In March 2015 the Federal Circuit Court set aside two Agreements that had been entered into by Ms Thorne and Mr Kennedy both before and after their marriage.
Mr Kennedy was a 67 year old Property Developer with assets of somewhere between $18 to $24 million dollars. He met Ms Thorne on an internet website. At that time, mid-2006 Ms Thorne was a 36 year old living overseas with minimal assets. She relocated to Australia. The parties got on and decided to marry. Ms Thorne wanted to have children.
Before the wedding Mr Kennedy instructed his Solicitors to prepare a Financial Agreement (Pre-nuptial Agreement). The proposal was that the Pre-Nuptial would be signed and then that Agreement required a further Agreement would need to be signed after the wedding.
Shortly before the wedding Ms Thorne received the Agreement which disclosed the extent of Mr Kennedy’s assets. She saw a Solicitor in relation to the Agreement, and, according to Ms Thorne the Solicitor told her it was “the worst contract I have ever seen. Don’t sign.” The Solicitor gave a lengthy written advice in relation to the Agreement in which the Solicitor noted “I hold significant concerns that you are only signing this Agreement so that your wedding will not be called off.”
Contrary to that advice, Ms Thorne signed the first Agreement and the wedding went ahead.
The second Agreement was then prepared and around a month or so after the wedding Ms Thorne again discussed it with her Solicitor. The Solicitor gave the same overall advice that the Agreement was terrible and she should not sign it. Ms Thorne signed. The parties remained married for just short of 4 years. They cohabited all up for about 4 ½ years.
On separation the wife challenged the Agreements under the Family Law Act – Section 90K. In setting aside the Agreements the Court noted that:-
If the relationship ended, the wife would have nothing. No job, no visa, no home, no place, no community.
Every bargaining chip and every power was in Mr Kennedy’s hands. Either the document as it was, was signed or the relationship was at an end. The husband made that clear.
Mr Kennedy knew that Ms Thorne wanted to marry him. For her to do that, she needed to sign the document. He knew that she would do that. He didn’t need to consider offering something different or more favourable to Ms Thorne. If she wanted to marry him, which he knew her to want, she must sign.
The Court then found that in the circumstances, the wife signed the first Agreement under duress and that it was a duress borne of inequality of bargaining power where there was no outcome available to the wife that was fair or reasonable and that the wife had no bargaining, nothing to persuade a different outcome, no capacity to effect any change.
The Court found that like the first Agreement, the second Agreement was also inoperative as signed under duress.
The Court ordered the husband to pay the wife’s costs.
In November 2015, an appeal was heard in the Full Court of the Family Court in Brisbane and in December 2016, the appeal was upheld on the ground that the wrong legal test had been used to establish duress. The Full Court said that the correct test for duress is whether there has been threatened or actual unlawful conduct. There needed to be a finding that the pressure was ‘illegitimate’ or ‘unlawful’. Compulsion, absence of choice or inequality of bargaining power was found not to be enough to prove duress.
On 10 March 2017, special leave to appeal to the Full Court of the High Court was granted to Mrs Thorne (Appellant Wife). The Respondents are now the adult children of the husband, Mr Kennedy, who has since deceased. The grounds of appeal include whether the Full Court of the Family Court erred in their approach to undue influence, unconscionable conduct and inadequate reasons of the Trial Judge.