Ellerton & Jennings
[2021] FedCFamC1A 39
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1) APPELLATE JURISDICTION
Ellerton & Jennings [2021] FedCFamC1A 39
Appeal from: Jennings & Ellerton [2021] FCCA 1213 Appeal number(s): SOA 17 of 2021 File number(s): ADC 4050 of 2020 Judgment of: STRICKLAND J Date of judgment: 22 October 2021 Catchwords: FAMILY LAW – APPEAL – FINANCIAL – Where the parties executed a Binding Financial Agreement intended to cover all financial issues arising from their relationship including how property, financial resources and spousal maintenance would be dealt with in the event of separation – Where the issue raised on appeal is the respondent’s financial circumstances at the time of the Agreement coming into effect and whether he satisfied the onus that he had to demonstrate that he was unable to support himself at that time without an income tested pension, allowance or benefit – Where the evidence presented by the respondent at the relevant time was not objected to by the appellant on any ground including that it was inadmissible – Where issues raised on appeal were not put to the primary Judge and cannot therefore be raised on appeal – No error by the primary Judge – Appeal dismissed.
CROSS-APPEAL – FINANCIAL – Whether a clause in the Agreement addressing spousal maintenance was void pursuant to s 90E –Where there was no error made by the primary Judge in her interpretation of s 90E and in its application to the clause appealed – Where there is no merit in any of the grounds of cross-appeal – Cross-appeal dismissed.
COSTS – Both parties sought costs – Given the outcome of the appeal and the cross-appeal there should be no order for costs – Costs applications dismissed.
Legislation: Family Law Act 1975 (Cth) s 90E, s 90F
Family Law Amendment (Financial Agreement and Other Measures) Bill 2015
Family Law Amendment (Financial Agreement and Other Measures) Bill 2015 Explanatory Memorandum
Cases cited: Cooper v Fernihough & Anor [2019] FCA 727; 136 ACSR 585
Cumpton & Rainford [2020] FCCA 3441
Guild & Staasiuk [2019] FamCA 167
Metwally v University of Wollongong (1985) 60 ALR 68; [1985] HCA 28
Robinson Helicopter Co Inc v McDermott (2016) 331 ALR 550; [2016] HCA 22
Number of paragraphs: 53 Date of hearing: 7 October 2021 Place: Adelaide Counsel for the Appellant/Cross-Respondent: Ms Boyle Solicitor for the Appellant/Cross-Respondent: Duncan Basheer Hannon Counsel for the Respondent/Cross-Appellant: Ms Ross Solicitor for the Respondent/Cross-Appellant: Camatta Lempens ORDERS
SOA 17 of 2021
ADC 4050 of 2020FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
DIVISION 1 APPELLATE JURISDICTIONBETWEEN: MS ELLERTON
Appellant/Cross-Respondent
AND: MR JENNINGS
Respondent/Cross-Appellant
ORDER MADE BY:
STRICKLAND J
DATE OF ORDER:
22 OCTOBER 2021
THE COURT ORDERS THAT:
1.The appeal be dismissed.
2.The cross-appeal be dismissed.
3.There be no order as to costs.
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 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under a pseudonym has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
INTRODUCTION
On 19 February 2021, Mr Jennings (“the husband”) filed an Amended Initiating Application seeking the following relevant declarations and orders:
1.That a declaration be made by this Honourable Court that the Financial Agreement between the parties dated 21 April 2006 (“the said Agreement”) is invalid and non-binding.
2.That the said Agreement between the parties dated 21 April 2006 be set aside.
3.That the said Agreement be declared void with respect to spousal maintenance and the Agreement be set aside or
4.In the alternative to paragraph 3 that all provisions in the said Agreement relating to spousal maintenance be declared void and set aside.
5.That the [wife] do pay to the [husband] the sum of $500 per week or a lump sum payment of $24,000 or such other sum as this Honourable Court deems appropriate by way of urgent interim spousal maintenance until final orders for spousal maintenance and/or property settlement are made by this Honourable Court.
…
On 15 March 2021, a Judge of the Federal Circuit Court of Australia (now the Federal Circuit and Family Court of Australia Division 2), heard and determined the application insofar as it sought order 4. Her Honour found that the relevant clause dealing with spousal maintenance (clause 19) was not void pursuant to s 90E of the Family Law Act 1975 (Cth), and that s 90F of that Act applied to the Agreement.
By Amended Notice of Appeal filed on 9 August 2021, Ms Ellerton (“the wife”) appeals from the orders made by her Honour on 15 March 2021, asserting that her Honour erred in determining that s 90F applied to the Agreement.
The husband resists the wife’s Amended Notice of Appeal. Further, by his Amended Notice of Cross-Appeal filed on 5 July 2021, the husband alleges the primary Judge erred in also determining that clause 19 of the Binding Financial Agreement (BFA) was not void pursuant to s 90E. The husband’s cross-appeal is resisted by the wife.
BACKGROUND
On 21 April 2006, the parties executed the BFA. Her Honour found at [5] and [6] that the parties intended to cover all financial issues arising from their relationship, including how their property and financial resources and spousal maintenance would be dealt with in the event of separation. Clauses 19, 20 and 21 addressed the topic of spousal maintenance. Those clauses and recital 35 of the BFA make clear that the parties were intending to waive all rights to spousal maintenance, except as provided for in the Agreement.
The parties agreed that the BFA became operative on either 11 or 12 May 2018, being the date of separation.
Section 90E 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.
Section 90F(1) provides as follows:
No provision of a financial agreement excludes or limits the power of a court to make an order in relation to the maintenance of a party to a marriage if subsection (1A) applies
Section 90F(1A) provides as follows:
This subsection applies if the court is satisfied that, when the agreement came into effect, the circumstances of the party were such that, taking into account the terms and effect of the agreement, the party was unable to support himself or herself without an income tested pension, allowance or benefit.
THE APPEAL
The wife’s Amended Notice of Appeal contains the following grounds of appeal:
1.The primary judge erred in determining that section 90F(1A) of the Family Law Act 1975 is applicable to the Financial Agreement the subject of these proceedings (“the agreement”) in circumstances where:
(a)There was no admissible evidence, or alternatively an insufficient evidentiary basis, to support a finding that, when the agreement came into effect, the husband was unable to support himself without an income tested pension, allowance or benefit;
(b)There was admissible evidence to support a finding that, when the agreement came into effect, the husband was able to support himself without an income tested pension, allowance or benefit; and
(c) The husband bore the evidentiary onus.
The first thing to note is that before her Honour, the parties relied on their affidavits and their written submissions. There was no oral evidence given and no cross-examination.
Thus, it was open to her Honour to accept the evidence of one party, and as was said by the High Court in Robinson Helicopter Co Inc v McDermott (2016) 331 ALR 550, at [43]:
…a court of appeal should not interfere with a judge’s findings of fact unless they are demonstrated to be wrong by “incontrovertible facts or uncontested testimony” (Fox v Percy (2003) 214 CLR 118 at [28]), or they are “glaringly improbable” or “contrary to compelling inferences” (Fox v Percy T [29]). …
However, that is not suggested anywhere by the wife here.
The issue squarely raised in this appeal is the husband’s financial circumstances at the time of the Agreement coming into effect, and whether the husband has satisfied the onus that he had to demonstrate that he was unable to support himself at that time, without an income tested pension, allowance or benefit.
The evidence of the husband’s financial circumstances at the relevant time was contained within his affidavit material, and tellingly, none of that evidence was objected to by the wife on any ground, including that it was inadmissible. Thus, it is not only entirely unclear on what basis it is suggested in the first ground of appeal that there was “no admissible evidence” to support her Honour’s findings, but it is also not open to the wife to now suggest, if this is what the wife is doing, that her Honour made her finding on inadmissible evidence (Metwally v University of Wollongong (1985) 60 ALR 68).
In any event, the only “inadmissible” evidence identified in the wife’s summary of argument filed on 27 August 2021, was a document purporting to be a Deed of Agreement between the husband and his son dated 16 October 2018, providing for the transfer of the husband’s interest in the Location C Property to the son. However, that was not a document which was put before her Honour; it was referred to during the hearing and it was agreed that it existed, and, without objection, relevant figures were extracted from it and read to the court. Thus, it is difficult to understand the point attempted to be made here. Plainly, in these circumstances her aHonour was able to take into account that there was such a document, as well as the figures provided.
As a result of her Honour accepting the evidence of the husband as to his financial circumstances at the relevant time, her Honour made the following findings:
16The question then to be determined is whether, at the time when the terms of the Agreement regarding spousal maintenance came into effect – that is, at the time of separation in May 2018 – was the applicant, [husband], able to support himself without an income-tested pension, allowance or benefit?
17According to his Affidavit and his Financial Statement, the [husband] says that his current weekly income is $576, including a small pension payment from his time working in Country A (now $178 per week), and his Australian “Centerlink [sic] Retirement pension” in the sum of $398 per week. His weekly expenses were listed at $720.
18The [husband] tells the Court that his income at the time the parties separated was limited to his Country A pension. In those circumstances it is easy to accept that [the husband] would also have been eligible for a Centrelink income-tested pension or benefit. The [husband] goes on to say that he applied for an Australian aged pension shortly after separation but there were delays in assessing his eligibility. He was eventually granted the pension approximately 9 months later, in late 2018 or early 2019.
19Whether the [husband] was similarly entitled in May 2018, at the time the parties separated may depend on his other financial resources, of course. In his original Affidavit filed 27 August 2020 the [husband] says that [the wife] “divided up” a joint account, taking $2,500 and leaving him with the balance of $2,900 or so. He then relied upon financial support from his brother for a period, before eventually receiving the Australian aged pension.
20The wife argues that the [husband] owned or retained the other assets that he had brought into the relationship, including his half-share in Company B and premises at Location C. He also owned a half share of the business contents which were insured at $100,000 but were likely to be actually valued much less. The [husband] also held approximately $73,000 in savings at the time the Agreement was signed. This financial background is useful, but it does not give me any insight as to what the [husband] owned at the time the Agreement came into effect with respect to spousal maintenance.
21The [husband] says that he relied upon financial support from his brother and also from his son Mr E, including accommodation. This continued until Mr E’s death in October 2020. The applicant continues to live in Mr E’s home with his daughter-in-law and grandchildren and he is not able to meet his own expenses other than with the support of his daughter-in-law and support provided to him by family and friends.
22The [wife] alleges that the [husband] is living with his girlfriend Ms D. The [husband] concedes that he is in a relationship with Ms D, but says they are not living together, and his Centrelink status is still recorded as single. There is no independent evidence to justify the [wife’s] claim.
23The Court has not received any documentation from Centrelink that the [husband] was in receipt, or was likely to have been eligible for a Centrelink pension immediately following separation in 2018, but the evidence indicates that is likely to have been the case. I am certainly satisfied the [husband] was struggling financially after separation and was reliant upon financial support from his family at this time. The [husband] may have held his half-interest in business and the Location C property, but the value of that interest is unknown and may not have affected his eligibility for a government pension or allowance, in any event.
24I note the [husband] transferred his interest in Company B to his son Mr E in the months following separation, allegedly in lieu of various debts he owed to his son. Whether those debts related to financial support provided by Mr E, or related to the business, is unclear, but I do not consider this affects my decision in this matter today.
CONCLUSION
25On the evidence before me, I am satisfied that at the time the Agreement in relation to spousal maintenance came into effect, the [husband] was likely to have been eligible for an income-tested pension, allowance or benefit from the Australian Government. Accordingly, pursuant to s.90F(1A), he is entitled to proceed with an application for spousal maintenance, notwithstanding the terms of the 2006 Agreement and I make orders accordingly.
(Footnotes omitted)
I pause to note that in [16] her Honour incorrectly described the test in s 90F(1A). The test is whether the husband was unable to support himself without an income tested pension, allowance or benefit, not whether he was able to support himself without an income tested pension, allowance or benefit. However, this was not an issue raised in the appeal, and it is readily apparent that the evidence her Honour relied on to make her findings satisfied the correct test.
Thus, this ground has no merit. The husband satisfied the onus that he had to meet by setting out in his affidavit material the relevant facts, and it was open to her Honour to accept those facts and make findings based on them.
The wife also argued in her summary of argument that the husband had failed to make disclosure, failed to depose to relevant information, and there were inconsistencies in his evidence, all of which her Honour failed to take into account.
As to the last point, any inconsistency in the evidence was not something that was put to her Honour, and thus, again, it cannot be raised on appeal (Metwally v University of Wollongong).
As to the lack of disclosure, it was submitted that “[t]he court should have drawn a negative inference against the [husband] as a result”. However, again, that was not a submission made to her Honour, and thus it cannot be raised on appeal.
As to the alleged failure to depose to relevant information, the fact is that the information the husband did present was found by her Honour to be sufficient to satisfy the onus, and thus that complaint can go nowhere.
That effectively disposes of Grounds 1(a) and 1(c).
With Ground 1(b), that was not the wife’s case at trial. Her case was that the husband had not discharged the onus of proof that he was unable to support himself at the time of separation, rather than positively asserting that the evidence demonstrated the reverse, namely that he was able to support himself. Indeed, her Honour was not asked by the wife to make such a finding, and thus, once again, it is not a matter that can be raised on appeal (Metwally v University of Wollongong). Accordingly, there is no merit in this ground of appeal.
Given that each ground of appeal fails, the appeal must be dismissed.
THE CROSS-APPEAL
The grounds of the cross-appeal are as follows:
1.The primary judge erred in determining that the Financial Agreement, the subject of these proceedings, (“the agreement”) satisfies the requirements of Section 90E of the Family Law Act 1975.
2.The primary judge erred in determining that the agreement specifies an amount provided for the maintenance of the parties in accordance with the requirements of section 90E of the Family Law Act.
3.The primary judge erred in determining that the wording of clause 19 of the agreement includes any reference to an amount of maintenance of a party.
4.The primary judge erred in determining that the phrase “no provision of spousal maintenance is necessary or desired” implicitly or explicitly identifies a quantum of spousal maintenance.
It is readily apparent that these are not discrete grounds of cross-appeal. Ground 4 is the basis for Ground 1, and Grounds 2 and 3 are unnecessary. The grounds can be restated in one ground as follows:
Her Honour erred in finding the phrase in clause 19, that “no provision of spousal maintenance is necessary or desired”, specified “an amount for the purpose of s 90E(b)”.
The relevant clauses of the BFA in relation to spousal maintenance are:
19.The parties acknowledge that they are currently self-sufficient and capable of supporting themselves, and that no provision of spousal maintenance is necessary or desired.
20.Both parties fully and freely waive any and all rights or claims they may now or in the future have to spousal maintenance under the Family Law Act 1975 and under any or all statutes now or later enacted in this or any other state or country having jurisdiction over the parties.
21.The parties agree and covenant that in the event of the breakdown of marriage and a claim being made for settlement of property, variation of property interests or spousal maintenance by either or both of them, the terms of this Agreement will determine the issues between them.
The relevant findings of her Honour are as follows:
10Ms Boyle argues that clause 19 of the Agreement does include a precise reference to an amount, in that the phrase “no provision of spousal maintenance is necessary or desired” implicitly identifies the quantum, which is none at all. To further require the parties to add in the words “nil” or “zero spousal maintenance” or “nil spousal maintenance” is unnecessary.
I agree with Ms Boyle. The phrase “no provision of spousal maintenance is necessary or desired” must be read at face value. It includes a clear intention that no amount of spousal maintenance is to be paid. This does not require that the parties’ intention be further defined as “zero spousal maintenance”, “nil spousal maintenance” or any other similar phrase. The wording in Clause 19 of this Agreement can be contrasted with the clause considered by Justice Cronin, which simply provided that the wife agreed that she ‘will make no claim for maintenance for herself…”, with no reference to any amount or quantum.
11My conclusion is strengthened when one considers clause 20 of the Agreement. In this clause, the parties have attempted to achieve an outcome where they “fully and freely waive all rights and claims to future spousal maintenance”. This is a much more generic phrase which is similar to the wording rejected by Justice Cronin in Guild & Stasiuk.
12I conclude that clause 20 does fall foul of s.90E, as it does not identify what quantum, or potential quantum, of future spousal maintenance the parties are each foregoing. This contrasts with clause 19, which makes it clear that there is to be no provision of spousal maintenance – and no provision must mean nil, zero, none. I conclude that clause 19 in relation to spousal maintenance does meet the requirements of s.90E and is not void for that reason.
There are few cases where the interpretation of s 90E has been considered. Indeed, there are only two that were cited to this Court.
The husband relies on the decision of Cronin J in Guild & Stasiuk [2019] FamCA 167, and the wife relies on the decision of Judge Howard in Cumpton & Rainford [2020] FCCA 3441.
There is a third though, and that is the decision of Charlesworth J in Cooper v Fernihough & Anor [2019] FCA 727, which was referred to by Judge Howard.
In Guild & Stasiuk, the clause of the BFA that his Honour was considering, was clause 10 and relevantly it provided as follows:
(The wife) agrees that in the event of the event occurring (and relevantly, the event is the permanent separation), that she will make no claim for maintenance for herself and will accept the provisions of this Agreement in full and final settlement of any claim for maintenance that she might otherwise have had.
His Honour found that there was no amount provided in that clause, and thus applying s 90E, it was void.
In deciding that, his Honour made the following comments:
29.In my view, the words “the amount provided for” maintenance must refer to an identifiable quantum. To argue otherwise opens up debate about the extent of that possible quantum.
30.As s 90E makes any provision void if it does not meet the requirements of the Act, any uncertainty or vagueness cannot assist the party who seeks the protection of the provisions of the Act.
…
32.…The language of s 90E makes clear that the purpose is to ensure that people cannot avoid their maintenance obligations each to the other without precise reference to an amount.
The husband submits that the wording of clause 10 was “similar to the wording used in clause 19” here. However, I do not agree; it is more akin to clause 20, which her Honour here found to offend s 90E. There is a clear difference between a clause that provides for no claim to be made, and a clause that in effect specifies that there is no provision for spousal maintenance.
However, his Honour’s comments referred to above tend to support the interpretation that her Honour here settled upon. For example, there is “an identifiable quantum”, namely “no provision”, and there is “precise reference to an amount”, namely, again, “no provision”.
The husband, relying on the Oxford Languages Dictionary, submits that an “amount” means “a quantity of something, especially the total number, size, value or extent”, but in my view “no provision” satisfies that definition.
As the primary Judge implied in [10], and observed in [12], it means the same as the words “zero”, “nil”, or “none”, but it is unnecessary to use those words. An amount can be “zero”, “nil” or “none”, or as here, “no provision”, and still be “an amount”.
It is further submitted that the presence of the words “necessary or desired” support the argument that no amount is specified. That is because, it is said, those words “express a wish but do not prevent that wish changing in the future”. However, I am not persuaded by that argument. To my mind, the words “necessary or desired” neither “express a wish” nor imply that circumstances may change. They simply support the basis for there being no provision for spousal maintenance.
As for the case of Cumpton & Rainford, that does not provide the answer to the issue in this case. The issue before that court was whether clause 5.4 of the Agreement offended s 90E. That clause read as follows:
We both wish to enter this Agreement to settle all claims now and in the future for any maintenance, property, financial resources and other financial matters including any claims that may be made under Part VII or any other relevant provision of the Family Law Act.
Plainly, that did offend s 90E and was void; it did not specify the amount provided for spousal maintenance.
However, there was another clause, namely clause 4.1 in the same Agreement which specified, inter alia, that the Agreement made “no provision for the payment of Spousal Maintenance to either Partner”. That clause though was not the subject of any finding made by his Honour, yet the wife sought to argue that because that clause was not in issue, “[i]t can be inferred therefore, that the Court considered that, had paragraph 5.4 been drafted in the same terms as paragraph 4.1, it would have met the requirements of the Act” (paragraph 24 of the written summary of argument of the wife filed on 10 September 2021).
It is not open though for that argument to be made. The fact is that clause 4.1 was not addressed by his Honour, and no finding was made in relation to it vis-a-vis s 90E.
With Cooper v Fernihough, that does not assist either, except to confirm those clauses which are clearly caught by s 90E. There, clause 11.2 of the Agreement was the subject clause, and relevantly it provided that the parties to the Agreement:
…abandoned and relinquished any claims they may have against each other in respect of:
(2) in the case of Mrs Fernihough;
…
(b)“all and any right that she may have to claim spousal maintenance against [Mr Fernihough] either now or in the future” (clause 11.2).
Her Honour correctly found that that clause did not “fulfil the requirements of s 90E” and was void.
Curiously, the husband also sought to rely on the Family Law Amendment (Financial Agreement and Other Measures) Bill 2015, and the Explanatory Memorandum to that Bill. The Bill proposed an amendment to s 90E, which the husband suggested supported his argument that her Honour erred. However, although that Bill was introduced into Parliament, the Bill lapsed when Parliament was prorogued, and has never been reintroduced.
In those circumstances, it is not open to the husband to seek to support his argument by reference to a Bill that never saw the light of day.
In these circumstances, no error was made by her Honour in her interpretation of s 90E, and in its application to clause 19.
Thus, none of the grounds of cross-appeal have any merit, and the cross-appeal must be dismissed.
COSTS
If the appeal was dismissed the husband sought an order for costs, and if the cross-appeal was dismissed the wife sought an order for costs.
Although in normal circumstances each party could be entitled to a costs order, given the outcome of the appeal and the cross-appeal, there should be no order as to costs.
I certify that the preceding fifty-three (53) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Strickland. Associate:
Dated: 22 October 2021
2
6
0