Abati & Cole
[2015] FamCA 185
•23 March 2015
FAMILY COURT OF AUSTRALIA
| ABATI & COLE | [2015] FamCA 185 |
| FAMILY LAW – PROPERTY – FINANCIAL AGREEMENT – ANTI-SUIT INJUNCTION – Where there is a binding financial agreement – where the husband seeks that a clause of the agreement be severed, it being a provision for child maintenance and void by operation of s 90E(a) – where the wife seeks to restrain the husband from instituting or prosecuting proceedings overseas with respect to her separate property – whether the court has jurisdiction and power to make the injunction sought – consideration of the purpose of financial agreements – consideration of the parties’ intention in entering into the financial agreement – clause severed – anti-suit injunction granted. |
| Acts Interpretation Act 1901 (Cth) s 15AA Family Law Act 1975 (Cth) ss 4, 31, 71A, 87(11), 90B, 90E, 90KA Family Law Rules 2004 (Cth) rr 20.01, 20.02 |
ASIC v Edensor Nominees Pty Ltd (2001) 204 CLR 559
| CSR Limited v Cigna Insurance Australia Limited & Ors (1997) 189 CLR 345 Fevia & Carmel-Fevia (2009) FLC 93-411 Knight & FP Special Assets Ltd (1992) 174 CLR 178 Kostres & Kostres (2009) FLC 93-420 Project Blue Sky Inc and Ors v Australian Broadcasting Authority (1998) 194 CLR 355 Senior & Anderson (2011) FLC 93-470 |
The Owners of the Ship Shin Kobe Maru v Empire Shipping Company Inc (1994) 181 CLR 404
| APPLICANT: | Ms Abati |
| RESPONDENT: | Mr Cole |
| FILE NUMBER: | MLC | 10475 | of | 2013 |
| DATE DELIVERED: | 23 March 2015 |
| PLACE DELIVERED: | Melbourne |
| PLACE HEARD: | Melbourne |
| JUDGMENT OF: | Macmillan J |
| HEARING DATE: | 26 August 2014 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr T North SC |
| SOLICITOR FOR THE APPLICANT: | Nicholes Family Lawyers |
| COUNSEL FOR THE RESPONDENT: | Mr G Richardson SC |
| SOLICITOR FOR THE RESPONDENT: | Harris Freidman Lawyers |
ORDERS
IT IS DECLARED THAT
A.Clause 81.1 of the Binding Financial Agreement dated … 2012 is void.
B.The Binding Financial Agreement dated … 2012 is a financial agreement pursuant to s 90B of the Family Law Act 1975 (Cth) and is otherwise binding on the husband and the wife.
IT IS ORDERED THAT
The husband by himself, his servants and agents or howsoever otherwise be and is hereby restrained from seeking relief against the wife in the Denpasar District Court or any other Court in Indonesia with respect to all or any of the wife’s separate property whether that relief is by way of injunction restraining the wife from dealing in any way with respect to any of that property, or any stipulation or declaration that all or any such property is “community property” or a declaration that any “Marital Seizure” of all or any such property is lawful or valuable or any further or other relief with respect to all or any such property.
Pursuant to clause 80 of the Binding Financial Agreement dated 30 April 2012, the husband pay to the wife interest on the sum of $100,000 in accordance with the Family Law Rules 2004 (Cth) calculated from 8 September 2013 to 20 August 2014, being the date of payment by the husband to the Trust Account of Nicholes Family Lawyers.
The Title Deeds produced pursuant to subpoena directed to Mr G issued 1 August 2014 be released to the solicitors for the wife.
All questions of costs be reserved for determination.
On or before 4.00 pm on 17 April 2015 the parties file and serve any written submissions in support of any application for costs arising out of or incidental to the hearing of this matter.
On or before 4.00 pm on 15 May 2015 the parties file and serve any reply to any written submissions in support of any application for costs arising out of or incidental to the hearing of this matter.
All extant applications, save and except for any applications for costs, be otherwise dismissed.
IT IS DIRECTED THAT
All documents produced to the Court pursuant to subpoena, save and except for documents produced pursuant to subpoena directed to Mr G issued
1 August 2014, and exhibits relied upon by the parties be returned by the subpoena clerk of the Family Court of Australia, Melbourne Registry, to the person or organisation who produced same after the expiration of thirty (30) days from the date of these orders, or otherwise upon the conclusion of any appeal.
IT IS CERTIFIED THAT
Pursuant to Rule 19.50 of the Family Law Rules 2004 (Cth) it was reasonable to engage counsel, including senior counsel, to attend.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Abati & Cole has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
| FAMILY COURT OF AUSTRALIA AT MELBOURNE |
FILE NUMBER: MLC 10475 of 2013
| Ms Abati |
Applicant
And
| Mr Cole |
Respondent
REASONS FOR JUDGMENT
In 2012, on the day of their marriage, the husband and the wife executed the Binding Financial Agreement (“the agreement”) pursuant to s 90B of the Family Law Act 1975 (Cth) (“the Act”) which is the subject of these proceedings.
Proceedings were commenced by the wife in this Court on 2 December 2013 seeking, inter alia, a declaration that the agreement executed by the parties is valid and binding on the parties; orders restraining the husband from seeking relief with respect to all or any of her separate property, in particular the property she owns in Indonesia, which she submitted would be contrary to the provisions of the agreement; and orders with respect to the enforcement of the husband’s obligations pursuant to the agreement, together with interest on sums she says are outstanding.
It is conceded by the husband that, in the absence of the orders of this Court sought by the wife restraining him from doing so, it is his intention to commence proceedings in Indonesia with respect to the property owned by the wife in Indonesia.
THE EVIDENCE
The wife, who also goes by the first name ‘Widya’ in the agreement, relied in support of her application upon the following affidavits:
· Affidavit of Ms Abati filed 2 December 2013;
· Affidavit of Ms Abati filed 2 December 2013;
· Affidavit of Ms H filed 30 January 2014;
· Affidavit of Ms H filed 7 March 2014;
· Affidavit of Ms H filed 29 May 2014; and
· Affidavit of Ms Abati filed 4 August 2014.
The husband relied upon the affidavit of Mr Cole which was filed on 25 July 2014.
Upon the husband having conceded that he would issue proceedings in Indonesia in the absence of an anti-suit injunction made by this Court, neither counsel sought to cross-examine the other party or their witnesses and the matter proceeded by submissions.
BACKGROUND
The husband was born in Australia in 1956 and is 58 years of age. He is an Australian citizen. The wife was born in Indonesia in 1976 and is 38 years of age. The wife is an Indonesian citizen. The wife has a child from a previous relationship who lives in Indonesia with, and is supported by, her parents.
The wife asserts that the parties commenced a relationship in 2008. On the wife’s version of facts, the parties commenced cohabitation in October 2009 and on the husband’s version of facts, they commenced living together in May 2010. Nothing turns on this evidence for the purposes of the matters I must determine.
The parties were married in Australia in 2012. On 27 April 2013 the wife signed her statement of independent legal advice. The husband signed his statement of independent legal advice on the 30 April 2012, the date on which the parties executed the agreement, and thereafter married.
The parties separated on 8 December 2012, although the relevant date of separation as deemed by the agreement is several months later. The parties were divorced by order made by the Denpasar District Court on 6 May 2014.
The wife was pregnant at the time of the marriage. The parties’ son, J, was born in Indonesia in 2012 and is now two years of age. An order was made in the Denpasar District Court on 6 May 2014, which provided for the parties to have joint custody of J.
THE ISSUES
The issues the Court must determine are as follows:
· Whether this Court has the jurisdiction and power to grant the injunctive relief sought by the wife which would restrain the husband from instituting proceedings in Indonesia with respect to the property owned by the wife in Indonesia;
· If the Court does have the power to grant an anti-suit injunction, whether it should exercise its discretion in this case to do so;
· Whether the Court should make an order for the payment of interest and, if so, the quantum of that interest with respect to the sum of $100,000 due and payable by the husband to the wife pursuant to clause 80 of the agreement; and
· Whether clause 81.1 of the agreement is void and, if that is not the case, whether the Court should make an order for the payment of the sum of $100,000 pursuant to clause 81.1 and interest thereon and, if so, the quantum of interest payable.
The minute of proposed orders setting out the orders sought by the wife included a declaration as to the wife’s separate property as referred to in the agreement, orders requiring the husband to deliver the Title Deeds and associated IMB Building permits to those properties to the wife’s solicitors, orders restraining the husband from doing any act or executing any document purporting to transfer any of the wife’s separate property into his name or the name of any other person or entity or otherwise purporting to deal with such property, and orders restraining the husband from doing any act or thing which would have the effect of mortgaging or otherwise encumbering the wife’s separate property.
Counsel for the wife, in support of the wife’s application for a declaration with respect to her separate property in accordance with paragraph A of the minute of proposed orders, referred me to annexure “F” to the wife’s affidavit sworn 21 November 2013 and filed 2 December 2013. Counsel for the husband submitted that there was no application before the Court with respect to that declaration. Whereas the Court clearly has power pursuant to s 90G(1B) of the Act to make an order declaring that a financial agreement is binding on the parties to that agreement upon application by a party seeking to enforce the agreement, neither party addressed me as to the Court’s power to make the declaration sought by the wife as to her separate property. In circumstances where the wife has not, as part of her application, sought an order to this effect and where neither party made submissions with respect to the Court’s power to make the declaration in question, I am not satisfied that I have the power or that it would be proper to make the declaration sought by the wife.
It was common ground that the Title Deeds to what the wife described as her separate property had been delivered to the Court prior to the hearing and the husband claimed no interest in those documents. In those circumstances, the wife did not press paragraphs 1(c), (d) or (e) of her minute of proposed orders.
LEGISLATIVE FRAMEWORK
It is important in this case, in order to understand and consider the submissions made by counsel in support of the parties’ cases, to set out the relevant sections of the Act.
The definition of a “matrimonial cause” in s 4 of the Act includes:
(eaa)… proceedings with respect to a financial agreement that are between any combination of:
(i)the parties to that agreement; and
(ii)the legal personal representatives of any of those parties who have died;
(including a combination consisting solely of parties or consisting solely of representatives); …
A “financial agreement” is defined in the same section as “an agreement that is a financial agreement under section 90B, 90C or 90D, but does not include an ante-nuptial or post-nuptial settlement to which section 85A applies”.
“Financial matters” is defined as being:
(a)in relation to the parties to a marriage -- matters with respect to:
(i)the maintenance of one of the parties; or
(ii)the property of those parties or of either of them; or
(iii)the maintenance of children of the marriage; or
…
Section 90B(1) of the Act provides as follows:
If:
(a)people who are contemplating entering into a marriage with each other make a written agreement with respect to any of the matters mentioned in subsection (2); and
(aa)at the time of the making of the agreement, the people are not the spouse parties to any other binding agreement (whether made under this section or section 90C or 90D) with respect to any of those matters; and
(b)the agreement is expressed to be made under this section;
the agreement is a financial agreement…
The matters in subsection (2) referred to in subsection 1(a) are as follows:
(a)how, in the event of the breakdown of the marriage, all or any of the property or financial resources of either or both of the spouse parties at the time when the agreement is made, or at a later time and before divorce, is to be dealt with;
(b)the maintenance of either of the spouse parties;
(i)during the marriage; or
(ii)after divorce; or
(iii)both during the marriage and after divorce.
Section 71A of the Act provides that Part VIII of the Act does not apply to:
(a)financial matters to which a financial agreement that is binding on the parties to the agreement applies; or
(b)financial resources to which a financial agreement that is binding on the parties to the agreement applies.
…
The Court will not have the power to make orders pursuant to s 79 of the Act in respect of “financial matters” in circumstances where the parties have made a written agreement which is a “financial agreement” and the “financial agreement” is binding. The requirements for a binding “financial agreement” are set out in s 90G of the Act. There is no dispute in this case that the written agreement is a “financial agreement” and that that “financial agreement” is binding, save that it is the husband’s case that clause 81.1 of the agreement is void and should be severed from the agreement.
Finally, and of particular significance in this case, s 90KA of the Act, which counsel for the wife submits is the source of power for the relief that the wife seeks, provides as follows:
The question whether a financial agreement or a termination agreement is valid, enforceable or effective is to be determined by the court according to the principles of law and equity that are applicable in determining the validity, enforceability and effect of contracts and purported contracts, and, in proceedings relating to such an agreement, the court:
(a)subject to paragraph (b), has the same powers, may grant the same remedies and must have the same regard to the rights of third parties as the High Court has, may grant and is required to have in proceedings in connection with contracts or purported contracts, being proceedings in which the High Court has original jurisdiction; and
(b)has power to make an order for the payment, by a party to the agreement to another party to the agreement, of interest on an amount payable under the agreement, from the time when the amount became or becomes due and payable, at a rate not exceeding the rate prescribed by the applicable Rules of Court; and
(c)in addition to, or instead of, making an order or orders under paragraph (a) or (b), may order that the agreement, or a specified part of the agreement, be enforced as if it were an order of the court.
ANTI-SUIT INJUNCTION
The wife’s case
Counsel for the wife submitted that this Court has “the jurisdiction and powers conferred on it expressly or by implication, by the legislation which governs it”, which, in this case, is the Act. In addition, the Court has “such powers as are incidental and necessary to the exercise of the jurisdiction and powers so conferred”.
Counsel for the wife referred me to ASIC v Edensor Nominees Pty Ltd (2001) 204 CLR 559, a case concerning the jurisdiction of the Federal Court in which Gleeson CJ, Gaudron and Gummow J said as follows:
[64]“Jurisdiction” and “power” are not discrete concepts. The term “inherent jurisdiction” may be used, for example in relation to the granting of stays for abuse of process, to describe what in truth is the power of a court to make orders of a particular description. In Harris v Caladine, Toohey J said:
“The distinction between jurisdiction and power is often blurred, particularly in the context of ‘inherent jurisdiction’. But the distinction may at times be important. Jurisdiction is the authority which a court has to decide the range of matters that can be litigated before it; in the exercise of that jurisdiction a court has powers expressly or impliedly conferred by the legislation governing the court and ‘such powers as are incidental and necessary to the exercise of the jurisdiction or the powers so conferred’.”
[65]Nevertheless, it is to be remembered that … “[c]haracteristically an exercise of jurisdiction is attended by an exercise of power”. … (footnotes omitted)
Section 31 of the Act confers jurisdiction on this Court with respect to matters arising under the Act in respect of which matrimonial causes are instituted or continued under the Act. Counsel for the wife submitted that the proceedings in this case fall within the definition of matrimonial cause in s 4(eaa) of the Act, to which I refer above and in summary which includes proceedings with respect to a financial agreement between the parties to that agreement.
Counsel for the wife submitted that s 90KA of the Act, this being a proceeding relating to a financial agreement, confers upon this Court the power to make the order the wife seeks. This includes, in giving effect to the provisions of the agreement, restraining the husband from seeking relief against the wife with respect to her separate property, as defined and identified by the agreement, whether that be in the Denpasar District Court, as proposed in this case by the husband, or any other court.
As counsel for the wife submitted, the power conferred upon this Court is a statutory power, however, by virtue of the power conferred upon it by s 90KA, this Court has the power to grant the same remedies as the High Court in connection with a contract or a purported contract. It is in that context that the limitations on the High Court’s powers are relevant.
Counsel for the wife referred me to CSR Limited v Cigna Insurance Australia Limited & Ors (1997) 189 CLR 345 in which the High Court identified two sources of power to grant injunctions restraining parties from seeking relief in another court. The first source of power is the court’s inherent power to prevent its processes being abused and to protect the integrity of those processes once set in motion. The second is the court’s power “deriving from the Chancery, [to] make orders in restraint of unconscionable conduct or the unconscientious exercise of legal rights”.[1] With respect to the second source of power, the High Court (Dawson, Toohey, Gaudron, McHugh, Gummow and Kirby JJ) concluded at page 392 that “[i]f the bringing of legal proceedings involves unconscionable conduct or the unconscientious exercise of a legal right, an injunction may be granted by a court in exercise of its equitable jurisdiction in restraint of those proceedings no matter where they are brought”.
[1] CSR Limited v Cigna Insurance Australia Limited & Ors (1997) 189 CLR 345, 392 (Dawson, Toohey, Gaudron, McHugh, Gummow and Kirby JJ).
Their Honours went on to say at page 392 as follows:
In some cases, the equitable jurisdiction to restrain unconscionable conduct may be exercised in aid of legal rights. Thus, as the respondents correctly contend, if there is a contract not to sue, an injunction may be granted to restrain proceedings brought in breach of that contract, whether brought here or abroad. Similarly, an injunction may be granted in aid of a promise not to sue in a foreign jurisdiction constituted, for example, by an agreement to submit to the exclusive jurisdiction of the courts of the forum.
The High Court makes it clear in CSR Limited v Cigna Insurance Australia Limited & Ors (supra), as acknowledged by both counsel, that the Court’s power to grant an anti-suit injunction is not limited to “defined and closed”[2] categories.
[2] CSR Limited v Cigna Insurance Australia Limited & Ors (1997) 189 CLR 345, 392 (Dawson, Toohey, Gaudron, McHugh, Gummow and Kirby JJ), citing Jackson v Sterling Industries Ltd (1987) 162 CLR 612, 639.
The wife contends that an injunction should be granted to prevent the husband from doing what she says he contracted not to do and that if the husband is permitted to commence proceedings in Indonesia, as he acknowledges he intends to do if not otherwise restrained, she will lose a benefit which lies at the very heart of the contract they each voluntarily entered into. It is her case that the husband’s intention to commence proceedings in Indonesia, contrary to the provisions of the agreement, amounts to an “unconscientious exercise of legal rights”.
Counsel for the wife further submitted that, in any event, this Court has the power pursuant to s 34 of the Act, which provides that the Court has power, in relation to matters in which it has jurisdiction, in this case proceedings with respect to a financial agreement, “to make orders of such kinds, and to issue, or direct the issue of, writs of such kinds, as the Court considers appropriate”. Counsel submitted that the power conferred by s 34 is sufficient to make the orders sought by the wife. Counsel also referred me to the injunctive relief in s 114(1) but did not seek to proceed on this basis.
The husband’s case
The husband did not oppose the wife’s application for a declaration as to the validity of the agreement, save and except that it was his case that clause 81.1 of the agreement is void by operation of s 90E(a) and that clause 81.2 is void for uncertainty. Counsel for the husband submitted that clause 81 of the agreement in its entirety is also severable by virtue of clauses 42 to 45 of the agreement.
However, counsel for the husband submitted in his written submissions that this Court does not have the jurisdiction to grant the anti-suit injunction sought by the wife. In the alternative, he submitted that, if this Court does have the jurisdiction to make the order sought by the wife, it should, in all of the circumstances of this case, refuse to exercise its discretion in the wife’s favour.
Counsel for the husband said at paragraph 9 of his written submissions that “the respondent accepts that the Family Court has jurisdiction in proceedings with respect to the [agreement], but not in respect of the injunctions sought in respect of property in Bali or the restraint of foreign property proceedings” (footnote omitted), on the basis that those proceedings are for injunctive relief rather than proceedings relating to the agreement and hence, these proceedings do not fall within the definition of “matrimonial cause” in s 4(eaa) of the Act.
Counsel further submitted that in this case, there being no question as to whether the agreement is “valid, enforceable or effective”, the Court does not have the power to make the orders sought by the wife pursuant to s 90KA.
That submission was based upon what he said was the limiting effect of the opening two words of s 90KA, which are “[t]he question”. Counsel for the husband submitted that these two words are important words of limitation which govern what follows in that section, particularly in this case, being that part of the section which reads “...and, in proceedings relating to such an agreement, the court...” precedes subsections (a), (b) and (c) of s 90KA.
Counsel for the husband did not take issue, in the event of the Court being satisfied that it has the power to make the anti-suit injunction sought by the wife, with counsel for the wife’s submission with respect to the sources of power identified by the High Court based upon which the Court can make such an order: the court’s implied power to protect the integrity of its own processes and the power deriving from its equitable jurisdiction to make orders restraining unconscionable conduct or the unconscientious exercise of legal rights. However counsel further submitted that there is “[a] distinction [to be] drawn between an injunction granted in the exercise of equitable jurisdiction if there are proceedings in another court, which are according to the principles of equity, vexatious or oppressive and injunctions granted in aid of legal rights such as by a contract not to sue or an exclusive foreign jurisdiction clause” (footnote omitted).
It was the husband’s case that if the wife seeks to rely on the Court’s equitable jurisdiction to grant an anti-suit injunction she has to identify precisely what contractually conferred legal right(s) she is seeking to protect. Counsel for the husband addressed exclusive jurisdiction clauses in some detail and submitted that although such clauses are a recognised basis for the grant of an anti-suit injunction, insofar as it is contended by the wife that clauses 56 and 58 of the agreement are exclusive jurisdiction or choice of law provisions, the question of whether a jurisdiction clause confers exclusive jurisdiction on Australian courts is one of construction of the contract in question, in this case the agreement. He further submitted that, in this case, in circumstances where the wife was resident in and owned property in Indonesia, there is a strong case that the parties had not intended the agreement to confer exclusive jurisdiction upon the Australian courts.
It is the husband’s case that the parties entered into the agreement for the sole purpose of contracting out of their rights pursuant to Part VIII of the Act. Counsel for the husband submitted that the husband, having promised not to invoke the jurisdiction of the Australian courts that exercise jurisdiction pursuant to the Act, by instituting proceedings in Indonesia, would not be seeking to invoke a jurisdiction that he had promised not to invoke.
Counsel for the husband submitted further that even if the Court determined that it had the power to make the orders sought by the wife, it should decline to do so in circumstances where the wife, in moving to Indonesia shortly after the marriage, had acted contrary to what he says was contemplated by the parties at the time of entering into the agreement.
Counsel for the husband submitted that this Court, absent the existence of a financial agreement which pursuant to the provisions of s 90G is a binding financial agreement, has the power to make orders pursuant to Part VIII of the Act. He submitted that this would be “an inappropriate lack of judicial restraint to endeavour by orders in personam to hinder the courts of another country in acting entirely the same way where they properly hold jurisdiction”.
Although not referred to in his written submissions, counsel for the husband during the hearing submitted that the husband’s first position was that the wife’s application with respect to the anti-suit injunction and the payments she said were owing pursuant to the agreement, together with interest, should be dismissed by reason of her failure to comply with r 20.02 of the Family Law Rules 2004 (Cth) (“the Rules”).
Rule 20.02, which is headed “when an agreement can be enforced”, provides as follows:
A person seeking to enforce an agreement must first obtain an order:
…
(b)for a financial agreement under Part VIIIA of the Act – under paragraph 90KA(c) of the Act;
….
Counsel for the husband submitted that, as the wife has not made an application pursuant to s 90KA(c) that the agreement or part of the agreement be enforced as if it were an order of the Court, and consequently as she has not complied with the Rules, her application fails and should be dismissed.
DISCUSSION
Rule 20.02
I will deal first with counsel for the husband’s submissions with respect to the wife’s failure to comply with r 20.02 of the Rules.
The summary of Chapter 20 of the Rules at r 19.56 provides that “Chapter 20 sets out the processes for enforcing obligations in financial cases”.
Following this, in Part 20.1, are the obligations which may be enforced, the general powers of the Court for enforcement, various specific forms of enforcement and the requirements with respect to same.
Counsel for the wife submitted that no part of r 20.02 speaks to s 90KA(a) and (b) and that those subsections are an alternative to enforcement of the agreement as if it were an order of the Court. In my view, this is consistent with the wording of s 90KA(c) which provides that “in addition to, or instead of, making an order or orders under paragraph (a) or (b), [the Court] may order that the agreement, or a specified part of the agreement, be enforced as if it were an order of the court”.
Rule 20.01 sets out those obligations which may be enforced pursuant to Chapter 20. They are an obligation to pay money; an obligation to sign a document under s 106A of the Act; an order entitling a person to the possession of real property; and an order entitling a person to the transfer or delivery of personal property. Rule 20.01(2)(a)(vi) provides that an obligation to pay money includes a financial agreement under Part VIIIA of the Act and, as set out above, r 20.02(b) provides that a party seeking to enforce a financial agreement under Part VIIIA of the Act must first obtain an order pursuant to s 90KA(c). I accept counsel for the wife’s submissions that r 20.02(b) does not apply to s 90KA(a) or (b), the powers counsel relies upon in support of the relief sought by the wife.
Section 90KA of the Act gives a party wanting to enforce an agreement three possible alternatives for enforcing that agreement. One of these is to seek an order that the agreement be enforced as if it were an order of the Court and if it is to be enforced relying upon the provisions for its enforcement contained in Chapter 20 of the Rules, there must first be an order pursuant to s 90KA(c). That is not the relief sought by the wife and, in my view, r 20.02 does not require the wife to have sought and obtained an order pursuant to s 90KA(c) as a precondition to the relief she seeks pursuant to s90KA(a) and (b).
Anti-suit injunction
Court’s power to make the orders sought by the wife
Given that it is counsel for the husband’s submission that the agreement was intended for the sole purpose of “[enabling] these parties to contract out of the rights that they each had in respect of Part VIII of the Family Law Act”, it is in my view important to understand the distinction between an agreement, a financial agreement and a binding financial agreement and the implications of that distinction.
The distinction between agreements which are financial agreements and financial agreements which are binding financial agreements and hence oust the jurisdiction of this Court has been considered on a number of occasions. In Senior & Anderson (2011) FLC 93-470 Strickland J said at paragraphs 94-96 as follows:
94.The Act in effect draws a distinction between agreements which are financial agreements (s4, s 90B, s 90C, s 90D) and those financial agreements which are binding (s 90G). Financial agreements can, like any other agreement, govern the actions of the parties to them and bind the parties to obligations, but do not oust the jurisdiction of the court. Parties to an agreement that satisfies the definition of “financial agreement” are bound by its terms (or not bound as the case may be), just as they would be bound (or not bound) by any other agreement (s 90KA) (see generally Australian Securities and Investment Corporation and Rich & Anor (2003) FLC 93-171).
95.Section 90G is irrelevant to the contractual rights and remedies of the parties to an agreement that satisfies the definition of “financial agreement”. That section only becomes relevant when the issue is whether an agreement that satisfies the definition of “financial agreement” is effective for a specific statutory purpose, namely to operate as a bar to claims by either party pursuant to Part VIII of the Act (s 71A). It will be so, if and only if, it is “binding” within the meaning of s 90G.
96.If an agreement, including an agreement that satisfies the definition of “financial agreement” under the Act, fails to effectively bar Part VIII claims ( because of its failure to comply with the requirements of s 90G and, as a result, is not “binding” within the meaning of that section) the financial agreement can nevertheless have an affect. However, an agreement’s failure to be “binding” in the s 90G sense renders its use in Part VIII proceedings to be very limited; specifically it does not operate as a bar to orders made under that Part (see e.g. Woodland and Todd (2005 FLC 93-217 at paragraphs 37-39).
There is no dispute in this case that there is an agreement, that it is a “financial agreement”, or for that matter, that it is a binding financial agreement, save and except with respect to clause 81.1 of the agreement which the husband submits breaches s 90E(a) of the Act and clause 81.2 which he submits is void for uncertainty. As submitted by counsel for the husband during the hearing, “it is just an ordinary contract that is permitted to have a particular effect by statute to operate as a release only in relation to the matters contemplated”. I will address in more detail the question of the validity of clause 81 of the agreement later in these reasons.
However, counsel for the husband submits that this Court does not have the power to make the anti-suit injunction sought by the wife because the powers conferred upon the Court by s 90KA(a), (b) and (c) of the Act are powers limited to cases in which there is a question as to whether the financial agreement in question is “valid, enforceable or effective”. It follows, counsel submitted, that there being no question in this case as to whether the financial agreement is “valid, enforceable or effective”, the Court does not have the power to make the anti-suit injunction sought by the wife.
Counsel for the wife submitted that there is no warrant to construe the opening words of s 90KA as words of limitation or as words in any way confining the operation of the phrase “in proceedings relating to such an agreement”. He submitted that “the agreements about which the power is conferred are not agreements about which there is a question as to validity or enforceability, but “such” agreements, being financial agreement or termination agreements”.
Counsel for the wife further submitted that it is proper to construe s 90KA liberally, as a provision conferring power upon the Court. He referred me to the High Court’s decision in The Owners of the Ship Shin Kobe Maru v Empire Shipping Company Inc (1994) 181 CLR 404 and in particular at page 421 where their Honours (Mason CJ, Brennan, Deane, Dawson, Toohey, Gaudron and McHugh JJ) said unanimously:
[i]t is quite inappropriate to read provisions conferring jurisdiction or granting powers to a court by making implications or imposing limitations which are not found in the express words.
The High Court in that case referred to earlier decisions of that court, including the decision of Gaudron J in Knight & FP Special Assets Ltd (1992) 174 CLR 178, where her Honour said at page 205 as follows:
It is contrary to long-established principle and wholly inappropriate that the grant of power to a court (including the conferral of jurisdiction) should be construed subject to a limitation not appearing in the words of the grant. Save for a qualification which I shall later mention, a grant of power should be construed in accordance with ordinary principles and, thus, the words used should be given their full meaning unless there is something to indicate to the contrary. Powers conferred on a court are powers which must be exercised judicially and in accordance with legal principle. This consideration leads to a qualification to which I earlier referred. The necessity for the power to be exercised judicially tends in favour of the most liberal construction, for it denies the validity of considerations which might limit a grant of power to some different body, including, for example, that the power might be exercised arbitrarily or capriciously or to work oppression or abuse. (footnotes omitted)
However, in this case, counsel for the husband’s submission is that the opening two words of s 90KA, being “[t]he question”, are an express and not an implied limitation on the powers conferred by that section.
Counsel for the husband submitted that s 90KA follows the model of s 87(11), albeit that the words in s 87(11) are expressed in a different tense both relating to the “determination of effect or meaning. That is, if there was a dispute where declaratory relief was sought as to the construction or effect of a provision of the agreement, that it is telling … that consistent with determining its validity or whether it is enforceable, that the Court can also determine a dispute about its construction and meaning and that might involve making orders for declarations or the like”.
I accept counsel for the wife’s submissions that, to the extent that it can be said that s 90KA follows the model of s 87(11), s 87(11) supports his submissions as to the construction of s 90KA. Section 87(11) provides as follows:
… the validity, enforceability and effect of an approved maintenance agreement shall be determined by the court according to the principles of law and equity that are applicable in determining the validity, enforceability and effect of contacts and purported contracts, and, in proceedings of the kind referred to in subparagraph (ea)(iii) of the definition of matrimonial cause in subsection 4(1), being proceedings instituted in a court in which the approved maintenance agreement is registered or deemed to be registered, the court:
(a)subject to paragraph (b), has the same powers, may grant the same remedies and shall have the same regard to the rights of third parties as the High Court has, may grant and is required to have in proceedings in connection with contracts or purported contracts, being proceedings in which the High Court has original jurisdiction;
(b)has power to make an order for the payment, by a party to the agreement to another party to the agreement, of interest on an amount payable pursuant to the agreement, from the time when the amount became or becomes due and payable, at a rate not exceeding the rate prescribed by the Rules of Court; and
(c)in addition to, or instead of, making an order or orders pursuant to paragraph (a) or (b), may order that the agreement, or a specified part of the agreement, be enforced as if it were an order of the court.
[Emphasis added]
I also agree with counsel for the wife’s submissions that the words preceding the word “and” in s 87(11)(b) do different work from those that follow it. In a similar way, in s 90KA the purpose of the words preceding the word “and” is to direct the Court to the principles it must apply in determining the question of whether a financial agreement is valid, enforceable or effective. Likewise, the purpose of the words that follow the word “and” is to confer the powers identified in s 90KA(a), (b) and (c) upon the Court in proceedings relating to financial and termination agreements.
The High Court said in Project Blue Sky Inc and Ors v Australian Broadcasting Authority (1998) 194 CLR 355 (McHugh, Gummow, Kirby and Hayne JJ) at 381:
The primary object of statutory construction is to construe the relevant provisions so that it is consistent with the language and purpose of all of the provisions of the statute. The meaning of the provision must be determined “by reference to the language of the instrument viewed as a whole”. In Commissioner of Railways (NSW) v Agalianos, Dixon CJ pointed out that the “context, the general purpose and policy of a provision and its consistency and fairness are surer guides to its meaning than the logic with which it is constructed”. Thus, the process of construction must always begin by examining the context of the provision that is being construed. (footnotes omitted)
Section 90KA must be construed in the context of the provisions of Part VIII of the Act with respect to financial agreements, which enable parties to a marriage to enter into an agreement which determines how their financial affairs are to be arranged in the event that their marriage breaks down. That may be, subject to the provisions of s 90G of the Act, but does not have to be a binding financial agreement, which excludes the operation of Part VIII of the Act.
Insofar as the purpose of financial agreements, whether binding or not binding, is to allow people to reach an agreement as to how they want to deal with their financial affairs in the event of their separation, it would be illogical if the parties to that agreement could not enforce the terms of that agreement in the absence of a question as to its validity, effect or enforceability. As Murphy J said in Fevia & Carmel-Fevia (2009) FLC 93-411 at paragraph 119:
If the parties to a marriage (or parties to a prospective marriage) enter an agreement which otherwise meets the criteria for the formation of a valid and enforceable contract and which purports to determine how, in the event that their marriage breaks down, their financial affairs should be determined, the principles of contract (and equity) will determine the parties’ rights with respect to that contract. So much is clear, in my view, from s 90KA.
I accept counsel for the wife’s submission that there is no basis for construing the opening words of s 90KA as confining the operation of the words “in proceedings relating to such an agreement” to proceedings in which there is a question as to whether the financial agreement in question is “valid, enforceable or effective”.
Although I do not consider that there is any ambiguity as to the natural or ordinary meaning of the words in s 90KA, if there were such an ambiguity, s 15AA of the Acts Interpretation Act 1901 (Cth) provides that:
In interpreting a provision of an Act, the interpretation that would best achieve the purpose or object of the Act (whether or not that purpose or object is expressly stated in the Act) is to be preferred to each other interpretation.
Pursuant to s 15AB of that Act, the Court may have recourse to specified material so as to ascertain the legislative purpose. That material includes any explanatory memorandum or the speech made by the relevant Minister introducing the Bill. The Attorney-General in introducing the Family Law Amendment Act 2000 (Cth), which made provision for financial agreements, said in the Second Reading Speech as follows:
The aim of introducing binding financial agreements is to encourage people to agree about how their matrimonial property should be distributed in the event of, or following, separation. Agreements will allow people to have greater control and choice over their own affairs in the event of marital breakdown. Financial agreements will be able to deal with all or any of the parties’ property and financial resources and also maintenance...
In my view, the legislative purpose of s 90KA is not consistent with the limitation which counsel for the husband attributes to the two opening words of that section.
Even if I am wrong, in this case there is an issue as to the “effect” and hence the “effectiveness” of the agreement. The word “effect” directs the Court to consider the construction of the agreement in question and to look at what the parties intended at the time they entered into the agreement. It is counsel for the husband’s submission that the parties in this case entered into the agreement for the sole purpose of contracting out of their rights pursuant to Part VIII whereas counsel for the wife submits that the intended effect of the agreement is to govern what financial arrangements should be made in the event of the breakdown of their marriage.
For all of the reasons I have discussed, I am satisfied that this Court has the power to grant the anti-suit injunction the wife seeks in this case.
I also do not agree with counsel for the husband’s submission that because the wife is seeking injunctive relief, that these proceedings are not proceedings relating to a financial agreement and do not fall within the definition of a matrimonial cause as defined in s 4(eaa) of the Act. It was not totally clear to me whether this submission was based upon counsel’s submission as to what he said were the words of limitation in s 90KA, or because an injunction was not a proceeding relating to a financial agreement.
I am satisfied, as submitted by counsel for the wife, that, as the proceedings are proceedings relating to a financial agreement and fall within the definition of a “matrimonial cause”, the Court has the jurisdiction to deal with this matter.
As I am satisfied this Court has the power to make the orders the wife seeks, it is not necessary to address the question of the Court’s power to make the orders the wife seeks pursuant to s 34 of the Act, although I note that this Court has previously relied upon the power conferred upon it by s 34 to make injunctions of the kind sought by the wife.
Should the Court exercise its discretion to make the anti-suit injunction sought by the wife?
As submitted by counsel for the wife, pursuant to s 90KA(a), the Court has the “same” powers as the High Court in connection with contracts or purported contracts. It is in that context that this Court must have regard to principles applied by the High Court with respect to the granting or otherwise of the injunctive relief sought by the wife.
The recitals to the agreement include the following:
1.[Mr Cole] and [Ms Abati] intend and plan to enter into marriage. Because of their mutual feelings of love and honour for each other, they enter into this Agreement to eliminate, as much as possible, any future impediment to their marriage which might arise from uncertainties about their respective financial responsibilities to each other.
2.[Mr Cole] and [Ms Abati] desire, to the fullest extent permitted by law:
2.1To resolve before their marriage all possible financial claims which they might have, or later require, against the other or the other’s estate;
2.2To provide for the settlement of all property, and other rights that may arise from the marriage.
3.[Mr Cole] and [Ms Abati] want this Agreement to:
3.1Promote harmony between them;
3.2Reduce the possibility of litigation if they separate;
3.3Create certainty about their financial legal responsibilities towards each other if they separate.
4.[Mr Cole] and [Ms Abati] intend their marriage to be permanent but want to define their financial rights and response abilities [sic] if they separate.
5.[Mr Cole] and [Ms Abati] want to keep all of their current and future separate property free from any claim of the other except as expressly set out in this Agreement.
6.[Mr Cole] and [Ms Abati] intend this Agreement to set out their interest in and rights to property:
6.1As at the date of this Agreement; and
6.2If their relationship ends.
...
9.Each of [Mr Cole] and [Ms Abati] has separate property. In anticipation of their marriage they want to provide that each will retain full and complete control and right of the separate property and the appreciation in their values without interference or claim by the other party.
10.[Mr Cole] and [Ms Abati] want to fix their obligations to each other should they separate. They want to accept the terms of this Agreement instead of any full discharge of all other rights and claims
...
14.It is the desire and intention of [Mr Cole] and [Ms Abati] to retain the sole ownership and control of their own individual assets and financial resources that they now own or may later require as though they were not married and free from any claim of the other arising out of their cohabitation or marital relationship under any law or any state or country, subject to the terms of this Agreement.
...
23.[Mr Cole] and [Ms Abati] want to protect their separate property as defined below, from claims by each other if they separate.
...
26.Both [Mr Cole] and [Ms Abati] will have the unfettered right to dispose of their separate property by gift, transfers to or in trust, or by will during their lifetimes without interference by the other.
27.During the marriage, both [Mr Cole] and [Ms Abati] will have full rights to own, control of disposure of their separate property as if the marriage did not exist; if either of them seeks to mortgage, sell or transfer their separate property and the consent of the other is required by the purchaser or mortgagee, the other will do everything reasonably necessary to complete the intended transaction.
28.Both [Mr Cole] and [Ms Abati] specifically reject the concept of unintentional creation of joint property or unintentional change of separate property to joint property. All property acquired by either of them after their marriage will be separate property unless the owner in writing other [sic] transfers the property to joint tenancy or designates it as joint tenancy. All property acquired by either of them after the marriage will be presumed to be separate property unless clear contrary positive action is taken by the parties.
...
31.Except as specifically provided in this Agreement, each of [Mr Cole] and [Ms Abati] waives, relinquishes and releases all right, title and interest in and to any and all of the others [sic] separate property.
It was a provision of the agreement that all recitals and schedules to the agreement form part of the agreement and be enforceable as clauses of the agreement.
The operative clauses of the agreement itself included the following:
72.Except as otherwise provided in this Agreement neither [Mr Cole] nor [Ms Abati] will have or acquire any right, title or claim in or to the others [sic] separate property or estate upon separation.
73.Each of [Mr Cole] and [Ms Abati] waives, releases and relinquishes any and all claims and rights of every kind, nature or description that he or she may acquire by reason of the marriage in the other’s property or estate under the present or future laws of the state of New South Wales or any other state or territory of Australia having jurisdiction over them.
...
83.If [Mr Cole] and [Ms Abati] separate they each covenant and agree to prepare and execute a Financial Agreement under Section 90C, 90D or 90UD, if necessary, pursuant to the terms of this Agreement.
84.If they separate, neither [Mr Cole] nor [Ms Abati] will seek an order inconsistent with this Agreement.
…
96.This Agreement declares the parties’ intentions as to the disposition of the beneficial interest in their property, notwithstanding any past or future disparity between this Agreement and their contributions to the acquisition or preservation of their property.
97.Neither party will make any claim for any adjustive orders in relation to the property or financial resources of the other.
…
I am satisfied that although one purpose of the agreement was to contract out of Part VIII of the Act, that that was not its only purpose. If it had been the only purpose, as counsel for the husband submitted, both the recitals and the operative provisions of the agreement to which I have referred would be otiose. In my view, the agreement makes the parties’ intentions clear. I am satisfied that the purpose of the agreement was to define the parties’ respective financial positions in the event of their separation, which included the retention of the property they each owned as at the date they each signed the agreement. It is a contract and they are bound by the provisions of that contract, irrespective of the fact that the agreement is a binding financial agreement and that this Court cannot make orders pursuant to Part VIII of the Act.
In my view, the husband’s decision to seek orders in the Denpasar District Court with respect to the property in the wife’s name in Indonesia flies in the face of the provisions and the intent of the agreement.
As previously discussed, counsel for the husband addressed in some detail the Court’s equitable jurisdiction to grant injunctive relief “where a party has commenced proceedings in a foreign court in breach of a contractual promise, for example, in breach of an exclusive jurisdiction clause, a choice of court clause, an arbitration agreement or an agreement not to sue at all”. However, as counsel for the wife submitted, the Court’s power is not confined to exclusive jurisdiction clauses and, as conceded by counsel for the husband, the Court’s power is not limited to closed or existing categories.
The promises the husband and wife have made in this case are not limited to a promise not to commence proceedings in another jurisdiction. In this case, the husband and the wife have promised not to seek an order inconsistent with the terms of the agreement. That agreement provides, when read in conjunction with the recitals to the agreement, that “except as otherwise provided in this Agreement neither [Mr Cole] nor [Ms Abati] will have or acquire any right, title or claim in or to the others [sic] separate property or estate upon separation”.
In all of the circumstances I am satisfied that the husband, by the issuing of proceedings in the Denpasar District Court or any other court, seeks to do what he has contracted not to do. In my view, the wife is entitled to rely upon the provisions of the agreement entered into in good faith, she herself foregoing any claim against the husband’s property as well as foregoing any rights she may have had pursuant to Part VIII of the Act.
Counsel for the husband submitted that even if the Court is satisfied as to its power to make the order the wife seeks, that it should nonetheless not exercise its discretion to do so. The basis of this submission was that:
· The husband and wife having entered into the agreement on the understanding as to where they would reside, and the wife having almost immediately acted to the contrary, it would be vexatious and oppressive for her to seek to rely upon the provisions of the agreement to her advantage when she has acted contrary to the understanding upon which the agreement was based; and
· It would be inappropriate for this Court to endeavour, by orders in personam, to hinder the exercise of jurisdiction by the courts of another country, in this case the Indonesian courts.
In support of this submission, counsel for the husband relied upon Recital 12 of the agreement which says as follows:
[Mr Cole] and [Ms Abati] are residence [sic] of New South Wales, Australia and maintain their primary residence in New South Wales, Australia. [Ms Abati’s] parents live in Indonesia, and [Mr Cole] and [Ms Abati] may visit Indonesia for a portion of each year. [Ms Abati] may inherit property in Indonesia. Despite this, they intend to maintain their primary home in New South Wales, Australia and remain residents of the State of New South Wales and the country of Australia.
Counsel for the wife relied upon the fact that the provisions of the agreement envisaged the possibility of the parties changing their state or country of residence. In response to counsel for the husband’s submission that the wife, having taken up residence in Indonesia, had not taken any steps in accordance with clause 57 of the agreement to review the agreement and execute a new agreement with the necessary amendments to conform with the law or country of the new state or country of residence, counsel for the wife submitted that clause 57 refers to “the parties” and does not contemplate a change of residence by one party. This is consistent with clause 57.2, which provides that the parties “will execute a new Agreement with all the amendments that are reasonably necessary to conform to the law of the state or country of their new residence” [emphasis added].
It is the husband’s evidence that the wife “returned to Indonesia to give birth to [J] to be near her family”. There is no evidence to suggest that at the time the wife entered into the agreement she did not intend to live permanently in Australia or for that matter to return when she left Australia in anticipation of J’s birth.
As counsel for the wife submitted, whilst parties may not be contemplating separation at the time of entering into a financial agreement, they enter into such agreements having regard to the possibility that they might separate.
I am satisfied that it is appropriate to exercise the Court’s discretion in this case in favour of the wife. As counsel for the wife submitted, refusal to do so would be likely to result in the loss of the benefits intended to be conferred upon the wife by the agreement, particularly given the husband’s concession that he will institute proceedings in the Denpasar District Court, supported by evidence that that Court will not be bound by the provisions of the agreement. The parties entered into the agreement of their own free will, an agreement which precludes courts exercising jurisdiction pursuant to the Act from making orders pursuant to Part VIII of the Act, and which, having regard to the schedules to the agreement, confers a significant benefit upon the husband.
I do not agree that in all of the circumstances of this case it would be, as submitted by counsel for the husband, “an inappropriate lack of judicial restraint to endeavour by orders in personam to hinder the courts of another country in acting entirely the same way where they properly hold jurisdiction”. This injunction is not in any way an attempt to hinder the jurisdiction of any other court. It is an injunction directed to the husband to prevent what I am satisfied would be unconscientious conduct on his part, given the provisions of the agreement he has entered into.
In all of the circumstances, I propose to make the orders sought by the wife to give effect to the terms of the agreement entered into by the parties, the core of which provides that the husband and the wife make no claim against the property of the other in the event of separation.
PAYMENT IN THE EVENT OF THE BIRTH OF A CHILD
The wife in her application sought an order that pursuant to clause 81.1 of the agreement the husband forthwith pay to the wife the sum of $100,000 together with interest from 1 January 2014 to the date of judgment by payment into the Trust Account of her solicitor Nicholes Family Lawyers.
Clause 8.1 of the agreement provides as follows:
If [Mr Cole] and [Ms Abati] separate, and a child (or children) is born to them or is mutually accepted into the household:
81.1[Mr Cole] will pay to [Ms Abati] a lump sum of $100,000 per annum, until such child or children turns 18 years of age or otherwise ceases to live with [Ms Abati] or otherwise becomes financially self supporting [sic];
…
Clause 65 of the agreement provides that “[t]his Agreement will not change any obligation on either party to support a child of the marriage”.
Counsel for the husband’s primary submission was that, notwithstanding what appears to be the inconsistency between clauses 65 and 81.1 of the agreement, and having regard to the heading “Child Maintenance” which immediately precedes clause 81, clause 81.1 of the agreement is clearly a provision for child support and is void by operation of s 90E(a) of the Act. Counsel for the husband further submitted that, notwithstanding clause 54 of the agreement provides that “[h]eadings are for convenience only and are not intended to change the interpretation or enforceability of this Agreement and have no further meaning, force and effect”, I should have regard to the heading “Child Maintenance” which immediately precedes clause 81 of the agreement, and that the words “Child Maintenance” should be read as “Child Support”.
Counsel for the husband further submitted in the alternative that, if the payment is not child support, it is for the maintenance of the wife and is similarly void by operation of s 90E(a).
Section 90E of the Act provides as follows:
A provision of a financial agreement that relates to the maintenance of a spouse party to the agreement or a child or children is void unless the provision specifies:
(a)the party, or the child or children, for whose maintenance provision is made; and
(b)the amount provided for, or the value of the portion of the relevant property attributable to, the maintenance of the party, or of the child or each child, as the case may be.
Counsel for the wife submitted that, when read in conjunction with clause 65 of the agreement and having regard to clause 54 of the agreement, the proper construction of clause 81.1 is that it imposes an obligation upon the husband to make certain payments upon the happening of certain events. In this case, those events are the parties’ separating, and either a child or children being born to them or a child being mutually accepted into the household, and based upon that construction, counsel for the wife submitted, s 90E has no application to this case.
Although clause 65 provides that the “Agreement will not change any obligation on either party to support a child of the marriage”, in my view, that does not preclude the agreement making provision for the support of a child albeit that the provisions of the agreement may not satisfy the relevant party’s obligation to support the child the subject of the agreement. Clause 65 is also arguably inconsistent with clause 81.2 of the agreement which, although it does not make specific provision for payments for the child or children’s support, appears to deal with the establishment of a “maintenance trust” [emphasis added].
Insofar as counsel for the husband submitted that the obligation is one to support the wife, that is arguably not consistent with clause 80 of the agreement, which is not only preceded by the heading “Spousal Maintenance” but also makes specific provision for lump sum spousal maintenance within three months of separation.
As the Full Court said in Kostres & Kostres (2009) FLC 93-420 at paragraph 127:
We are of the view that, while common law principles of construction undoubtedly apply and can be used to avoid absurdity, the terms of the agreement must accurately reflect the intention of the parties at the time of the making of the agreement, and be unambiguous. In other words, the meaning to be given to the expressions used in the agreement must be clear and their meaning certain.
In my view, it is not possible from the words of the agreement, and in particular clause 81.1, to discern the intention of the parties with any certainty.
I am not satisfied that the meaning of clause 81.1 and the intention of the parties in this case is clear and, in my view, on that basis clause 81.1 of the agreement is void for uncertainty. On that basis, I propose to make the order the husband seeks and sever clause 81.1 from the agreement.
Nor do I agree with counsel for the wife’s submission that, if clause 81.1 is a provision for the support of a child, it meets the requirements of s 90E. Even if it may be possible to identify the child or children of the marriage or a child accepted into the household by general description, I am not satisfied that the relevant clause specifies the amount, if any, provided for each of those children.
Counsel for the husband further submitted that clause 81.2 was void for uncertainty, however neither the wife nor the husband sought orders with respect to this clause, either on the part of the wife by way of enforcement or on the part of the husband that clause 81.2 be severed from the agreement. In those circumstances, I do not propose to make orders with respect to clause 81.2 of the agreement and, insofar as I am proposing to make a declaration pursuant to s 90G(1B) that the agreement is binding, that is not to be taken as a determination as to the validity or otherwise of clause 81.2. That is an issue that remains to be determined in the event that the wife seeks to enforce that clause of the agreement.
THE CALCULATION OF INTEREST PAYABLE (IF ANY) ON THE LUMP SUM SPOUSAL MAINTENANCE
The wife in this case seeks an order for the payment of interest on the sum of $100,000 to be paid by the husband pursuant to clause 80 of the agreement from 1 April 2013 to date.
Pursuant to s 90KA(b) of the Act, the Court has the power to order that a party to an agreement pay interest to another party to that agreement, from the time when the amount became or becomes due and payable, at a rate not exceeding the rate prescribed by the applicable Rules of the Court.
As counsel for the husband correctly submitted, the Court has discretion as to whether or not it makes an order for the payment of interest. However, it was not submitted by counsel for the husband that the Court should not exercise that discretion in favour of the wife but rather that any order for the payment of interest should not run until the expiry of a reasonable period, which he said was at least 28 days after 21 November 2013, the date upon which the wife signed the separation declaration.
It was submitted by counsel for the husband that the agreement had no “force and effect” until 21 November 2013 when the separation declaration was signed and therefore that the $100,000 was not “due and payable” until that date.
Clause 80 of the agreement provides for the payment of lump sum spousal maintenance of $100,000 within three months of separation. Although it is agreed that separation occurred on 8 December 2012, counsel for the husband submitted that, pursuant to clause 41 of the agreement, separation is deemed to have occurred either on the basis that the husband and the wife have lived separately and apart for a period of six months other than due to the illness or incapacity of one of them, their children or other relatives, employment or study commitment of one of them; or that one of them delivers to the other a letter stating that they are presently living separately and apart from one another. In this case, absent that letter, the relevant date of separation in this case is 8 June 2013, being six months after the date of final separation.
I agree with counsel for the wife that it is the terms of the agreement itself which determine the parties’ obligations, in particular when and what amounts are payable pursuant to that agreement, and not the date on which the separation declaration is signed. For it to be otherwise would render meaningless the provisions of the agreement.
Although I do not agree with counsel for the husband’s submission that the amount was not due and payable until 21 November 2013 when the separation declaration was signed, I also do not agree with his submission that interest should run from 1 April 2013, which I assume is based upon the agreement’s provision for payment of the principal sum within three months of the parties’ physical separation.
The husband was required to make the payment within three months of separation. As outlined above, separation is itself defined in the agreement as occurring either because the parties have lived separately and apart for six months or because one of them has delivered a letter to the other stating that they are living separately and apart. In this case, separation is deemed to have occurred after the husband and the wife had been living separately and apart for six months, which would make the date of separation 8 June 2013. The deemed date of separation pursuant to the terms of the agreement being 8 June 2013, the husband had three months after this date to make the payment, which would make 8 September 2013 the date by which he should have paid the wife the principal sum of $100,000.
On that basis, I am satisfied that I should exercise my discretion to order that interest be paid by the husband on the sum of $100,000, calculated in accordance with the Rules as and from 8 September 2013 until 20 August 2014, the date of payment of the principal sum.
I certify that the preceding one hundred and sixteen (116) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Macmillan delivered 23 March 2015.
Associate:
Date: 23 March 2015
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