Astil and Astil

[2008] FamCA 469

FAMILY COURT OF AUSTRALIA

ATIL & ASTIL [2008] FamCA 469

FAMILY LAW – Property – Superannuation

Family Law Act 1975 (Cth)

Langford & Coleman (1993) FLC 92-346, (1992) 16 Fam LR 228
Fooks & Clark (2004) FLC 93-183, (2005) 32 Fam LR 1498
Ecrosteel Pty Ltd v Pefor Printing Pty Ltd (Unreported, Supreme Court, NSW, Santow J, 12 November 1997)

APPLICANT: Mrs Astil

RESPONDENT: Mr Astil

FILE NUMBER: BRC 1261 of 2008

DATE DELIVERED: 27 June 2008

PLACE DELIVERED: Brisbane

PLACE HEARD: Brisbane

JUDGMENT OF: Murphy J

HEARING DATE: 19 June 2008

REPRESENTATION

COUNSEL FOR THE APPLICANT: Dr Sayers

SOLICITOR FOR THE APPLICANT: Schultz Toomey O'Brien Lawyers

COUNSEL FOR THE RESPONDENT: Mr Nevison

SOLICITOR FOR THE RESPONDENT: Ferguson Cannon

Orders

1. That the Application in a Case filed by the wife on 18 February 2008 be dismissed.

2. That the amended application of the wife filed 11 April 2008 be dismissed.

IT IS NOTED that publication of this judgment under the pseudonym Astil & Astil is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth)

FAMILY COURT OF AUSTRALIA AT BRISBANE

FILE NUMBER: BRC 1261 of 2008

MRS ASTIL

Applicant

And

MR ASTIL

Respondent

REASONS FOR JUDGMENT

1. On 13 September 1995 the husband and the wife entered into consent orders.

2. Those orders were made pursuant to s 79 and s 80 of the Family Law Act 1975 (Cth) (“the Act”) and, as s 81 of the Act contemplates, sought to bring to an end the financial relationship between the parties.

3. The orders have been carried into effect insofar as they relate to the property of the parties or either of them existing at the time that the orders were made.

4. The current application relates to those parts of the orders dealing with the husband’s then superannuation entitlement which, at that time, was some 12 years away from its earliest vesting date.

5. The orders made provision for the wife to receive a future entitlement in respect of that superannuation.

6. The difficulties arise because, at the time when the orders were made, the court had no power to make superannuation splitting orders and the present application seeks, in effect, to enforce a liability asserted to exist pursuant to those orders but which crystallised only relatively recently.

7. Whether that assertion is correct or not depends upon an interpretation of those orders.

Legal Parameters of the Dispute

1. Despite suggestions to the contrary in written submissions on behalf of the husband, his counsel, Mr Nevison ultimately conceded that the court had power to entertain the wife’s application.

2. That concession is, in my view, properly made.  Irrespective of the provisions of Clause 8(b) of the consent orders, it seems to me that the nature of the wife’s application is, in effect, an application for enforcement or, perhaps, an application for directions with respect to the enforcement of the orders.

3. At the outset of the hearing I indicated to the parties that I considered irrelevant much of the material contained in the husbands affidavit of evidence in chief (which related to the intention of the parties leading up to the making of the orders).

4. It was held In the Marriage of Langford & Coleman (1993) FLC 92-346 at 7 79,670 - 671, (1992) 16 Fam LR 228 at 232 - 3 per Nygh J that: -

   The question therefore arises to what extent this Court can take account of the subjective intention of the parties in interpreting the consent orders made, notwithstanding the very clear language which is found in Order 2 …

   …

   However, in my view, regrettably, there is clear authority for the  proposition that at least in matrimonial causes once any financial agreement reached between the parties is embodied in consent orders, it is to these orders alone that the Court must look. The Court cannot take Into account whatever agreement might or might not have been reached between the parties which led to the making of the consent orders, and the authority for that proposition is found in [English authority cited]

   …

   These details, although they relate respectively to the law of Hong Kong and to the law of England, have been treated as authoritative in this country and were followed and applied most notably by the Full Court of this Court in In the Marriage of Robertson and Wills (1981) 8 Fam LR 131 at 141 - 2 by Asche J and at 144 by Fogarty J. Although in those cases, admittedly, the courts were concerned with the rights of appeal arising from consent orders and stressed the fact that a consent order can be appealed from, like any other order, in my view the principle is wider than that. It follows that

   if an order made by consent must be treated like any other non-consensual court order it must be read and interpreted quite independently of what the parties subjectively might have intended thereby. It must be read as standing on its own feet, as it were.

5. The principle there enunciated has been applied subsequently (albeit in a different context) by a later Full Court in Fooks & Clark (2004) FLC 93-183 at 79,067, (2005) 32 Fam LR 1498 at 155 - 6.

The Consent Orders

1. The orders provide, relevantly: -

   6.If the Husband does not elect to take voluntary retirement from the Queensland [Public Service] at age fifty-five (55) years, he will forthwith pay to the Wife the sum of ONE HUNDRED THOUSAND DOLLARS ($100,000.00) and upon a payment of the sum of $100,000.00 Clauses 7, 8 and 9 forthwith lapse.

   7.That with respect to the Husband’s superannuation entitlement, if:

   (a)The Husband retires due to incapacity;

   (b)The Husband receives a redundancy package; or

   (c)The Husband retires at the age of 55 years:

   And in any of the above events referred to in (a), (b) or (c) herein the Husband receives his superannuation entitlement in total as a lump sum then the superannuation entitlement received by the Husband, after the payment of any taxes and duties thereon, will be divided between the Husband and Wife as follows:

   (i)One-half to the Wife; and

   (ii) One-half to the Husband.

   8.That with respect to the Husband’s superannuation entitlement the Husband and Wife have liberty to restore the matter for determination by the Family Court of Australia at Brisbane of the Wife’s entitlement to the said superannuation entitlement upon the giving of twenty-one (21) days notice to the other in the following events:

   (a)That in the event the Husband retires at age fifty-five (55) or for reason of incapacity or by way of redundancy and is required to take partially or fully his superannuation entitlement by way of pension; or

   (b)In any other circumstances in which the Husband’s employment is terminated by either the Husband or the employer.

   9.The Husband is hereby restrained from commuting his superannuation entitlement to a full or partial pension.

   10.The Husband shall deliver to the Queensland Superannuation Office within seven (7) days of receipt by him, a sealed copy of these Orders.

   11.The Husband shall forthwith obtain a life assurance/life insurance policy on himself nominating the Wife as sole beneficiary for an amount of ONE HUNDRED THOUSAND DOLLARS ($100,000.00) as stated in Clause 6 hereof or her entitlement pursuant to Clauses 7 or 8 hereof and the Husband is hereby restrained from dealing with or disposing of the said policy and any entitlements thereunder or removing the Wife as sole nominated beneficiary thereunder until such time as the sum of ONE HUNDRED THOUSAND DOLLARS ($100,000.00) as stated in Clause 6 hereof or her entitlement pursuant to Clauses 7 or 8 hereof is paid PROVIDED HOWEVER the entitlement of the policy may be reduced proportionally to any monies paid by way of lump sum or pension by the Husband to the Wife with respect to any determination by the Family Court pursuant to any Application made by the Wife under the provisions of Clause 8.

Factual Parameters of the Dispute

1. The husband turned 55 in May 2007.

2. Initially, the husband had determined to retire in July 2007. He had completed a document on the internet in anticipation of doing so.  That document was not produced in evidence.

3. However the husband said in cross-examination, and I accept, that this document was not effective to give formal notice of retirement, nor did it effect same. 

4. Rather, the document provided the Public Service with information about the reasons for retirement.  The husband, said, in effect, that the document was used to attempt to dissuade employees from retiring.

5. At about the same time it seems the husband had shared his intention to retire with his colleagues and a retirement function was organised for May 2007 as a result.

6. However, on 13 April 2007, the husband sought advice from solicitors with respect to his obligations pursuant to the consent orders just referred to.

7. The husband deposes in his affidavit of evidence in chief that his “interpretation of the order was that as long as I did not elect to retire on my birthday and paid the applicant $100,000.00 on or before my birthday then I had complied with Order 6 and Orders 7, 8 and 9 forthwith lapsed”.

8. In the same affidavit the husband deposes that “the advices from my lawyer confirmed my interpretation of the order made in the Family Law court on 13 September 1995”.

9. Pursuant to that advice the husband paid to the wife the sum of $100,000.00 in purported reliance upon an obligation to do so pursuant to Clause 6 of the orders earlier quoted.

10. The payment was made on 23 April 2007 but was preceded by a letter dated 19 April 2007 sent by his solicitors to the wife’s solicitors:-

    Dear [the wife],

    RE: [ASTIL V ASTIL] PROPERTY SETTLEMENT

    We refer to the abovementioned matter and advise we hold instructions to act on behalf of [the husband] in relation to finalising his obligations pursuant to the Consent Orders entered into by each of you in 1995.

    We confirm that pursuant to clause 6 of the Orders, our Client intends to make a payment to you in the sum of $100,000.00, given that he does not intend to take voluntary retirement at age 55.

    Accordingly, we would be pleased if you would contact our office to provide bank account details for where you would like such payment to be deposited …

11. The husband deposes that his initial intention to retire in July had, as a result of his legal advice, changed.  He deposes that he had “… decided not to retire during my 55^th year to be sure no claim could be made by the applicant” and, elsewhere, that:

    I had intended to retire in the first week of July 2007 and was using my recreation leave prior to that date but following advice from [his lawyer] on 13 April 2007 I elected not to retire until age 56 or later. I cancelled a retirement function previously arranged for May 2007 and did not submit a Separation Report.

12. The reference to a “Separation Report” is a reference to a document which, it emerged during the cross-examination of the husband, is the document by which a serving public servant notifies formally his intention to retire and retirement was effective for all purposes from the date nominated in that document.  Again, the document was not in evidence.

13. Pursuant to his (now) expressed intention, the husband paid the wife $100,000 on 23 April, 2007.  In order to do so, the husband accessed funds within his private superannuation fund

14. In late May 2007, the husband received accounting advice to the effect that, because no vesting event had occurred, the husband was not permitted to access the funds as he had in fact done. It was necessary for the husband, then, to repay that money to the fund. He did so on 29 June 2007.

15. As a result (and also, apparently, as a result of having other debts to which he deposes) the husband deposes that he needed to access lawfully his superannuation funds.

16. He determined to retire in order to access those funds and, in order to do so, put in train a sequence of events.

17. First, he told his supervisor that he was now intending to retire. He says this occurred “shortly before 11 June 2007”.

18. The husband says that, at about this time, he completed the Separation Report and gave as his effective date of retirement 6 July 2007 and says, accordingly, this is the date upon which his retirement became effective.

19. The husband deposes: -

    30.I had not elected to retire at age 55 years and paid the sum of $100,000 to the applicant prior to my 55^th birthday. …I had decided not to retire during my 55^th year to be sure no claim could be made by the applicant. It was only due to the fact I could not utilise funds from my self managed super fund to pay the applicant that I was forced to retire.

20. It is common ground that, upon the vesting of the husband’s superannuation, he was entitled to a net amount of $533,767.60 and that he was paid those funds shortly thereafter.

21. If the contention of the husband is correct he has satisfied his obligations pursuant to the orders by reason of making the payment to the wife of $100,000.00 on 23 April 2007.

22. If the contentions of the wife are correct she is owed one half of the amount received by the husband.  It is common ground that, if her contention is correct, she is owed $166,883.80 by the husband (one-half of the net amount received less the $100,000.00 already received).

Interpretation of the orders

1. This case is a good example of the difficulties inherent in drafting orders (and in interpreting them) when events a significant distance into the future are contemplated within them. 

2. As Justice Santow said in Ecrosteel Pty Ltd v Pefor Printing Pty Ltd (Unreported, Supreme Court, NSW, 12 November 1997, p.6):

   Orders have to cope with situations not readily foreseen, where their later application, and hence their precise interpretation, may be open to argument.

3. In this case, it can be argued that each of Orders 6 and 7 which, on their face, provide for differing eventualities have been satisfied.

4. It can be argued, as it was for the husband, that, on … May 2007 the husband was “at the age of 55 years” and, on that date, the husband “[did] not elect to take voluntary retirement”.  In fact, the argument runs, on that date, he maintained his election not to retire consequent upon the legal advice received a month or so earlier. 

5. Having made that election prior to that date, he was, according to the argument, entitled to, as it were, pre-pay his obligation to the wife pursuant to Order 6 and that is what he did on 13 April and, in accordance with the terms of that Order, Orders 7, 8 and 9 became redundant.

6. It is submitted, then, on behalf of the husband that he made an election on 13 April 2007 when he determined not to retire at age 55, that election continued until his birthday in May 2007 and, having reached that date with that election still alive, and having pre-paid the $100,000.00 to the wife in contemplation of that election being alive on his birthday in May 2007, Order 6 dictates that the wife’s entitlement is satisfied.

7. On the view of the orders contended for by the wife, the husband retired “at the age of 55 years” within the meaning of Order 7 because, in simple terms, when he retired on 6 July 2007 the husband was aged 55 (as distinct from aged 56 or older).

8. That contention proceeds, in effect, that because the husband in fact retired when he was aged 55 (as distinct from 56), he elected to take voluntary retirement at that age and Clause 6 does not apply.

What is the proper interpretation of the Orders?

1. The orders, read as a whole, provide for a division of property as at 1995 which, in respect of the then property of the parties or either of them, brought to an end the financial relationship between the parties.

2. At that time, it was not possible to completely bring an end to the financial relationship between the parties if – as it seems to me is clearly apparent from these orders - it was intended that the wife should receive something in respect of (although not necessarily a share in) the husband’s ultimate superannuation entitlement.

3. Orders 6 and 7, when read together, provide for the ascertainment of the wife’s entitlement and husband’s concomitant liability on the occurrence of three vesting events. 

4. Two of those events (incapacity and redundancy) are involuntary and each may or may not occur for a significant period of time. 

5. The third (the decision to retire) is voluntary.  But, in contrast to the other two events, it was not possible for that to occur prior to the husband’s 55^th birthday (then some 13 years into the future).

6. The orders are clearly, in my view, an attempt to provide a future amount certain to the wife by reference to the prospective entitlement of the husband to superannuation, but which amount was dependant upon future uncertainties The orders attempt to make the future uncertainties (when might the husband’s superannuation vest and in what amount) as certain as what could be done at the time that the orders were made.

7. The orders did so by stipulating three specific occasions upon which the entitlement of the wife could be calculated:

   (a)the date of retirement due to incapacity (if occurring prior to the husband’s 55^th birthday);

   (b)the date of receipt of a redundancy (if occurring prior to the husband’s 55^th birthday); or, otherwise

   (c)the husband’s 55^th birthday (being the date upon which – if coupled with permanent retirement from the workforce - the earliest vesting of the husband’s superannuation could lawfully occur by voluntary action of the husband).

8. In order to ascertain the wife’s entitlement, and the husband’s concomitant liability, two questions, then, need to be asked. 

9. First, did either incapacity or receipt of a redundancy occur prior to the husband’s 55^th birthday?   Secondly, and if the answer to the first question is no, what has the husband elected to do about retirement as at his 55^th birthday?

10. Here, the answer to the first question is clearly no, and the answer to the second question is that the husband elected not to retire as at the date of his 55^th birthday.

11. The expressions, “at age fifty-five (55) years” used in Order 6 and “at the age of fifty-five (55) years”, used in Order 7 are, in the context of interpreting the orders effectively identical and should be interpreted as carrying the same meaning in each order.

12. The interpretation just advanced sees the expression in each case as meaning “at the date of the 55^th birthday”. 

13. In terms of Order 7, the husband did not retire “at the age of 55 years” because he did not retire on his 55^th birthday and, in fact, retired after the date of his 55^th birthday.

14. Similarly, in terms of Order 6, the husband “[did] not elect to take voluntary retirement … at age fifty-five (55) years” because the election manifested as at his 55^th birthday was to not retire and, on that date, he did not in fact retire.

15. I agree that “pre-payment” of the sum provided for in Order 6 does not affect the operation of that order provided if, between payment and the husband’s 55^th birthday, the husband does not elect to take retirement at that date.  Here, he did not.

16. In the latter circumstance, the payment of the money causes Orders 7, 8 and 9 to lapse “forthwith” upon the husband’s 55^th birthday, because it is on that date that the election giving rise to the payment is measured.

Conclusion

1. It follows that, in my judgment, the husband discharged his obligation pursuant to the orders by paying the sum of $100,000 to the wife on 23 April, 2007.

2. It follows that the wife’s application should be dismissed.

3. I order accordingly.

I certify that the preceding sixty two (62) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Murphy

Associate: 

Date:  27 June 2008