s

Jacky Campbell, November 2015

A Porsche, a cemetery plot, $900,000 and the Sergeant Schultz defence: Lawyers sued for failure of cohabitation agreement

A husband is suing his lawyers because his cohabitation agreement was not validly executed[1]The Family Court ordered that his former de facto wife was entitled to retain the husband’s Porsche with a personalised number plate, his cemetery plot and $900,000 cash. His lawyers’ defence is reminiscent of Sergeant Schultz famous words from the television show Hogan’s Heroes – “I know nothing”.

In Supreme Court proceedings which have not yet been determined, the husband claims that his lawyers and his wife’s lawyers – who both deny the allegations – failed in their duty of care to him and were responsible for the cohabitation agreement being thrown out by the Family Court, which ultimately caused him financial losses.

In August 2005, the agreement was signed and witnessed by the parties’ cleaning lady, not a justice of the peace or a qualified solicitor as required by the legislation which governed cohabitation agreements in Queensland at the time. The husband also claimed his lawyers were liable for his losses because they failed to inform him of the need to make “full and frank disclosure of current assets” and the need to obtain legal advice before the agreement was signed.

The husband said that the couple separated in early 2010. In September 2011 a court declined to recognise the cohabitation agreement as a binding, legal document. The court ordered the husband to pay the wife $900,000 and transfer the cemetery plot and his Porsche 911 to her. He suffered the loss of the payout, $69,000 for the Porsche, a further $12,000 for its personalised number plates, $10,067 for the cemetery plot and almost $400,000 in legal fees.

In their Defence, the husband’s lawyers said they did not practise in family law and the onus was on the wife’s lawyers – who had family law expertise – to provide sound advice in connection with the agreement. They said that both the husband and the wife’s lawyers knew that the husband’s lawyers did not practise in family law and had no relevant expertise. The husband’s lawyers asserted that they exercised all “skill and reasonable care’ they possibly could, given their lack of family law expertise. In the alternative, they said it was not reasonable for the husband to rely on his lawyers’ advice because he knew that they lacked the relevant expertise. They also said the husband ignored their requests for a meeting to discuss the agreement and that he also failed to have it witnessed by a justice of the peace or a qualified solicitor when the requirement later became known to him.

The wife’s lawyers also denied any liability for the husband’s loss, claiming they owed no duty of care to him whatsoever.

The Family Court case

The family law proceedings were reported as Kevin & Trembath[2]. In those proceedings the agreement between the parties was declared to be:

  1. Not a recognised agreement within the meaning of s 266 of the Property Law Act 1974 (Qld);
  2. Not taken to be a Pt VIIIAB Family Law Act 1975 financial agreement within the meaning of item 88(1)(d) of the Family Law Amendment (De Facto Financial Matters and Other Measures) Act 2008 (Cth); and
  3. Not a binding financial agreement under Pt VIIIAB Family Law Act.

The legislation

Section 266 of the Property Law Act 1974 (Qld) states that a cohabitation agreement or separation agreement between de facto partners is a recognised agreement if it:

“(a)    is a written agreement; and

(b)    is signed by the de facto partners and witnessed by a justice of the peace (qualified) or solicitor; and

(c)    contains a statement of all significant property, financial resources and liabilities of each de facto partner when the de facto partner signs the agreement”.

Queensland referred its powers with respect to property division on the breakdown of de facto relationships from 1 March 2009. The Family Law Act recognises certain agreements made by the parties under the laws of certain States and Territories prior to that date as financial agreements under the Family Law Act.

Item 88 of the Family Law Amendment (De Facto Financial Matters & Other Measures) Act 2008 applies to pre-commencement agreements made during de facto relationships. Under item 88(2), an agreement made under a prescribed law, which includes the Property Law Act 1974 (Qld) is taken to be an agreement within s 90UC Family Law Act.

The trial judge’s decision

Murphy J said that the cohabitation agreement did not fall within the Family Law Act and did not stop the Family Court from exercising its powers under s 79. He said:

“The agreement, by its terms and by reference to the stated intention of each of the parties, was intended to be a ‘recognised agreement’ within the meaning of that legislation. The legislation distinguishes between agreements of that type and ‘cohabitation agreements’. It is only agreements of the former type that preclude property adjustment orders pursuant to that legislation being made” [3]

However, contrary to the requirements of the Queensland legislation the agreement was not witnessed by a solicitor or justice of the peace; rather it was witnessed by the parties’ cleaning lady at the time. The parties agreed that, despite their intentions and the terms of the agreement, the agreement made between them was not a “recognised agreement” within the meaning of the Property Law Act.

The relationship met the jurisdictional hurdles for de facto relationships under the Family Law Act in relation to the length of the relationship, separation date and geography.

The Family Court cannot make orders for the alteration of property interests in a de facto financial cause, if there is a Pt VIIIAB financial agreement that is binding upon the parties[4]. As the agreement was not a Pt VIIIAB financial agreement or taken to be one, the Family Court was not prohibited by s 90SA from making orders. The orders for adjustment of property interests between the parties were made by consent.

Of particular interest to the Supreme Court proceedings is that the wife consented to an order in the Family Court that she make herself available as a witness in any proceedings brought by the husband against the law firms who acted for each of the parties, with the husband to pay her reasonable travel and accommodation expenses and legal advice.

The defences of the law firms

The defences of the husband’s lawyers are relatively novel and contrary to the usual view that lawyers should practise in areas in which they have expertise. The Legal Practitioners’ Liability Committee of Victoria states on its website[5] that:

“Financial agreements are an ongoing problem when it comes to claims; it is certainly not an area in which to dabble!”

The defences of the husband’s law firm are primarily based on their lack of family law expertise. They say that the husband knew they lacked expertise and the wife’s lawyers knew this too. Their view is that both they and the husband relied on the expertise of the wife’s lawyers, who were experienced in family law matters.

This sounds like a defence based on Sergeant Schultz’s famous phrase in Hogan’s Heroes – “I hear nothing, I see nothing, I know nothing”. In the United States this is also known as the “dummy defence” or the “ostrich defence”. It has been used with little or no success in criminal cases in the United States.

Whether or not the wife’s lawyers will succeed in their defence will depend upon how far the Supreme Court is prepared to extend the duty of care owed by a lawyer to a third party. This question has been considered in such cases as Hill v Van Erp [6]. There are reported cases where one party has sought to claim against the other party’s lawyer in negligence in relation to financial agreements under the Family Law Act [7], but there are no reported decisions of a successful claim.

What next?

Although the agreement purported to be a “State” agreement entered into before Queensland referred its powers to the Commonwealth, the outcome will be relevant to lawyers acting for parties in negotiations for, the drafting of and the execution of, financial agreements under the Family Law Act.

Will the Sergeant Schultz defence succeed? If it does succeed, experienced family lawyers should refer their clients who want financial agreements to non-family lawyers. This is contrary to the usual view that lawyers should be wary about working in areas in which they do not have the relevant skills and experience.

For non-family lawyers who advise on financial agreements, if the husband is successful in his claim against his lawyers, the case demonstrates the significant risks of practising outside areas in which they have expertise. At the very least, they should read and follow the requirements of the relevant legislation.

[1]    The Australian, 18 November 2015

[2]    [2012] FamCA 807

[3]    at para 6

[4]    s 90SA

[5]    http://lplc.com.au/risk-management/family-law/

[6]    [1997] HCA 9

[7]    e.g. Noll & Noll [2011] FamCA 87, Noll & Noll (2013) FLC 93-529, Ruane & Bachmann-Ruane [2012] FamCA 369 and F Firm & Ruane (2014) FLC 93-611)

Jacky Campbell

Partner

University qualifications

Master of Laws, Monash University

Bachelor of Laws, Monash University

Bachelor of Arts, Monash University

Graduate Diploma of Professional Writing, Deakin University

Other qualifications
Accredited Family Law Specialist,
Law Institute of Victoria

Email Jacky Campbell
jcampbell@fortefamilylawyers.com.au

Connect on LinkedIn

Publications
To read Jacky Campbell’s articles and papers click here.

In 2020, Jacky was recognised as a leading family lawyer in Melbourne by Doyle’s Guide to the Australian Legal Market as well as one of Melbourne’s leading family lawyers in High-value and Complex Property matters, and a recommended lawyer in parenting matters. Jacky was also a recommended lawyer in the Doyle’s leading family and divorce lawyers in Australia. Jacky writes extensively on complex aspects of family law and her up-to-date knowledge means that she is able to provide accurate information about the law. She combines this with offering strategic advice to clients and guidance as to the best approach to take in their particular circumstances.

Jacky wrote her Masters thesis on the relationship of bankruptcy and family law. She continues to have a special interest in matters involving bankruptcy, insolvency, liquidation and receivership.

Jacky received the Law Institute of Victoria Rogers Legal Writing Award 2004—for the article “Splitting the Super…and Selling the Home”. She is experienced with complex superannuation interests such as defined benefit funds and self managed superannuation funds.

Jacky is the consultant editor of Wolters Kluwer/CCH Australian Family Law and Practice and contributing author to Wolters Kluwer/CCH Australian Family Law and Practice to the Property, Spousal Maintenance, Financial Agreements, Maintenance Agreements, Procedure and Precedents tabs. She writes several chapters of the Wolters/Kluwer CCH Australian Master Family Law Guide, and is the author of the family law chapters in the Thomson-Reuters Australian Financial Planning Handbook and in the CCH Australian Master Superannuation Guide.

Jacky is a Fellow of the International Academy of Family Lawyers, a board member of the Asia Pacific Chapter of that Academy, and an Associate of the American Bar Association. She acts for many clients who are overseas or where there is an international element such as overseas assets and international child abduction under the Hague Convention. She is also experienced in Australian and overseas surrogacy arrangements and in disputes about the role of a sperm donor. She is a member of the Maintenance and Property Committee of the Family Law Section of the Law Institute of Victoria, the Family Law Section of the Law Council of Australia and Victorian Women Lawyers.

Jacky is keen to assist clients to resolve matters before trial through alternative dispute resolution processes including mediation. She is a trained arbitrator and is an arbitrator with The Alternative Courtroom.

Wendy Kayler-Thomson

PARTNER

University qualifications

Master of Laws, Monash University

Bachelor of Laws, University of Melbourne

Bachelor of Commerce, University of Melbourne

Other qualifications
Accredited Family Law Specialist, Law Institute of Victoria

Email Wendy Kayler-Thomson
wkaylerthomson@fortefamilylawyers.com.au

Connect on LinkedIn

Wendy Kayler-Thomson is a partner of Forte Family Lawyers and has practised as a lawyer specialising in family law for more than 25 years. Wendy is recognised as one of Melbourne’s leading family lawyers in Doyle’s 2020 Guide to the Australian Legal Market.

Wendy is the Immediate Past Chair of the Family Law Section of the Law Council of Australia, the peak body for Australian family lawyers, and has been a member of the Executive of the Family Law Section for more than 10 years. The Family Law Section is regularly consulted by the Federal government and the Courts about changes to family law and court procedures. As a result, Wendy is able to offer her clients the most up to date advice on family law and strategies to take advantage of future changes.

Wendy’s time as Chair of the Family Law Section (from 2016 to 2018) coincided with a period of great controversy and unprecedented attention on the reform of family law and the family law system. This included the Victorian Royal Commission into family violence, the Federal Parliamentary enquiry into the family law system and family violence, the Australian Law Reform Commission’s Family Law Review and the Federal Government’s proposal to restructure the Family Court and Federal Circuit Court.

Wendy was a member of the Advisory Committee to the Australian Law Reform Commission’s Family Law Review, the most comprehensive review of family law and the family law sector in 40 years.

Wendy was also a member of the Advisory Committee to the Law Council of Australia’s 2018 Justice Project, chaired by former High Court of Australia Chief Justice, the Hon. Robert French. The Justice Project is one of the most comprehensive, national reviews into the state of access to justice in Australia in the past 40 years.

Wendy develops close and trusted relationships with her clients and the wide network of professionals that refer her work. Wendy’s approach is tailored to each individual client’s needs, recognising that for most people, the breakdown of a relationship is one of their most stressful and challenging experiences. Wendy brings a high attention to detail, strategic advice and a depth of expert knowledge about family law. Wendy has a commercial background and has acted for many clients with complex financial arrangements. She works closely with her clients’ accountants and other professional advisors to ensure that all the complexities of those arrangements, including tax impacts and restructuring, are dealt with as part of any settlement.

Wendy has undertaken extensive training in a wide range of social sciences that impact on families and their children, including family and domestic violence, parental alienation, personality disorders, drug and alcohol addiction and high conflict. Wendy’s clients benefit from her knowledge of the most up to date approaches by child psychologists and other experts to managing the post-separation care arrangements of children. Wendy has particular expertise in cases where one parent wants to relocate with the children interstate or overseas.

Wendy is also a member of the Executive Committee of the Family Law Section of the Law Institute of Victoria, the Family Law Section of the Law Council of Australia, the Association of Family and Conciliation Courts, the Australian Institute of Family Law Arbitrators and Mediators and Victorian Women Lawyers.

Jemma Mackenzie

Senior Associate

University qualifications

Bachelor of Laws (Hons) Monash University
Bachelor of Arts (Hons) Monash University

Email Jemma Mackenzie
jmackenzie@fortefamilylawyers.com.au

Other qualifications
Accredited Family Law Specialist,
Law Institute of Victoria

Connect on LinkedIn

Jemma is a Senior Associate at Forte Family Lawyers. She has worked predominantly in family law since being admitted to legal practice in December 2009.

Jemma obtained Specialist Accreditation as a Family Lawyer from the Law Institute of Victoria in 2015. Accreditation recognises the high level of knowledge and practical skills Jemma brings to each family law matter.

Jemma is mindful that the breakdown of a marriage or de facto relationship can be a stressful and often overwhelming experience for clients. She works with her clients to identify appropriate pathways for resolving both parenting and property matters.

Jemma prides herself on her ability to effectively communicate what can be complex legal principles and to provide realistic, up to date and accurate legal advice at each stage of a matter.

Jemma has experience in a wide variety of family law matters including division of property, maintenance (including urgent applications), Financial Agreements (including Agreements made prior to marriage), care and living arrangements for children, child support and family violence – including Intervention Order proceedings.

Prior to joining Forte Family Lawyers, Jemma worked in a Bayside family law firm and a boutique firm in Melbourne’s eastern suburbs. She has conducted litigation in both the Family Court of Australia and Federal Circuit Court in Melbourne and interstate.

In addition to her daily work with clients, Jemma has made presentations to financial advisors and medico-legal professionals about the family law system in Australia and what clients should know about family law prior to separating.

Jemma is a member of Victorian Women Lawyers, the Family Law Section of the Law Council of Australia and the Family Law Section of the Law Institute of Victoria.

Jane Bentley

Senior Associate

University Qualifications

Masters of Applied Law (Family Law), College of Law

Bachelor of Laws, Victoria University

Bachelor of Science, University of Melbourne

Email Jane Bentley

jbentley@fortefamilylawyers.com.au

Other Qualifications

Accredited Family Law Specialist, Law Institute of Victoria

Jane is a Senior Associate at Forte Family Lawyers. Jane is an Accredited Family Law Specialist as a recognised by the Law Institute of Victoria. Accredited Specialists demonstrate superior knowledge, experience and proficiency in their specialist area of law.

Additionally, Jane has undertaken a Masters of Applied Law in Family Law.

Prior to joining the firm, Jane has worked in both the private and community sectors where she worked on both complex parenting and property matters, regularly appeared in the Family Law Courts and through her work at a commercial firm Jane was able to build and enhance her commercial skills. Throughout her career, Jane has worked collaboratively with commercial lawyers providing advice where both family and commercial law intersect, as well as working directly with professionals on family law matters including psychologists, mediators, accountants and financial advisors.

Jane has a wide range of experience in different family law matters including financial agreements, family violence, parenting, IVF issues, matters involving grandparents, Hague Child Abduction Convention, child support, property and spousal maintenance.

Jane prides herself on her ability to communicate effectively with her clients during an emotional and challenging time. Jane builds strong relationships with her clients as she recognises that the legal system can appear complex and daunting and works with her clients to guide them through the process.

Jane is a member of the Courts Practice and the Property and Maintenance Committees of the Law Institute of Victoria which ensures that she is appraised of recent developments in family law and at the Family Law Courts. Jane is also a member of the Family Law Section of the Law Council of Australia.

Matthew Beckmans

Senior Associate

University qualifications

Bachelor of Laws, University of Western Sydney

Email Matthew Beckmans
mbeckmans@fortefamilylawyers.com.au

Connect on LinkedIn

Matthew commenced his legal career practising in a medium-sized rural law firm. Matthew is able to draw on his broad experiences over a number of practice areas, prior to practising exclusively in family law, to offer clients a well-rounded approach to tactically resolve complex legal issues.

Matthew has developed a special interest in complex disputes involving companies and trusts, insolvency and bankruptcy, taxation, and international/domestic relocation.  He also has a particular expertise in child support.

Matthew is aware and mindful of the financial challenges and restraints when attempting to resolve family law disputes, and sets out to achieve negotiated and cost effective outcomes which avoid court where possible. Matthew recognises the emotional issues attached to the breakdown of a relationship, and draws on his strong communication skills in demystifying the family law process, and to identify and explain possible options for resolution in a concise manner.

Matthew was a member of the steering committee of the Riverina Family Law Pathways Network, secretary of the South West Slopes Law Society, and a mock trial magistrate for the Law Society of New South Wales.

Prior to practising law, Matthew was rookie listed by the Sydney Swans, where he enjoyed a brief career.  He now plays for the Monash Blues in the VAFA.

Matthew is a member of the Family Law Sections of the Law Council of Australia and the Law Institute of Victoria.  He is on the Court Practice Committee of the Family Law Section of the Law Institute of Victoria.

Vinh Nguyen

Associate

University qualifications

Bachelor of Laws, Deakin University

Bachelor of Commerce, Deakin University

Email Vinh Nguyen
vnguyen@fortefamilylawyers.com.au

Connect on LinkedIn

Vinh first worked at Forte Family Lawyers as part of his Graduate Diploma in Legal Practice at the Leo Cussen Institute for Law in 2017. He joined Forte Family Lawyers as a lawyer after his admission into legal practice in October 2017 and has, since then, worked solely in family law.

Prior to his admission as a lawyer, Vinh worked as a paralegal in a community legal centre and in a property and commercial law firm, where he gained valuable experience in property transactions.

Vinh is a member of the Family Law Section of the Law Council of Australia, the Law Institute of Victoria and the Asian Australian Lawyers’ Association. Vinh also volunteers at the Darebin Community Legal Centre.

Vinh is fluent in Vietnamese.

 

 

 

Natasha Mastroianni

Associate

University Qualifications

Bachelor of Laws (Hons), Latrobe University

Bachelor of Arts, Latrobe University

Masters of Applied Law (Family Law), College of Law

Email Natasha Mastroianni

nmastroianni@fortefamilylawyers.com.au

 

 

Connect on LinkedIn

Natasha Mastroianni has experience in a range of family law matters, including property settlements, financial agreements, parenting matters (including interstate and overseas relocation issues), child support and intervention order proceedings.

Natasha was admitted to practice in August 2014 and commenced her career in a generalist practice where she gained experience in family law, property law, wills and estates. Natasha worked in a boutique family law practice prior to commencing at Forte in February 2020.

Natasha has a Masters of Applied Law (Family Law) from the College of Law and speaks conversational Italian.

Having practical experience in other areas of law assists Natasha to understand the interrelated issues involved in her clients’ family law matters. She regularly appears on behalf of clients at Duty List Hearings and other Court events in the Federal Circuit Court, Family Court of Australia and the Magistrates’ Court of Victoria. Natasha also appears as a solicitor agent for interstate or rural practitioners when required.

Natasha prides herself on being able to understand and manage her clients’ expectations whilst providing realistic and practical advice. She acts with empathy and compassion when striving to achieve the best possible results for her clients.

Natasha is a volunteer lawyer with the Women’s Legal Service and is the Vice President of the Northern Suburbs Law Association. She is also a member of the Courts Practice Committee of the Family Law Section of the Law Institute of Victoria, the Family Law Section of the Law Council of Australia and Victorian Women Lawyers.

Mark Di Donato

Lawyer

University Qualifications

Bachelor of Criminology and Justice, Navitas College of Public Safety

Juris Doctor, Monash University

Email Mark Di Donato

mdidonato@fortefamilylawyers.com.au

Connect on LinkedIn

Mark started work at Forte Family Lawyers as part of his Graduate Diploma in Legal Practice at the Leo Cussen Institute for Law in 2019. Mark was later admitted into the legal practice in September 2019 and transitioned into a lawyer role with Forte Family Lawyers in February 2020.

Prior to his admission as a lawyer, Mark volunteered as a paralegal at Darebin Community Legal Centre and interned at a commercial law firm, where he gained valuable experience in property transactions and in intellectual property. Mark also completed a Professional Placement whilst completing his law degree where he provided legal advice on various family law matters through the Monash Law Clinic.

Mark is a member of the Family Law Section of the Law Council of Australia, and the Law Institute of Victoria. Mark volunteers at the Darebin Community Legal Centre and has provided advice on a range of issues including family law.