execution of the agreement came into sharp focus during the hearing when the respondent’s solicitor advised the court that he had executed the agreement as having witnessed the respondent’s signature, despite not actually seeing the respondent sign the agreement.

In cross-examination, the solicitor then confirmed that he had not received instructions from the respondent in the intervening period between the time of sending a letter to the applicant’s solicitor with their proposed amendments and receiving an amended agreement (some months later); did not discuss the amended agreement with him; or provide any advice in relation to the agreement.

The court considered that in these circumstances, the solicitor should have spoken with his client and given legal advice on the final form agreement,¹ as required in ss90G(1)(b) and 90G(1)(c) of the Act.

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Had the solicitor prudently done so, it would have been obvious to the solicitor that the agreement was also incomplete. This failure was described as a dereliction of his duty to deliver legal services competently and diligently and to protect his client’s rights.²

Conduct of the appellant and her solicitor

The court dismissed the wife’s claim to equitable relief in finding that the wife did not come to the court seeking equity with ‘clean hands’.³ In executing a clearly incomplete agreement that failed to set out the husband’s assets and liabilities, the court considered that the applicant and her solicitor had adopted an attitude that was one of ‘that’ll do’ or ‘near enough is good enough’.⁴

The applicant’s solicitor should have forwarded the amended agreement to the respondent’s solicitor for review after they made amendments to it.

They instead sent the agreement to the wife for execution and subsequently also falsely witnessed her signature.

The court acknowledged that, “feigning ignorance or taking advantage of the husband’s position where the solicitors acting on his behalf were clearly mistaken when they suggested in their letter that he did not own any property is not sufficient”.⁵ The circumstances of the execution of the agreement by the parties and their solicitors was described as nothing short of diabolical.⁶

Orders

The court set aside the agreement between the parties and declared it to be not binding.

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Footnotes
¹ Pagani & Pagani [2023] FedCFamC2F 805, [43].
² Ibid [44].
³ Ibid [51].
⁴ Ibid [58].
⁵ Ibid [54].
⁶ Ibid [58].