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Thorne v Kennedy

High Court [2017] HCA 49

Overview

The appellant (known as Ms Thorne) was a 36 year old woman from overseas who married a 67 year old property developer in Australia (known as Mr Kennedy).

The subject of the litigation involved a pre-nuptual agreement provided shortly prior to their wedding. Kennedy (who had assets worth between $18-$24m) had told Thorne (who had no substantial assets) that if she did not sign the wedding would not proceed.

Thorne signed the agreement notwithstanding the advice of an independent solicitor that the agreement 'entirely inappropriate'. Thorne also signed a further post-marriage financial agreement, also against legal advice.

Questions arose as to whether the agreement was made under duress, undue influence or as a result of unconscionable conduct.

The trial judge found that the agreements resulted from duress and undue influence.

The Full Family court overturned the ruling of the trial judge.

The High Court unanimously allowed the appeal:

  • Chief Justice Kiefel and Justices Bell, Gageler, Keane and Edelman (and separately Justice Nettle) held that the contract was voidable for undue influence (actual, not presumptive) and unconscionable conduct.
  • Justice Gordon held that there had been unconscionable conduct, but no undue influence.

Bride signing paper

Facts (brief)

The appellant (known as Ms Thorne) was a 36 year old woman from overseas who married a 67 year old property developer in Australia (known as Mr Kennedy).

The subject of the litigation involved a pre-nuptual agreement provided shortly prior to their wedding. Kennedy (who had assets worth between $18-$24m) had told Thorne (who had no substantial assets) that if she did not sign the wedding would not proceed.

Thorne signed the agreement notwithstanding the advice of an independent solicitor that the agreement 'entirely inappropriate'. Thorne also signed a further post-marriage financial agreement, also against legal advice.

The plurality in the High Court referred to the primary judge's findings as follows:

[para 47] The primary judge set out six matters which, in combination, led her to the conclusion that Ms Thorne had "no choice" or was powerless: (i) her lack of financial equality with Mr Kennedy; (ii) her lack of permanent status in Australia at the time; (iii) her reliance on Mr Kennedy for all things; (iv) her emotional connectedness to their relationship and the prospect of motherhood; (v) her emotional preparation for marriage; and (vi) the "publicness" of her upcoming marriage. These six matters were the basis for the vivid description by the primary judge of Ms Thorne's circumstances:

"She was in Australia only in furtherance of their relationship. She had left behind her life and minimal possessions ... She brought no assets of substance to the relationship. If the relationship ended, she would have nothing. No job, no visa, no home, no place, no community. The consequences of the relationship being at an end would have significant and serious consequences to Ms Thorne. She would not be entitled to remain in Australia and she had nothing to return to anywhere else in the world.

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."

 

 

High Court

Chief Justice Kiefel and Justices Bell, Gageler, Keane and Edelman

Found that there was actual undue influence [62] and that Thorne was subject to a special disadvantage known to Kennedy when entering into the contract and partly crated by him [64-64]

Duress

It was not necessary to make a finding on the point of duress.

[para 26] 'The vitiating factor of duress focuses upon the effect of a particular type of pressure on the person seeking to set aside the transaction. It does not require that the person's will be overborne. Nor does it require that the pressure be such as to deprive the person of any free agency or ability to decide. The person subjected to duress is usually able to assess alternatives and to make a choice. The person submits to the demand knowing "only too well" what he or she is doing. ...

[para 27] Historically, the primary constraint upon an action based on duress was the threats that were recognised as sufficient for an action. The early common law rule was that the duress which was necessary to set aside an agreement required an unlawful threat or conduct in relation to the person's body, such as loss of life or limb. ... The abandonment of this common law restriction introduced a difficult question. This question is whether duress should be based on any unlawful threat or conduct or, alternatively, whether other illegitimate or improper, yet lawful, threats or conduct might suffice....

[para 28] A significant focus of the submissions by Mr Kennedy's executors was that a conclusion of duress was not open to the primary judge because any pressure exerted by Mr Kennedy upon Ms Thorne did not involve any unlawful threat or conduct. Senior counsel relied upon a decision of the New South Wales Court of Appeal which held, consistently with the older common law cases, that duress at common law requires proof of threatened or actual unlawful conduct [Australia & New Zealand Banking Group v Karam [2005] NSWCA 344]. He submitted that Ms Thorne had not set out any "justifiable formulation" by which lawful act duress could apply.

[para 29] It was not necessary for the primary judge to consider common law duress. ... the sense in which the primary judge in this case described the pressure on Ms Thorne was to focus on Ms Thorne's lack of free choice (in the sense used in undue influence cases) rather than whether Mr Kennedy was the source of all the relevant pressure, or whether the impropriety or illegitimacy of Mr Kennedy's lawful actions might suffice to constitute duress. Nor did this Court receive any substantial submissions concerning when illegitimacy or impropriety might be established for duress at common law ... In these circumstances, it is not necessary to address the arguments in favour of or against the conclusion of the New South Wales Court of Appeal that duress at common law requires proof of threatened or actual unlawful conduct. Nor is it necessary to consider whether the recognition of lawful act duress adds anything to the doctrine concerned with unconscionable conduct.

[footnotes omitted]

Undue influence

There was actual undue influence in this case (it was not a case of presumed undue influence; in particular, the relationship between fiancé and fiancée does not give rise to presumed undue influence).

[para 30] ... the boundaries, particularly between undue influence and duress, are blurred. One reason why there is no clear distinction is that undue influence can arise from widely different sources, one of which is excessive pressure. Importantly, however, since pressure is only one of the many sources for the influence that one person can have over another, it is not necessary that the pressure which contributes to a conclusion of undue influence be characterised as illegitimate or improper.

[para 31] In 1836, in a passage which was copied verbatim by Snell thirty years later, Story said that a person can be subjected to undue influence where the effect of factors such as pressure is that the person "has no free will, but stands in vinculis [in chains]". He explained that "the constant rule in Equity is, that, where a party is not a free agent, and is not equal to protecting himself, the Court will protect him". In 1866, this approach was applied in equity by the House of Lords, recognising undue influence in a case of pressure that deprived the plaintiff of "free agency". In 1868, in probate, Sir James Wilde also described undue influence as arising where a person is not a "free agent". In Johnson v Buttress, Dixon J described how undue influence could arise from the "deliberate contrivance" of another (which naturally includes pressure) giving rise to such influence over the mind of the other that the act of the other is not a "free act". And, in Bank of New South Wales v Rogers, McTiernan J characterised the absence of undue influence as a "free and well-understood act" and Williams J referred to "the free exercise of the respondent's will".

[para 32] The question whether a person's act is "free" requires consideration of the extent to which the person was constrained in assessing alternatives and deciding between them. Pressure can deprive a person of free choice in this sense where it causes the person substantially to subordinate his or her will to that of the other party. It is not necessary for a conclusion that a person's free will has been substantially subordinated to find that the party seeking relief was reduced entirely to an automaton or that the person became a "mere channel through which the will of the defendant operated". Questions of degree are involved. But, at the very least, the judgmental capacity of the party seeking relief must be "markedly sub-standard" as a result of the effect upon the person's mind of the will of another.

[para 33] An example which illustrates the characterisation by a court of a lack of free will sufficient to amount to undue influence is the decision of this Court in Johnson v Buttress. In that case, Mr Buttress was a 67 year old man, who was "wholly illiterate, not very intelligent, and of little or no experience or capacity in business". He made a voluntary transfer of land to a relative of his wife. The land was his only property and his only means of livelihood. When he made the transfer he did not understand that he had parted with the land irrevocably. After Mr Buttress died, the administrator of his estate brought an application to set aside the transfer. The trial judge set aside the transfer on the basis of undue influence. This decision was upheld in this Court. Although other members of the Court relied upon a presumption of undue influence, which is considered below, one member of the Court, Starke J, concluded that it was open to the trial judge to find that undue influence arose without any presumption. His Honour upheld the conclusion of the trial judge that the circumstances of the transfer invited the inference that it was "not the result of the free and deliberate judgment of the deceased".

[para 34] There are different ways to prove the existence of undue influence. One method of proof is by direct evidence of the circumstances of the particular transaction. That was the approach relied upon by the primary judge in this case. Another way in which undue influence can be proved is by presumption. This presumption was relied upon by Ms Thorne in this Court as an alternative. A presumption, in the sense used here, arises where common experience is that the existence of one fact means that another fact also exists. Common experience gives rise to a presumption that a transaction was not the exercise of a person's free will if (i) the person is proved to be in a particular relationship, and (ii) the transaction is one, commonly involving a "substantial benefit" to another, which cannot be explained by "ordinary motives", or "is not readily explicable by the relationship of the parties". Although the classes are not closed, in Johnson v Buttress Latham CJ described the relationships that could give rise to the presumption as including parent and child, guardian and ward, trustee and beneficiary, solicitor and client, physician and patient, and cases of religious influence. Outside recognised categories, the presumption can also be raised by proof that the history of the particular relationship involved one party occupying a similar position of ascendency or influence, and the other a corresponding position of dependency or trust. In either case, the presumption is rebuttable by the other party proving that the particular transaction or transfer, in its particular circumstances, was nevertheless the result of the weaker party's free will.

[para 35] Ms Thorne submitted that she was entitled to the benefit of a presumption of undue influence because the relationship of fiancé and fiancée should be recognised as one to which the presumption attaches. This submission was concerned with a presumption of undue influence (that a transaction was the result of a lack of free will) and not with the different doctrine concerning the possibility of an abuse of confidence in any relationship of intimacy. The submission should not be accepted.

[para 36] ... In 1992 in Louth v Diprose Brennan J observed that it "may no longer be right to presume that a substantial gift made by a woman to her fiancé has been procured by undue influence". Common experience today of the wide variety of circumstances in which two people can become engaged to marry negates any conclusion that a relationship of fiancé and fiancée should give rise to a presumption that either person substantially subordinates his or her free will to the other.

[after discussing the findings of the primary judge and the Full Court]

[para 55] ... It was open to the primary judge to conclude that Mr Kennedy, as Ms Thorne knew, was not prepared to amend the agreement other than in minor respects. Further, the description of the agreements by the primary judge as not being "fair or reasonable" was not merely open to her. It was an understatement. Ms Harrison's unchallenged evidence was that the terms of the agreements were "entirely inappropriate" and wholly inadequate "[i]n relation to everything". She said that the agreements did not show any consideration for Ms Thorne's interests. Even without Ms Harrison's evidence, it is plain that some of the provisions of the agreements could not have operated more adversely to Ms Thorne. For instance, the agreements purported to have the effect that if Ms Thorne and Mr Kennedy separated within three years then Ms Thorne was not entitled to anything at all.

[para 56] The primary judge was correct to consider the unfair and unreasonable terms of the pre-nuptial agreement and the post-nuptial agreement as matters relevant to her consideration of whether the agreements were vitiated. ...  despite the usual financial imbalance in agreements of that nature, it can be an indicium of undue influence if a pre-nuptial or post-nuptial agreement is signed despite being known to be grossly unreasonable even for agreements of this nature. In other words, what the Full Court rightly recognised as the significant gap between Ms Thorne's understanding of Ms Harrison's strong advice not to sign the "entirely inappropriate" agreement and Ms Thorne's actions in signing the agreement was capable of being a circumstance relevant to whether an inference should be drawn of undue influence.

[para 57] ... the primary judge found that Ms Thorne was "powerless" and that Ms Thorne believed that she had "no choice" to do anything other than sign the agreements as presented. The primary judge's finding was, in effect, that Ms Thorne was deprived of the ability to bring a free choice to the decision as to whether to sign the agreements. Ms Thorne's choices about entering the agreements on Mr Kennedy's terms were subordinated to the will of Mr Kennedy. Despite the strong advice from Ms Harrison, Ms Thorne accepted the terms of the agreements in part due to her "reliance on Mr Kennedy for all things". Although the primary judge described her conclusion as one of "duress", for the reasons explained above her conclusion is more aptly described as one of undue influence. It was, therefore, unnecessary for the primary judge to assess the extent to which the pressure upon Ms Thorne came from Mr Kennedy as might be required for the doctrine of duress. It was also unnecessary for the primary judge to consider whether, for the purposes of the doctrine of duress, the pressure that Mr Kennedy exerted upon Ms Thorne was improper or illegitimate. These are matters within the domain of duress rather than undue influence. ...

[para 59] ... The primary judge's conclusions were open to her on the evidence. Each of the factors which the primary judge considered was a relevant circumstance in the overall evaluation of whether Ms Thorne had been the subject of undue influence in her entry into the agreements. In combination, it was open to the primary judge to conclude that Ms Thorne considered that she had no choice or was powerless other than to enter the agreements. In other words, the extent to which she was unable to make "clear, calm or rational decisions" was so significant that she could not aptly be described as a free agent.

[para 60] In the particular context of pre-nuptial and post-nuptial agreements, some of the factors which may have prominence include the following: (i) whether the agreement was offered on a basis that it was not subject to negotiation; (ii) the emotional circumstances in which the agreement was entered including any explicit or implicit threat to end a marriage or to end an engagement; (iii) whether there was any time for careful reflection; (iv) the nature of the parties' relationship; (v) the relative financial positions of the parties; and (vi) the independent advice that was received and whether there was time to reflect on that advice.

[emphasis added; footnotes omitted]

 

Unconscionable conduct

There was actual undue influence in this case (it was not a case of presumed undue influence; in particular, the relationship between fiancé and fiancée does not give rise to presumed undue influence).

[para 38] A conclusion of unconscionable conduct requires the innocent party to be subject to a special disadvantage "which seriously affects the ability of the innocent party to make a judgment as to [the innocent party's] own best interests". The other party must also unconscientiously take advantage of that special disadvantage. ... Before there can be a finding of unconscientious taking of advantage, it is also generally necessary that the other party knew or ought to have known of the existence and effect of the special disadvantage.

[para 39] In Commercial Bank of Australia Ltd v Amadio, Deane J said that the equitable principles concerning relief against unconscionable conduct are closely related to those concerned with undue influence. The same circumstances can result in the conclusion that the person seeking relief (i) has been subject to undue influence, and (ii) is in a position of special disadvantage for the purposes of the doctrine concerned with unconscionable conduct. For instance, in Diprose v Louth (No 1), the trial judge, King CJ, observed that both doctrines were satisfied where the defendant "was in a position of emotional dominance which gave her an influence over the [plaintiff] which she exercised unconscientiously to procure the gift of the house". ...

[para 40] Although undue influence and unconscionable conduct will overlap, they have distinct spheres of operation. One difference is that although one way in which the element of special disadvantage for a finding of unconscionable conduct can be established is by a finding of undue influence, there are many other circumstances that can amount to a special disadvantage which would not establish undue influence. A further difference between the doctrines is that although undue influence cases will often arise from the assertion of pressure by the other party which might amount to victimisation or exploitation, this is not always required. In Commercial Bank of Australia Ltd v Amadio, Mason J emphasised the difference between unconscionable conduct and undue influence as follows:

"In the latter the will of the innocent party is not independent and voluntary because it is overborne. In the former the will of the innocent party, even if independent and voluntary, is the result of the disadvantageous position in which he is placed and of the other party unconscientiously taking advantage of that position."

[after considering the facts and the decisions in the lower courts ...:]

[para 63] ... the Full Court also erred in its conclusion that Ms Thorne's entry into the agreements was not procured by unconscionable conduct.

[para 64] The Full Court recognised that Ms Thorne was labouring under a disadvantage, although the Court did not add the adjective "special", which, as Mason J in Commercial Bank of Australia Ltd v Amadio explained, is used to emphasise that the disadvantage is not a mere difference in the bargaining power but requires an inability for a person to make a judgment as to his or her own best interests. The findings by the primary judge that Ms Thorne was subject to undue influence – powerless, with what she saw as no choice but to enter the agreements – point inevitably to the conclusion that she was subject to a special disadvantage in her entry into the agreements.

[para 65] Ms Thorne's special disadvantage was known to Mr Kennedy. Her special disadvantage had been, in part, created by him. He created the urgency with which the pre-nuptial agreement was required to be signed and the haste surrounding the post-nuptial agreement and the advice upon it. While Ms Thorne knew Mr Kennedy required her acknowledgement that his death would not result in her receiving a windfall inheritance at the expense of his children, she had no reason to anticipate an intention on his part to insist upon terms of marriage that were as unreasonable as those contained in the agreements. Further, Ms Thorne and her family members had been brought to Australia for the wedding by Mr Kennedy and his ultimatum was not accompanied by any offer to assist them to return home. These matters increased the pressure which contributed to the substantial subordination of Ms Thorne's free will in relation to the agreements. Mr Kennedy took advantage of Ms Thorne's vulnerability to obtain agreements which, on Ms Harrison's uncontested assessment, were entirely inappropriate and wholly inadequate. Even within that class of agreement, the agreements which Ms Thorne signed involved "gross inequality".

[emphasis added; footnotes omitted]

 

Justice Nettle

Agreed with the orders proposed by the plurality.

In relation to unconscionable conduct his Honour noted:

[para 74] The equitable doctrine of unconscionable conduct is not restricted to unlawful means. Equity may intervene to relieve against the consequences of a party taking unconscientious advantage of another party's position of special disadvantage regardless of whether the conduct is otherwise lawful. And while this case might better be conceived of as one involving illegitimate pressure, it is also capable of resolution in terms of Mr Kennedy having taken unconscientious advantage of Ms Thorne's position of special disadvantage. In effect, it was a position of special disadvantage which he created by bringing her to this country, keeping her here for many months in a state of belief that he would marry her, allowing preparations for the wedding to proceed, and only then, when she had ceased for all practical purposes to have any other option, subjecting her to the pressure of refusing to marry her unless she agreed to the terms of the first agreement. It was thus also a position of special disadvantage of which Mr Kennedy was aware, or at least of which a reasonable person in his position would have conceived as a real possibility.

[para 75] In all likelihood, things would have been different if, instead of waiting until the eleventh hour, Mr Kennedy had made clear to Ms Thorne from the outset of their relationship that his love for her was in truth so conditional that the marriage he proposed would depend upon her giving up any semblance of her just entitlements in the event of a dissolution of their marriage. In the scheme of things, it can hardly be supposed that a young woman in Ms Thorne's position would be persuaded to abandon her life abroad and travel halfway around the world to bind herself to a sexagenarian if, at the outset of the relationship, she had been made aware of the enormity of the arrangement that was proposed.

[para 76] Mr Kennedy, however, never attempted so to persuade Ms Thorne. By the time he disclosed to her the full terms of the agreement, and by the time Ms Harrison had made Ms Thorne understand the purport of them, the circumstances in which Ms Thorne found herself appear so seriously to have affected her state of mind as to have rendered her incapable of making a judgment in her own best interests. As the plurality in effect observe, there is no other rational explanation for Ms Thorne's decision not to insist upon the substantive changes which Ms Harrison recommended, and instead to acquiesce in Mr Kennedy's extraordinary demands.

[footnotes omitted]

 

Justice Gordon

There was unconscionable conduct but not undue influence:

[para 80] Ms Thorne’s capacity to make an independent judgment was not affected. The primary judge found that Ms Thorne was able to comprehend what she was doing when she signed the agreements, and that she knew and recognised the effect and importance of the advice she was given. Moreover, Ms Thorne wanted the marriage to Mr Kennedy to proceed and to prosper. She knew and understood that it would proceed only if she accepted the terms proffered. Once she decided to go ahead with the marriage, it was right to say, as the primary judge said, that she had "no choice" except to enter into the agreements. No other terms were available. But her capacity to make an independent, informed and voluntary judgment about whether to marry on those terms was unaffected and she chose to proceed. Her will was not overborne.

[para 106] Whatever metaphors and descriptors are used to describe the relevant principles, the focus of the [undue influence] doctrine is on identifying whether and how a person's will is impaired. A belief on Ms Thorne’s part that she had no choice but to sign the agreements if she wanted the relationship to continue does not speak to a lack of will or capacity to exercise independent judgment. Indeed, in light of the primary judge’s findings, such a belief demonstrates that she did enter into each agreement in the free exercise of her independent will. ... Mr Kennedy held "[e]very bargaining chip and every power" and did not create any opportunities to negotiate. Ms Thorne's choices were limited to (1) signing each agreement, including agreeing to the clauses which substantially displaced her entitlements in the event of separation, or (2) ending the relationship, which would have disastrous consequences. Those findings were amply supported by the evidence. Accordingly, if Ms Thorne did believe that she had "no choice" but to sign each agreement if she wanted to fulfil her desire to marry and continue her relationship with Mr Kennedy, then her assessment of the options was plainly correct. The evident correctness of her assessment militates against the conclusion that her will was impaired.

[para 107] And the fact that Ms Thorne's options were narrow, even eliminated, is not to the point. The paucity of options is relevant to whether, for the purposes of the doctrine of unconscionable conduct, Ms Thorne was suffering from a special disability or disadvantage of which Mr Kennedy unconscientiously took advantage. But it says nothing about her will. ...

 

On the issue of unconscionable conduct

Applicable principles

[para 109] Unconscionable conduct "looks to the conduct of the stronger party in attempting to enforce, or retain the benefit of, a dealing with a person under a special disability in circumstances where it is not consistent with equity or good conscience that he should do so". The rationale of the doctrine is "to ensure that it is fair, just and reasonable for the stronger party to retain the benefit of the impugned transaction".

[para 110] Whether equity will intervene to prevent a party from enforcing, or retaining the benefit of, a transaction is determined by examining the circumstances under which the parties entered into the transaction. Specifically, the equitable jurisdiction is engaged if, when the transaction was entered into: (1) one party was under a special disadvantage in dealing with the other party; and (2) the other party unconscientiously took advantage of that special disadvantage. The existence of those circumstances at the time of the transaction is what "affect[s] the conscience" of the stronger party and renders the enforcement of the transaction, or the taking of the benefit, "unconscientious" or "unconscionable".

...

[para 113] It is not possible to identify exhaustively what amounts to a special disadvantage. Relevant matters may include "illness, ignorance, inexperience, impaired faculties, financial need or other circumstances" that affect the weaker party's ability to protect their own interests. Those matters are illustrative, not exhaustive. A special disadvantage may also be discerned from the relationship between parties to a transaction; for instance, where there is "a strong emotional dependence or attachment". Whichever matters are relevant to a given case, it is not sufficient that they give rise to inequality of bargaining power: a special disadvantage is one that "seriously affects" the weaker party's ability to safeguard their interests.

...

[para 115] Although the doctrine of unconscionable conduct bears some resemblance to the doctrine of undue influence, there is an important difference between the two doctrines. As Mason J explained in Amadio, that difference concerns the will of the innocent party. For unconscionable conduct, "the will of the innocent party, even if independent and voluntary, is the result of the disadvantageous position in which [the innocent party] is placed and of the other party unconscientiously taking advantage of that position". By contrast, for undue influence, "the will of the innocent party is not independent and voluntary because it is overborne".

Unconscionable conduct in this appeal

[para 116] The primary judge's factual findings and reasoning did not specifically address whether Ms Thorne was under any special disadvantage or disability. But a special disadvantage may be discerned from the relationship between the parties and the findings of fact in this case require a conclusion that Ms Thorne was under a special disadvantage at the time of each agreement. In relation to the first agreement, that special disadvantage arose from the circumstances in which Mr Kennedy brought Ms Thorne to Australia, the proximity of the wedding and the circumstances in which the agreement was first provided, coupled with the finding that Ms Thorne knew that the wedding would not take place (and the relationship would be at an end) if she did not sign the agreement.

[para 117] Moreover, Ms Thorne plainly depended on Mr Kennedy both financially and emotionally, was emotionally invested in their relationship and expected a future life with him. It is eminently plausible that she would have been unusually susceptible to entering into an "improvident transaction" with Mr Kennedy if she felt that doing so would ensure, or was necessary to ensure, that their relationship continued and that any adverse consequences of ending the relationship were avoided.

[para 118] The force of these conclusions is not lessened by observing that Ms Thorne signed the second agreement after they married. Save that the wedding had occurred by that point, the factors identified above as constituting a special disadvantage could hardly be thought to have dissipated immediately after they married. The wedding did not, of itself, relieve her of the special disadvantage she was under when she entered into the first agreement. Indeed, when Ms Thorne was meeting with her solicitor for the purpose of receiving advice about the second agreement, Mr Kennedy not only sat in the car but telephoned her to ask how much longer she was going to be. And, as the primary judge found, Ms Thorne had no bargaining power and no capacity to effect any change.

[para 119] Accepting that Ms Thorne was placed at a special disadvantage, the question becomes whether Mr Kennedy unconscientiously took advantage of it.

[para 120] Plainly, Mr Kennedy, as the other party to the relationship, not only was aware of, but played a central role in creating, the various factors constituting the special disadvantage. And having regard to the circumstances in which they were entered into and their content, the financial agreements were "neither fair nor just and reasonable" and the entry into them involved an unconscientious taking of advantage by Mr Kennedy.

[para 121] First, the agreements were "grossly improvident". Although it is not essential or necessarily decisive that there is "an inadequacy of consideration", it is relevant to observe that the entitlements for which they provided in the event of separation were extraordinarily and disproportionately small in comparison to what Ms Thorne would have been entitled to if she had not entered into the agreements.

[para 122] Second, the circumstances in which the agreements were entered into support the conclusion that Mr Kennedy's procurement or acceptance of Ms Thorne's assent to each agreement was unconscientious. True it is that some kind of agreement or "paper" relating to Mr Kennedy's wealth had long been in the contemplation of the parties, and that Ms Thorne was not under any relevant misapprehension as to the effect of each agreement. However, having brought Ms Thorne to Australia promising to look after her like "a queen", it was not until two weeks before the wedding that Mr Kennedy arranged for Ms Thorne to receive legal advice; and it was not until ten days before the wedding that she received detailed information about his finances and became aware of the specific contents of the first agreement.

[para 123] It is not a sufficient response to the conclusion of unconscionable conduct to point to the fact that Ms Thorne received independent legal advice about the two agreements and chose to reject her solicitor's recommendation on each occasion. The fact that Ms Thorne was willing to sign both agreements despite being advised that they were "terrible" serves to underscore the extent of the special disadvantage under which Ms Thorne laboured, and to reinforce the conclusion that in these circumstances, which Mr Kennedy had substantially created, it was unconscientious for Mr Kennedy to procure or accept her assent.

[footnotes omitted]

 

 

Further reading

Journal articles

K Barnett, "Thorne v Kennedy: a thorn in the side of ‘binding financial agreements’?" (2018) 31(3) Australian Journal of Family Law 183

Felicity Maher, 'Clarity or confusion? Duress, undue influence and unconscionable conduct in the High Court' (2018) 12(1) Journal of Equity 91-118

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