Clowes & Konig
[2021] FamCA 597
•11 August 2021
FAMILY COURT OF AUSTRALIA
Clowes & Konig [2021] FamCA 597
File number(s): SYC 4231 of 2021 Judgment of: HARPER J Date of judgment: 11 August 2021 Catchwords: FAMILY LAW – DE FACTO RELATIONSHIP – Review of registrar’s decision – Where application by de facto wife to set aside financial agreement entered into by parties – Whether husband contends the court’s jurisdiction is ousted as a result of a binding financial agreement – Where husband contends order for him to file and serve a financial statement made without jurisdiction whether proceedings are a “financial case” – Application misconceived and dismissed. Legislation: Family Law Act 1975 (Cth) ss 4AA, 90SA, 90SM, 90UF, 90UM,114
Family Law Amendment (De Facto Financial Matters and other Measures) Act 2008 (Cth)
Property (Relationships) Act 1984 (N SW)
Family Law Rules 2004 (Cth) r 13.05
Cases cited: Barre & Barre [2021] FamCA 101
Norton & Locke [2013] FamCAFC 202
Number of paragraphs: 17 Date of last submission/s: 6 August 2021 Date of hearing: On the papers Place: Sydney Counsel for the Applicant: Mr Strik Solicitor for the Applicant Urban Family Lawyers Counsel for the Respondent: Ms Rusiti Solicitor for the Respondent: Parker Law ORDERS
SYC 4231 of 2021 BETWEEN: MR KONIG
Applicant
AND: MS CLOWES
Respondent
ORDER MADE BY:
HARPER J
DATE OF ORDER:
11 AUGUST 2021
THE COURT ORDERS THAT:
1.The Applicant Husband’s Application in a Case filed on 26 July 2021 is dismissed.
2.The Applicant Husband is to pay the Respondent Wife’s costs of and incidental to the Application in a Case, as agreed, or assessed in accordance with the Rules.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to 17.02 Family Law Rules 2004 (Cth).
IT IS NOTED that publication of this judgment by this Court under the pseudonym Clowes & Konig has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
HARPER J
These are property adjustment proceedings between the de facto wife Ms Clowes (“wife”) and the de facto husband Mr Konig (“husband”).
There is no dispute the de facto relationship was some twenty years long, between October 2000 and November 2020 when the parties lived in New South Wales. There seems to be no dispute that the de facto relationship has broken down.
On 15 June 2005 the parties entered into a Domestic Relationship Agreement ("the Agreement") pursuant to the Property (Relationships) Act 1984 (NSW). It is common ground that, by reason of the Family Law Amendment (De Facto Financial Matters and other Measures) Act 2008 (Cth) (Item 88), the Agreement is deemed to be a financial agreement to which Part VIIIAB of the Family Law Act 1975 (Cth) ("the Act") applies.
On 10 June 2021 the wife commenced these proceedings. She filed an Initiating Application which seeks, among other things, an order that the Agreement be set aside and orders for alteration of property interests under Part VIIIAB Division 2 of the Act. She filed, as is required by Rule 13.05(1) of the Family Law Rules 2004 (Cth) (“the Rules”), a Financial Statement.
On 15 June 2021 Senior Registrar McGrath made Orders, which included as Order 2 an order that the husband file and serve his Response, Affidavit and Financial Statement within 28 days.
The husband filed an Application in a Case on 26 July 2021 which seeks a review of order 2 made by Senior Registrar McGrath.
By his Response, the husband points out that a declaration pursuant to s 90UF has been made. He argues that the Agreement ousts the jurisdiction of the Court to make any property adjustment order under Division 2 of Part VIIIAB, until it is set aside, because of section 90SA. This expressly provides that section 90SM does not apply if there is a Part VIIIAB Financial Agreement which is binding upon the parties. Section 90SM is the central provision in Division 2 dealing with the adjustment of property interests of parties to a de facto relationship. The husband contended that the proceedings are heading towards a threshold hearing on the issue of whether the Agreement is binding and therefore excludes any jurisdiction of the Court to make property adjustment orders under Division 2.
The husband argued that therefore, the Court cannot direct a person to make financial disclosure, including providing a financial statement, unless the Court has found it has jurisdiction to determine the financial case. He relied upon the Full Court decision of Norton v Locke (2013) 50 Fam LR 517; [2013] FamCAFC 202 (“Norton”). He also argued that while the Court may require the filing of a financial statement "as part of the Court controlling its own processes for hearing the threshold question". However, he contended that a financial statement was not relevant at this stage of the proceedings.
With respect this argument is misconceived.
The decision in Norton held that prior to determining the existence of a “de facto financial cause”, the Court’s jurisdiction was limited to determining whether it had jurisdiction and the power to make orders under s 114(2A) was not enlivened until jurisdiction was established. Here, as the wife submitted, there is no dispute about jurisdiction in the sense the de facto relationship was about twenty years long, and the parties lived in NSW. The parties’ relationship satisfied the definition of a de facto relationship in s 4AA of the Act. The husband’s argument appeared to conflate a threshold question on jurisdiction, as to whether there exists a de facto relationship within s 4AA, with what he called a threshold question as to whether a financial agreement should be set aside. Norton does not support the husband’s argument.
The wife's Initiating Application does not expressly refer to a jurisdictional basis for setting aside the Agreement. But on its face, her application to set aside the Agreement is brought on any available basis, in particular, pursuant to s 90UM, even if other grounds may ultimately be relied upon as well. This is plainly a “de facto financial cause” within subparagraph (e) of the definition in s 4 of the Act, being “proceedings with respect to a Part VIIIAB financial agreement that are between…the parties to that agreement.”
More to the point, Rule 13.05(1) provides that a party filing a response to a "financial case (other than by an Application for Consent Orders) must file a Financial Statement at the same time".
12. In the Dictionary to the Rules a "financial case" means a case
“…involving an application:
…
(b) relating to the property of the parties to a marriage, or of a de facto relationship after the breakdown of the relationship , or of either of them, including:…
(iva) an application under section 90UM of the Act in relation to a Part VIIIAB financial agreement or a Part VIIIAB termination agreement
The wife's case as presently set out in her Initiating Application is clearly a “financial case” within the definition in the Rules irrespective of whether the Court's jurisdiction under Division 2 of Part VIIIAB is excluded. This is because it includes an application to set aside the agreement under s 90UM, which the definition of "financial case" specifically mentions. It is also an application “in relation to” the property of the parties to a de facto relationship more generally, including the contractual choses in action they enjoy by reason of the Agreement itself, if it is not set aside: Barre & Barre [2021] FamCA 101 at [216] to [218].
Consequently, quite apart from any Court orders, the husband is obliged in any event to file a Financial Statement with his response to comply with Rule 13.05(1). Order 2 of the Orders of Senior Registrar McGrath simply reflects the requirements of the Rules.
I reject the husband's arguments. The husband's Application in a Case will be dismissed.
The wife seeks costs of the husband’s application. The husband made no submissions about costs. The husband has been wholly unsuccessful, bringing a misconceived application. I am satisfied this justifies a departure from the position set out in s 117(1) of the Act. I will order the husband to pay the wife’s costs as agreed or assessed.
I certify that the preceding seventeen(17) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Harper. Associate:
Dated: 11 August 2021
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