Federal Commissioner of Taxation v Tomaras - [2018] HCA 62

HIGH COURT OF AUSTRALIA
KIEFEL CJ,
GAGELER, KEANE, GORDON AND EDELMAN JJ
COMMISSIONER OF TAXATION FOR THE
COMMONWEALTH OF AUSTRALIA APPELLANT
AND
TOMARAS & ORS RESPONDENTS
Commissioner of Taxation v Tomaras
[2018] HCA 62
13 December 2018
B9/2018
ORDER
1. The question of law stated by the trial judge for the opinion of the Full Court of the Family Court of Australia should be answered as follows:
Question
"Does s 90AE(1)-(2) of the Family Law Act 1975 (Cth) grant the court power to make Order 8 of the final orders sought in the amended initiating application of the [w]ife?",
where proposed Order 8 was amended to read:
"Pursuant to section 90AE(1)(b) of the Family Law Act 1975 (Cth), in respect of the [wife's] indebtedness to the Commissioner of Taxation for the Commonwealth of Australia [for] taxation related liabilities in the amount of $256,078.32 as at 9 August 2016 plus General Interest Charge (GIC), the [husband] be substituted for the [wife] as the debtor and the [husband] be solely liable to the Commissioner of Taxation for the said debt."

Answer
Although in relation to a debt owed to the Commonwealth by a party to a marriage s 90AE(1) confers power to make an order that the Commissioner be directed to substitute the husband for the wife in relation to that debt, it is otherwise inappropriate to answer the question without it being found, or agreed, that, within the meaning of s 90AE(3), the making of the order is reasonably necessary, or reasonably appropriate and adapted, to effect a division of property between the parties to the marriage, and it is not foreseeable at the time that the order is made that to make the order would result in the debt not being paid in full; and without the court being satisfied that, in all the circumstances, it is just and equitable to make the order.
2.Appeal otherwise dismissed.

On appeal from the Family Court of Australia
Representation
S B Lloyd SC with L T Livingston for the appellant (instructed by Australian Government Solicitor)
M L Robertson QC with S J Carius for the first respondent (instructed by Hartnett Lawyers)
No appearance for the second respondent
Submitting appearance for the third respondent
Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports.

CATCHWORDS
Commissioner of Taxation v Tomaras
Family law – Matrimonial cause – Proceedings to alter property interests – Where wife was indebted to Commissioner for certain taxation related liabilities plus general interest charge – Where wife applied for order that husband be substituted for wife as debtor and husband be solely liable to Commissioner for debt – Where s 90AE(1)(b) of Family Law Act 1975 (Cth) permitted court to make order directed to creditor of one party to marriage to substitute other party to marriage in relation to debt owed to creditor – Whether s 90AE bound Commissioner in relation to debt owed to Commonwealth – Whether s 90AE(1)‑(2) of Family Law Act granted court power to make order sought by wife.
Practice and procedure – Question stated – Where question of law stated by Federal Circuit Court of Australia under s 94A(3) of Family Law Act for opinion of Full Court of Family Court of Australia – Where question concerned jurisdiction to make order – Where preconditions to making of order in s 90AE(3) of Family Law Act unlikely to be satisfied – Whether stated case procedure was appropriate.
Words and phrases – "bind the Crown", "case stated", "common probability of fact", "creditor", "Crown immunity", "debt of a party to a marriage", "party to a marriage", "person", "presumption", "property of the parties to a marriage", "property settlement proceedings", "question of law", "rights, liabilities or property interests of a third party", "tax debt", "third party".
Family Law Act 1975 (Cth), ss 79, 80, 90AA, 90AC, 90ACA, 90AD, 90AE, 94A, Pts VIII, VIIIAA.

KIEFEL CJ AND KEANE J. We agree with Gordon J that under s 90AE of the Family Law Act 1975 (Cth) ("the Act") the court has power to order the Commissioner of Taxation to substitute one party to a marriage for the other in relation to a debt owed to the Commonwealth for income tax. Accordingly, the appeal must be dismissed. Gratefully adopting her Honour's summary of the factual background, the relevant legislation, and the reasons of the Full Court of the Family Court of Australia, we proceed to explain our reasons for that conclusion.
Since the decision of this Court in Bropho v Western Australia[1] it has been settled that the presumption of statutory construction that general words in a statute do not bind the Crown may be displaced without the use of express words or words of necessary intendment. If the legislative provision in question, when construed in context, discloses an intention to apply to the circumstances of the particular case, then effect must be given to that intention. In this case the intention of the Act is not in doubt.
[1](1990) 171 CLR 1 esp at 16‑17, 22; [1990] HCA 24. See also Bass v Permanent Trustee Co Ltd (1999) 198 CLR 334 at 346‑347 [16]‑[17]; [1999] HCA 9; Australian Competition and Consumer Commission v Baxter Healthcare Pty Ltd (2007) 232 CLR 1 at 27‑28 [41]‑[42]; [2007] HCA 38.
Within Pt VIII of the Act, a court considering the exercise of its jurisdiction in property settlement proceedings under s 79 must, by reason of s 75(2)(ha), take into account the effect of any proposed order on the ability of a creditor of a party to the marriage to recover the creditor's debt. Nothing in Pt VIII of the Act suggests an intention to differentiate between Commonwealth, State and Territory revenue authorities or an intention to differentiate between revenue authorities and other creditors. Further, s 80(1)(f) provides that a court exercising its powers under s 79 may "order that payments be made ... to a public authority for the benefit of a party to the marriage". It is not disputed that this provision contemplates the making of an order that one party to a marriage pay the taxation liability of another to a revenue authority. Thus it is apparent that, in Pt VIII of the Act, the term "creditor" is apt to include the Commonwealth and indeed any other revenue authority.
Within Pt VIIIAA of the Act, s 90AA states that the object of that Part is to allow the court to make an order in relation to the property of a marriage under s 79 of the Act that is directed to, or alters the rights, liabilities or property interests of, a third party. Within Pt VIIIAA, s 90AE(1)(b) provides that in proceedings under s 79, the court may make "an order directed to a creditor of one party to a marriage to substitute the other party ... to the marriage for that party in relation to the debt owed to the creditor". Part VIIIAA is thus explicitly ancillary to s 79 of the Act.
Given that Pt VIIIAA is ancillary to Pt VIII, a suggestion that a "creditor" in Pt VIIIAA is different from a "creditor" in Pt VIII would be difficult to sustain. Nothing in the language of Pt VIIIAA affords any support to such a suggestion. Further, nothing in the extraneous materials referred to by the parties targets a mischief that might be remedied only by giving "creditor" a narrower scope in Pt VIIIAA than it has in Pt VIII.
It must be understood, however, that the power of the court under Pt VIIIAA to make an order directed to a third party is not at large. The power to make an order under s 90AE(1) is conditioned by s 90AE(3). Such an order may be made only if, among other things:
"(a)the making of the order is reasonably necessary, or reasonably appropriate and adapted, to effect a division of property between the parties to the marriage; and
(b)if the order concerns a debt of a party to the marriage – it is not foreseeable at the time that the order is made that to make the order would result in the debt not being paid in full; and
...
(d)the court is satisfied that, in all the circumstances, it is just and equitable to make the order".
Some statutes may differentiate between ordinary creditors and revenue authorities. In such cases the general consideration of equality before the law, which tends against the application of the presumption that the Crown is not bound by a statute, can be seen to have been displaced in favour of the public interest specifically associated with governmental functions such as the protection of the revenue[2]. The Act is not such a statute.
[2]The Commonwealth v Western Australia (1999) 196 CLR 392 at 410 [35], 430 [106]; [1999] HCA 5.
Any concern for the protection of the revenue – Commonwealth, State or Territory – is met by the terms of s 90AE(3)(b). If this condition is not satisfied, the power to make an order under s 90AE(1)(b) is not enlivened. The observance of this condition by the court is apt to ensure that the interests of the revenue authorities, and other creditors for that matter, are not adversely affected by the making of an order under s 90AE(1)(b). The scope of this power should not be distorted by attributing to the Parliament an unfounded apprehension that the courts cannot be trusted to ensure that the statutory conditions upon which the power may be exercised are satisfied.
Given that, so far as appears from the record in the present case, the husband is a bankrupt and the wife is solvent, it is not possible to see how the condition in s 90AE(3)(b) could be satisfied in this case. More generally, it is difficult to see how any case where there is a real prospect that the substitution of one spouse for another as the debtor of the revenue authority would create or enhance a risk of non‑payment would not fall foul of s 90AE(3)(b) of the Act.
It might also be suggested that the prospect that an order for substitution might render the substituted party liable for a revenue debt without the benefit of rights of objection available exclusively to the other party to the marriage as "the taxpayer" under the relevant revenue legislation would mean that the condition in s 90AE(3)(d) is not satisfied. This suggestion raises a question of no little complexity. The circumstance that the income tax liability of the substituted party could not be contested by that party would not necessarily make it unjust or inequitable to order substitution. It may be, for example, that any challenge to the tax liability asserted by the Commissioner would clearly be resolved in favour of the Commissioner. In such a case, an inability to contest the tax liability would not occasion substantial injustice to the substituted party. However, it will rarely be the case that a court trying proceedings between the parties to a marriage will be able responsibly to come to a firm view as to the likely outcome of such a contest.
As a practical matter, where a real question arises as to whether a party to a marriage would be substantially prejudiced by an order for substitution, the better course for the court would usually be to conclude that it cannot be satisfied that the condition in s 90AE(3)(b) could be met. In the present case, given that on the material in the record the condition in s 90AE(3)(b) could not be satisfied, it is unnecessary to reach a conclusion in relation to s 90AE(3)(d).
For those reasons, we agree with the terms of the answer proposed by Gordon J to the question posed by the stated case.
As to the procedure adopted in this case, we would observe that it is regrettable that the primary judge was invited by the parties to state a question of law for the Full Court. While the primary judge cannot fairly be criticised for acceding to the course proposed by the parties, it would have been more efficient, in terms of the administration of justice, if the wife's application for substitution had been allowed to proceed to a determination on the merits. Given the difficulty confronting the wife's application for substitution by reason of the condition in s 90AE(3)(b), the question stated for the opinion of the Full Court was unlikely ever to be of other than academic interest.
GAGELER J. The question of law stated by the Federal Circuit Court for the consideration of the Full Court of the Family Court under s 94A(3) of the Family Law Act 1975 (Cth) ("the Act"), at the urging of the Commissioner of Taxation, was whether the Federal Circuit Court has power under s 90AE(1) or (2) of the Act to order that a husband be substituted for a wife in relation to a taxation debt owed by the wife to the Commonwealth of Australia. Although the question was cast in terms of power, the argument of the Commissioner, as refined in the course of submissions in the appeal by special leave to this Court from the order embodying the affirmative answer given by the Full Court of the Family Court, was cast primarily in terms of jurisdiction.
The Commissioner argued that the Federal Circuit Court lacks power to make such an order under s 90AE(1) or (2) because the jurisdiction conferred on the Federal Circuit Court by s 39(5AA) with respect to matters arising under the Act in respect of matrimonial causes constituted by "proceedings between the parties to a marriage with respect to the property of the parties to the marriage"[3] is not extended by s 90AD(1) for the purpose of Pt VIIIAA of the Act to encompass proceedings between the parties to a marriage regarding the taxation debts owed by one or both of those parties to the Commonwealth. The Commissioner argued that the jurisdiction of the Federal Circuit Court is not so extended because a taxation debt owed to the Commonwealth is excluded from the instruction in s 90AD(1) that, for the purpose of Pt VIIIAA, "a debt owed by a party to a marriage is to be treated as property" for the purpose of a matrimonial cause as defined. The Commissioner relied for that exclusion on the common law presumption that a statute does not "bind the Crown".
[3]See s 4(1) of the Act (para (ca) of the definition of "matrimonial cause").
Because the question stated concerns the jurisdiction of the Federal Circuit Court and because the Commissioner's argument that the Federal Circuit Court lacks jurisdiction turns entirely on statutory construction, I see no reason to doubt that the discretion conferred by s 94A(3) of the Act was appropriately exercised by the Federal Circuit Court to state the question for the consideration of the Full Court of the Family Court. That the question is one of general significance for the administration of taxation laws and that it has been raised in other pending cases are additional considerations which support the appropriateness of adopting a procedure to ensure its early and authoritative resolution.
That said, I share the view of the Full Court of the Family Court in the decision under appeal that the question is not at all difficult to answer. Rejecting the Commissioner's argument that the reference in s 90AD(1) to "a debt owed by a party to a marriage" excludes a taxation debt owed to the Commonwealth, I would answer the question to the effect that, subject to s 90AE(3), the Federal Circuit Court has power under s 90AE(1)(b) or (2)(b) of the Act to order that the husband be substituted for the wife in relation to the taxation debt. The affirmative answer given to the question by the Full Court of the Family Court, although less precise, is substantially to that effect.
Stated sufficiently for present purposes, the presumption of the common law of Australia that a statute does not "bind the Crown" is a presumption that a statute enacted by an Australian legislature does not operate to impair the legal position of the body politic or executive government of the Commonwealth, a State or a self-governing Territory[4]. Underlying the presumption is the understanding that a statute applicable to a citizen has the potential to operate with different force and with different consequences if applied to a government[5]. The strength of the presumption has varied through time. Applied as here to a statute enacted after 1990[6], as applied to a statute enacted before 1947[7], the presumption is displaced simply where an affirmative intention to alter the legal position of the Commonwealth, State or self-governing Territory appears from the text, structure, subject matter or context of the statute.
[4]NT Power Generation Pty Ltd v Power and Water Authority (2004) 219 CLR 90 at 151-152 [166]-[170]; [2004] HCA 48; McNamara v Consumer Trader and Tenancy Tribunal (2005) 221 CLR 646 at 654-655 [21]-[24]; [2005] HCA 55, referring to Wynyard Investments Pty Ltd v Commissioner for Railways (NSW) (1955) 93 CLR 376 at 393-394; [1955] HCA 72.
[5]Roberts v Ahern (1904) 1 CLR 406 at 418; [1904] HCA 17, quoting United States v Hoar (1821) 26 Fed Cas 329 at 330. See also The Commonwealth v Western Australia (1999) 196 CLR 392 at 410 [35]; [1999] HCA 5.
[6]Bropho v Western Australia (1990) 171 CLR 1 at 23-24; [1990] HCA 24.
[7]Jacobsen v Rogers (1995) 182 CLR 572 at 585-586; [1995] HCA 6, referring to Province of Bombay v Municipal Corporation of Bombay [1947] AC 58. See also Roberts v Ahern (1904) 1 CLR 406 at 418.
Here, in my opinion, the presumption is displaced by the appearance of an affirmative legislative intention to confer jurisdiction on a court to alter, by an order under s 90AE(1) or (2), the interest of the Commonwealth or a State or a self‑governing Territory in a debt owed to it by a party to a marriage. That affirmative intention appears sufficiently from the text and structure of Pt VIIIAA when read in context with s 79 in Pt VIII of the Act.
The object of Pt VIIIAA, as expressed in s 90AA, is to allow a court in proceedings under s 79 to make an order "that is directed to, or alters the rights, liabilities or property interests of a third party". The same terminology is repeated in s 90AE(2)(b) in empowering a court to make an order that "alters the rights, liabilities or property interests of a third party in relation to the marriage". The term "creditor" in s 90AE(1)(a), (b) and (c) plainly refers to a "third party" whose property interest is in a debt owed by one or both of the parties to the marriage.
Section 90AB defines "third party", in relation to a marriage, for the purposes of Pt VIIIAA, to mean "a person who is not a party to the marriage". By operation of s 2C of the Acts Interpretation Act1901 (Cth), which by force of s 2A of that Act "binds the Crown in each of its capacities", the reference to a "person" within that definition must be taken to "include a body politic or corporate as well as an individual" absent something in the Act to indicate a contrary intention. Unlike the Trade Practices Act 1974 (Cth), in relation to which an intention to exclude a body politic from general references to a "person" was found in specific provisions of that Act which addressed the extent to which that Act was to "bind" the Crown "in right of the Commonwealth" and the Crown "in right of a State"[8], the Act contains nothing to evince an intention contrary to the operation of s 2C of the Acts Interpretation Act.
[8]See Bass v Permanent Trustee Co Ltd (1999) 198 CLR 334 at 347-349 [20]-[24]; [1999] HCA 9.
When combined with the statement in s 90AC(1)(a) of the Act that Pt VIIIAA "has effect despite anything to the contrary in ... any other law (whether written or unwritten) of the Commonwealth, a State or Territory", s 90AA as interpreted in accordance with s 2C of the Acts Interpretation Act rather indicates a legislative intention that the powers conferred on a court by the Part are to be available in any proceeding under s 79 of the Act to provide for the alteration of the rights, liabilities or property interests of a body politic to which a party to a marriage is indebted, in the same way as the Part provides for the alteration of the rights, liabilities or property interests of a body corporate to which, or an individual to whom, a party to a marriage is indebted.

The comprehensiveness and uniformity of the intended operation of Pt VIIIAA in relation to debts owed by one or both of the parties to the marriage to all third parties are confirmed by the narrowness and specificity of the sole exclusion in s 90ACA. The exclusion is of the powers of a court under the Part in relation to "superannuation annuities (within the meaning of the Income Tax Assessment Act 1997)", a subject matter which falls within the separate scheme in Pt VIIIB of the Act.
The Commissioner's argument that Pt VIIIAA cannot have been intended to cover taxation debts to the Commonwealth because the Income Tax Assessment Act 1936 (Cth) ("the ITAA") and the Taxation Administration Act 1953 (Cth) ("the TAA") comprise a complete and exhaustive scheme governing the taxation obligations of a party to a marriage is belied by the express subordination in s 90AC(1)(a) of all other Commonwealth laws to the operation of the Part. Given that s 90AC(1)(a) creates no exception for the operation of the ITAA or the TAA, neither of those statutes operates to prevent the making of an order under s 90AE(1) or (2) in proceedings under s 79 where the preconditions in s 90AE(3) can be met.
The Commissioner points to the potential for an order under s 90AE(1) or (2) to operate to impede the availability and operation of the Commissioner's power to amend assessments under s 170 of the ITAA, to impede the availability and operation of a taxpayer's objection, review and appeal rights under Pt IVC of the TAA, to impede the exercise by the Commissioner of recovery powers conferred by Sch 1 to the TAA, and to impact adversely on the accrual of the general interest charge under Pt IIA of the TAA. The mere potential for those impediments and that adverse impact to exist does not mean that the application of s 90AE(1) or (2) of the Act to a taxation debt owed by a party to a marriage to the Commonwealth is so problematic that an intention to confer jurisdiction to permit such an order cannot reasonably be imputed to the Parliament.
All of the potentialities to which the Commissioner points are considerations available and appropriate to be taken into account by a court, called upon to make an order under s 90AE(1) or (2), in determining under s 90AE(3)(d) whether "the court is satisfied that, in all the circumstances, it is just and equitable to make the order". The extent to which one or more of those potentialities would, if realised, impact on the determination to be made under s 90AE(3)(d) might be expected to vary from case to case. Factors relevant to the determination to be made under s 90AE(3)(d) in a given case include a range of statutory discretions which the Commissioner might have exercised or might be prepared to exercise, a variety of arrangements which the Commissioner might have entered into or might be prepared to enter into in the exercise of the general powers of administration conferred by s 8 of the ITAA and by s 3A of the TAA, and the power of a court under s 79(5) of the Act to grant an adjournment of proceedings to allow processes under the ITAA and TAA to run their course.
Whether s 90AE(3) would permit the exercise of power under s 90AE(1)(b) or (2)(b) in the circumstances of this case is not within the scope of the question that has been stated. It is a topic on which I therefore express no opinion.
For these reasons, I would dismiss the appeal.
GORDON J. Part VIII of the Family Law Act 1975 (Cth) provides for spousal maintenance and the division of the property of the parties to a marriage. In proceedings with respect to the property of the parties to a marriage[9], s 79 in Pt VIII provides that a court may make such order as it considers appropriate altering the interests of the parties to the marriage in the property[10], but that the court shall not make such an order unless it is satisfied that in all the circumstances it is just and equitable to make the order[11]. In considering what order (if any) should be made, the court must take into account prescribed matters[12]. One matter the court must consider is the effect of any proposed order on the ability of a creditor of a party to the marriage to recover the creditor's debt, so far as that effect is relevant[13].
[9]Included in the definition of "property settlement proceedings" in s 4(1) of the Family Law Act.
[10]s 79(1)(a) of the Family Law Act.
[11]s 79(2) of the Family Law Act.
[12]s 79(4) of the Family Law Act.
[13]ss 79(4)(e) and 75(2)(ha) of the Family Law Act.
Part VIIIAA of the Family Law Act was introduced in 2003[14] to, relevantly, allow a court to make an order under s 79 that "is directed to, or alters the rights, liabilities or property interests of a third party"[15]. One of the orders the court may make binding a third party under Pt VIIIAA is an order directed to a creditor of one party to the marriage to substitute the other party to the marriage in relation to the debt owed to that creditor[16].
[14]Part VIIIAA had a deferred commencement: see s 2(1) of the Family Law Amendment Act 2003 (Cth).
[15]s 90AA of the Family Law Act.
[16]s 90AE(1)(b) of the Family Law Act.
This appeal from a judgment of the Full Court of the Family Court of Australia, on a question of law stated by a judge of the Federal Circuit Court of Australia under s 94A(3) of the Family Law Act, is concerned with the interaction between Pts VIII and VIIIAA and, in particular, whether a court in proceedings under s 79 in Pt VIII has power under s 90AE(1) in Pt VIIIAA to make an order directed to the appellant, the Commissioner, to substitute the husband for the wife in relation to a debt owed to the Commonwealth which arises under a taxation law[17]. The Commissioner contended that he was not bound by s 90AE. The wife contended that the Commissioner was bound, and that the court had power to order the Commissioner to substitute the husband for the wife in relation to a debt owed to the Commonwealth arising under a taxation law.
[17]A "taxation law" means an Act of which the Commissioner has the general administration: s 995-1(1) of the Income Tax Assessment Act 1997 (Cth) ("the 1997 Act"). The Commissioner has the general administration of the Income Tax Assessment Act 1936 (Cth) (s 8), the 1997 Act (s 1-7) and the Taxation Administration Act 1953 (Cth) (s 3A).
These reasons will show that, under Pt VIIIAA, the court has jurisdiction over debts owed to the Commonwealth; and the court has the power under s 90AE in that Part to order the Commissioner to substitute the husband for the wife in relation to a debt owed to the Commonwealth arising under a taxation law. But these reasons will also show that there will seldom, if ever, be occasion to exercise that power.
Case stated
The question of law stated by the trial judge for the opinion of the Full Court was as follows:
"Does s 90AE(1)-(2) of the [Family Law Act] grant the court power to make Order 8 of the final orders sought in the amended initiating application of the [w]ife?"
Order 8 was in the following terms:
"Pursuant to section 90AE(1)(b) of the [Family Law Act], in respect of the [wife's] indebtedness to the [Commissioner] [for] taxation related liabilities in the amount of $256,078.32 as at 9 August 2016 plus General Interest Charge (GIC), the [husband] be substituted for the [wife] as the debtor and the [husband] be solely liable to the [Commissioner] for the said debt."
The Full Court answered that question:
Yes, but with the proviso that s 90AE(1) confers power only to make an order that the Commissioner be directed to substitute the husband for the wife in relation to the debt owed by the wife to the Commissioner.
As is apparent, the Full Court rejected the Commissioner's contention that, upon the proper construction of s 90AE in Pt VIIIAA, the court did not have power to make an order under s 90AE directed to the Commissioner.
But the question of law stated for the opinion of the Full Court, and therefore the answer provided by the Full Court, said nothing about the fact that, upon the proper construction of Pt VIIIAA, read with Pt VIII of the Family Law Act, a court would rarely, if ever, make such an order directed to the Commissioner in relation to a debt owed to the Commonwealth which arises under a taxation law. In other words, the confined nature of the power conferred was relevant, and was not fully explored.
In the circumstances of this matter, the stated case procedure was inappropriate, and the answer given incomplete.
Background
The wife and husband, the first and second respondents, married in July 1992. They separated in July 2009. During the marriage, the Commissioner issued various assessments requiring the wife to pay, among other things, income tax, the Medicare levy, penalties and the general interest charge ("GIC"). The wife failed to pay the amounts assessed, and did not lodge objections under Pt IVC of the Taxation Administration Act 1953 (Cth) ("the TAA"). On 12 November 2009, the Commissioner obtained default judgment against the wife for $127,669.36. GIC continues to accrue on that judgment debt.
The husband was declared bankrupt on 5 November 2013. On 20 December 2013, the wife commenced proceedings in the Federal Circuit Court against the husband seeking, relevantly, orders under s 79 for alteration of their property interests. The wife's application, as originally filed, sought, among other things, the following orders:
"8.That the [husband] be responsible for all income tax assessed on income received or deemed to have been received by the [wife] for the income tax year ending 30 June 2009 to the date of payment under Order 2.
9.The [husband] shall do all acts and things and sign all documents as are necessary to release the [wife] from and indemnify the [wife] against any liability present or contingent including tax and bank liabilities, in respect of the [husband] or a related party of the [husband]."
In February 2016, the trial judge granted the Commissioner leave to intervene in the proceedings in relation to those orders. As at 9 August 2016, the wife's liabilities to the Commissioner stood at $256,078.32, comprised of the judgment debt of $127,669.36, income tax credits and credit interest on overpayments in the amount of $516.77, and further GIC in the amount of $128,925.73. That month, the trial judge granted the wife leave to amend Order 8 in the terms set out above[18] and stated the question of law for the opinion of the Full Court.
[18]See [34] above.
Full Court
As noted earlier, the Full Court (Thackray and Strickland JJ, Aldridge J agreeing generally, but writing separately) answered the question in the affirmative but with the proviso that s 90AE(1) confers power to make only an order that the Commissioner be directed to substitute the husband for the wife in relation to the debt owed by the wife to the Commissioner. Thackray and Strickland JJ held that the additional words sought by the wife – that the husband be solely liable to the Commissioner for the debt – could create the impression that whatever rights the wife had to challenge the debt were extinguished by the order. Given that their Honours were not persuaded such rights would be extinguished, they declined to make the additional order.
In formulating that answer, all members of the Court considered the question of Crown immunity from statute at some length.
Two members of the Court, Thackray and Strickland JJ, held that the presumption that the Crown is not bound by statute applies only to provisions which impose an obligation or restraint on the Crown[19]; and that there was no place for the presumption if the provision, properly construed, conferred a benefit on the Crown[20].
[19]Tomaras v Tomaras (2017) 327 FLR 228 at 232 [16], citing British Broadcasting Corporation v Johns [1965] Ch 32 and Bropho v Western Australia (1990) 171 CLR 1 at 16; [1990] HCA 24.
[20]Tomaras (2017) 327 FLR 228 at 232 [16], citing Madras Electric Supply Corporation Ltd v Boarland [1955] AC 667 and McGraw‑Hinds (Aust) Pty Ltd v Smith (1979) 144 CLR 633 at 656; [1979] HCA 19.
Thackray and Strickland JJ were of the view that it was reasonably arguable that s 90AE could only impose a benefit on the Crown on the basis, among other things, that the Commissioner would have a greater chance of recovering a tax liability given that s 90AE allowed substitution of one party or for both parties to be jointly responsible for the debt, and that, in accordance with s 90AE(3)(b), the order could not be made where it was foreseeable the debt would not be paid. In light of those matters, their Honours saw no place for the presumption.
In case they were wrong on the question of benefit, Thackray and Strickland JJ also considered, and rejected, arguments advanced by the Commissioner that the presumption applied and that s 90AE did not rebut that presumption. Two key arguments were advanced by the Commissioner. First, other provisions in the Family Law Act provided means through which one spouse could be made responsible for the taxation liability incurred by the other spouse. Second, the construction advanced by the wife would create absurdities in the application of the taxation law because s 90AE could not operate to transfer the objection, review and appeal rights associated with the tax debt.
In relation to the first argument, Thackray and Strickland JJ accepted that other provisions in the Family Law Act provided the means through which one spouse could be directed to meet the taxation liability incurred by the other spouse, but held that such an order provided the original taxpayer with no defence against a claim by the Commissioner; and, further, that the same argument could be made about any other kind of debt.
In relation to the second argument – the impact of s 90AE on the application of the taxation law – despite not wishing to express a firm view, Thackray and Strickland JJ were not persuaded that the rights of objection, review and appeal would not pass to the substituted spouse in the event that a s 90AE order were made; and that, if they were wrong in relation to the transferability of objection rights, their Honours were of the view that the Crown would derive a benefit rather than suffer a detriment.
Their Honours further noted that the Commissioner had always been treated as a "creditor" for the purposes of ss 79 and 79A. Given the express link between s 79 and s 90AE, it would be "surprising"[21], their Honours said, if different meanings were given to the words "creditor" and "debt" appearing in those linked sections. Their Honours further held that the failure of Parliament to include an express carve out, together with the purported benefits that flow to the Commissioner from the making of orders under s 90AE, suggested a legislative intention that the Commissioner be bound by s 90AE.
[21]Tomaras (2017) 327 FLR 228 at 237 [54].
Aldridge J agreed with Thackray and Strickland JJ, subject to certain provisos. First, the principle in relation to Crown immunity now to be applied was that articulated in Bropho v Western Australia[22]. Aldridge J held that whilst the issue of benefit to, or burden upon, the Crown might be a relevant consideration in determining whether the Crown was bound by a statute, it could not be considered as a starting point or threshold issue. As his Honour observed, a historically rigid conception of Crown immunity, whereby an Act of Parliament would not bind the Crown unless by express provision or necessary implication, was discarded in Bropho[23]; and that was a rejection, at least in part, of the earlier decisions which had endorsed the benefit or burden dichotomy[24].
[22](1990) 171 CLR 1 at 23-24, quoted in Tomaras (2017) 327 FLR 228 at 239‑240 [70].
[23](1990) 171 CLR 1 at 16-17, 22.
[24]Tomaras (2017) 327 FLR 228 at 239-240 [66]-[70]. See, eg, Madras Electric [1955] AC 667 at 685; BBC v Johns [1965] Ch 32 at 78-79; McGraw-Hinds (1979) 144 CLR 633 at 656. See also Jacobsen v Rogers (1995) 182 CLR 572 at 585; [1995] HCA 6.
Second, contrary to the views of Thackray and Strickland JJ, his Honour concluded that, given that an order under s 90AE operates to interfere with the legal rights and entitlements of the third party, it is not legislation beneficial to the Crown. Aldridge J was also doubtful that one spouse could be substituted for the other in relation to rights of objection and appeal in respect of tax liabilities. However, his Honour was of the view that the issue was not of critical significance because, among other things, it was unlikely that any orders would be made under s 90AE if there were genuine issues of substance that would justify an objection or appeal.
Crown immunity
The relevant provisions of the Family Law Act do not expressly state that they bind the Crown. The presumption that general words of statutory provisions will not bind the Crown operates as no more than a general principle of statutory construction[25]; or an aid to statutory construction[26]. In certain circumstances[27], the presumption may represent little more than the starting point of the ascertainment of the relevant legislative intent[28]. The ultimate question must be whether the presumption has, in all the circumstances, been rebutted and, if it has, the extent to which it was the legislative intent that the relevant statutory provisions should bind the Crown[29]. The "circumstances include the terms of the statute, its subject matter, the nature of the mischief to be redressed, the general purpose and effect of the statute, and the nature of the activities of the Executive Government which would be affected if the Crown is bound"[30]. That list is by no means exhaustive.
[25]Australian Competition and Consumer Commission v BaxterHealthcare Pty Ltd (2007) 232 CLR 1 at 27 [40]; [2007] HCA 38, citing Bropho (1990) 171 CLR 1 at 15.
[26]Bropho (1990) 171 CLR 1 at 16.
[27]Such as those described in Bropho (1990) 171 CLR 1 at 23.
[28]Bropho (1990) 171 CLR 1 at 15-16, 23.
[29]Baxter (2007) 232 CLR 1 at 27 [41], quoting Bropho (1990) 171 CLR 1 at 23-24.
[30]Bropho (1990) 171 CLR 1 at 28. See also Baxter (2007) 232 CLR 1 at 28 [42].
As identified by Gleeson CJ and Gaudron J in The Commonwealth v Western Australia (Mining Act Case), a rationale for the presumption of Crown immunity is that, in general, acts of the legislature are meant to regulate and direct the acts and rights of citizens and, in most cases, the reasoning applicable to them applies with very different, and often contrary, force to the government itself[31]. Thus, in applying the presumption in ascertaining legislative intent, the operation of the legislation – its impact or effect on the Crown – is relevant[32]. The task is to construe the statute in context, adopting a flexible approach to construction which takes into account the nature of the statutory provisions in question and the activities of government to which they might apply[33].
[31](1999) 196 CLR 392 at 410 [35]; [1999] HCA 5, quoting United States v Hoar (1821) 26 Fed Cas 329 at 330. See also Mining Act Case (1999) 196 CLR 392 at 410-411 [35]-[36].
[32]See Bropho (1990) 171 CLR 1 at 23.
[33]Baxter (2007) 232 CLR 1 at 27 [41], citing Bropho (1990) 171 CLR 1. See generally State Authorities Superannuation Board v Commissioner of State Taxation (WA) (1996) 189 CLR 253 at 270; [1996] HCA 32.
The impact of a legislative provision on the Crown is not a new consideration. It has also arisen in the context of subjects of the Crown seeking to claim the benefit of the immunity. Kitto J in Wynyard Investments Pty Ltd v Commissioner for Railways (NSW)[34] referred to the need to consider the impact on the Crown when identifying classes of cases where a statutory provision not binding on the Crown should be denied an incidence on a subject of the Crown because that incidence would be a legal effect upon the Crown. Relatedly, in Registrar of the Accident Compensation Tribunal v Federal Commissioner of Taxation[35], Mason CJ, Deane, Toohey and Gaudron JJ stated that it was clear from Bropho that the presumption that general words do not bind the Crown must yield to the circumstances involved, including the content and purpose of the provision; the way the provision would operate; and whether the provision would bind servants or agents of the government in relation to acts they do or property which they own or occupy in that capacity. Their Honours went on to state that there was now no basis for applying the presumption that the Crown was not bound by statute unless the provision in issue would operate to have some effect upon the government[36].
[34](1955) 93 CLR 376 at 393-394; [1955] HCA 72.
[35](1993) 178 CLR 145 at 171-172; [1993] HCA 1.
[36]Registrar of the Accident Compensation Tribunal (1993) 178 CLR 145 at 171-172.

Whether the relevant provisions of the Family Law Act apply to, and bind, the Crown as creditor cannot be determined without first identifying how those provisions operate[37]. And, here, the operation of the relevant provisions must be understood in the context of the whole of the Family Law Act, but with particular reference to Pt VIII and then Pt VIIIAA.
Statutory framework
[37]See Bropho (1990) 171 CLR 1 at 23.
Part VIII
Part VIII of the Family Law Act provides for spousal maintenance and the division of the property of parties to a marriage. Proceedings with respect to the maintenance of a party to a marriage are referred to as "spousal maintenance proceedings"[38]. Proceedings with respect to the property of the parties to a marriage, or either of them, are defined as "property settlement proceedings"[39]. The right of a spouse to maintenance is separate from, but inextricably linked to, the division of property. In relation to the parties to a marriage, or either of them, "property" is defined, relevantly, to mean property to which one or both of the parties are entitled "whether in possession or reversion"[40].
[38]ss 4(1) and 74 of the Family Law Act.
[39]s 4(1) of the Family Law Act.
[40]s 4(1) of the Family Law Act.
In property settlement proceedings, s 79 in Pt VIII provides that a court may make such order as it considers appropriate altering the interests of the parties to the marriage in the property[41]. However, the court must not make an order under s 79 unless it is satisfied that in all the circumstances it is just and equitable to make the order[42] and, in considering what order (if any) should be made in property settlement proceedings, the court must take into account certain matters[43]. Those matters include the financial and non‑financial contributions, both direct and indirect, by the parties to the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage[44]; the effect of any proposed order on the earning capacity of either party to the marriage[45]; any other order made under the Family Law Act affecting a party to the marriage[46]; and the matters referred to in s 75(2), so far as they are relevant[47].
[41]s 79(1)(a) of the Family Law Act.
[42]s 79(2) of the Family Law Act.
[43]s 79(4) of the Family Law Act.
[44]s 79(4)(a)-(b) of the Family Law Act.
[45]s 79(4)(d) of the Family Law Act.
[46]s 79(4)(f) of the Family Law Act.
[47]s 79(4)(e) of the Family Law Act.
The matters listed in s 75(2) are the matters to be taken into consideration by the court in exercising its jurisdiction in relation to spousal maintenance. The list includes the income, property and financial resources of each of the parties[48] and the effect of any proposed order on the ability of a creditor of a party to the marriage to recover the creditor's debt[49]. That list recognises that when determining what orders the court might make under s 79, the financial resources of the parties to a marriage must be considered; and that also relevant are liabilities owed to the creditors of the parties to the marriage and the effect of any order on the ability of those creditors to recover their debt.
[48]s 75(2)(b) of the Family Law Act.
[49]s 75(2)(ha) of the Family Law Act.
The duty of the court, so far as is practicable, is to make orders that will finally determine the financial relationships between the parties to the marriage and avoid further proceedings between them[50]. In exercising its powers under Pt VIII, the court may make a variety of orders[51] including: that a specified transfer or settlement of property be made by way of maintenance for a party to a marriage[52]; that payments be made direct to a party to a marriage, to a trustee to be appointed or into court or to a public authority for the benefit of a party to the marriage[53]; and any other order which the court thinks it is necessary to make to do justice[54].
[50]s 81 of the Family Law Act.
[51]s 80 of the Family Law Act.
[52]s 80(1)(ba) of the Family Law Act.
[53]s 80(1)(f) of the Family Law Act.
[54]s 80(1)(k) of the Family Law Act.
The Commissioner did not dispute that, for the purposes of s 80(1)(f) of the Family Law Act, the Commonwealth was a "public authority" or that a court may direct a party to a marriage to pay a debt owed to the Commonwealth by the other party.
Consistent with the dual objectives of finality and justice in Pt VIII of the Family Law Act, the court has power to adjourn property settlement proceedings if the court is of the opinion that, among other things, there is likely to be a significant change in the financial circumstances of the parties to the marriage and, having regard to the time when that change is likely to take place, it is reasonable to adjourn the proceedings[55].
[55]s 79(5)(a) of the Family Law Act.
Further, where an application is made for an order under s 79 by a party to the marriage then certain persons, whose interests would be affected by the making of the order, are "entitled to become a party" to the proceedings[56]. Relevantly, a creditor of a party to the proceedings may do so if the creditor may not be able to recover their debt if the order were made[57]. As Thackray and Strickland JJ noted, the Commissioner has always been treated as a "creditor" for the purposes of ss 79 and 79A.
[56]s 79(10) of the Family Law Act.
[57]s 79(10)(a) of the Family Law Act.
Part VIII recognises, however, that although the orders being made under s 79 are intended to be final, circumstances change. Therefore, s 79A provides that a person affected by an order made under s 79 may apply for that order to be varied or set aside and, if appropriate, another order substituted in its place. But for another order to be substituted, the court must be satisfied that at least one of the circumstances prescribed in s 79A(1) exists. Those circumstances include that[58]: there has been a miscarriage of justice; it is impracticable, in the circumstances that have arisen since the order was made, for the order, or for a part of the order, to be carried out; or a person has defaulted in carrying out an obligation imposed on that person by the order and, as a result of that default, it is just and equitable to vary the order or to set the order aside and make another order in substitution for that order. A creditor of a party to the proceedings in which the order under s 79 was made is deemed to be a person whose interests are affected by the order if the creditor may not be able to recover their debt because the order has been made[59]. Put in different terms, it is difficult to identify a circumstance where any order would be made under s 79 if it diminished the ability of any creditor to recover a debt owed to them by one or both parties to the marriage.
[58]s 79A(1)(a)-(c) of the Family Law Act.
[59]s 79A(4) of the Family Law Act.
It is against that background that Pt VIIIAA must be construed.
Part VIIIAA
Part VIIIAA was introduced into the Family Law Act by the Family Law Amendment Act 2003 (Cth). Its stated object is, relevantly, to allow a court, in relation to the property of a party to a marriage, to make an order in property settlement proceedings under s 79 in Pt VIII that "is directed to, or alters the rights, liabilities or property interests of a third party"[60]. A "third party", in relation to a marriage, means a person who is not a party to the marriage[61]. The Commissioner accepted that the Commonwealth was a third party for the purposes of Pt VIIIAA.
[60]s 90AA of the Family Law Act.
[61]s 90AB of the Family Law Act.
Section 90ADA provides that Pt VIIIAA "does not affect the operation of any other provision" of the Family Law Act. Indeed, the example given in the statute is that certain provisions of s 90AE "do not limit the operation of any other provisions of [the Family Law Act] that require or permit the court to take matters into account in making an order in proceedings under section 79". In other words, Pt VIIIAA is to be construed as sitting alongside, and ancillary to, Pt VIII. That view of Pt VIIIAA is reinforced by further provisions.
First, for the purposes of Pt VIIIAA only, s 90AD(1) provides that a debt owed by a party to a marriage is "to be treated as property for the purposes of paragraph (ca) of the definition of matrimonial cause" in s 4(1) of the Family Law Act[62]. This provision was necessary to give the court in s 79 proceedings the authority to deal with a debt owed by a party to a marriage[63]. Having expanded the jurisdiction of the court over those debts, PtVIIIAA also confers specific powers on the court in relation to that jurisdiction. With the expansion of jurisdiction in Pt VIIIAA, in property settlement proceedings under s 79 in Pt VIII the orders that the court is empowered to make include orders specifically directed to, or against, third parties. Part VIIIAA confers powers to make orders directed to, or altering the rights, liabilities or property interests of, a third party.
[62]The jurisdiction of the court in relation to "matrimonial causes" is addressed in Pt V of the Family Law Act.
[63]See generally Lacey v Attorney-General (Qld) (2011) 242 CLR 573 at 593 [48]; [2011] HCA 10 and the authorities cited therein.
Second, the orders that a court may make under s 79 and s 90AE which bind a third party are confined by the terms of s 90AE. Sub-sections (1) and (2) of s 90AE identify the third party orders that the court may make as:
"(1) ...
(a)an order directed to a creditor of the parties to the marriage to substitute one party for both parties in relation to the debt owed to the creditor;
(b)an order directed to a creditor of one party to a marriage to substitute the other party, or both parties, to the marriage for that party in relation to the debt owed to the creditor;
(c)an order directed to a creditor of the parties to the marriage that the parties be liable for a different proportion of the debt owed to the creditor than the proportion the parties are liable to before the order is made;
…
(2) ... any other order that:
(a)directs a third party to do a thing in relation to the property of a party to the marriage; or
(b)alters the rights, liabilities or property interests of a third party in relation to the marriage."
Having identified the orders that the court is empowered to make under s 90AE(1) or (2), s 90AE(3) provides that a court may only make an order under s 90AE(1) or (2) if:
"(a)the making of the order is reasonably necessary, or reasonably appropriate and adapted, to effect a division of property between the parties to the marriage; and
(b)if the order concerns a debt of a party to the marriage – it is not foreseeable at the time that the order is made that to make the order would result in the debt not being paid in full; and
(c)the third party has been accorded procedural fairness in relation to the making of the order; and
(d)the court is satisfied that, in all the circumstances, it is just and equitable to make the order; and
(e)the court is satisfied that the order takes into account the matters mentioned in [s 90AE(4)]." (emphasis added)
The matters listed in s 90AE(4) are:
"(a)the taxation effect (if any) of the order on the parties to the marriage;
(b)the taxation effect (if any) of the order on the third party;
…
(e)if the order concerns a debt of a party to the marriage – the capacity of a party to the marriage to repay the debt after the order is made;
(f)the economic, legal or other capacity of the third party to comply with the order;
(g)if, as a result of the third party being accorded procedural fairness in relation to the making of the order, the third party raises any other matters – those matters;
(h)any other matter that the court considers relevant." (emphasis added)
Section 90AE was intended to cover, and covers, a range of possible arrangements that a party to the marriage may have which involve a third party, including ownership of life insurance products, shares in corporate entities and the creditors of the parties to a marriage whether they are family, friends or financial institutions[64]. The range of available orders was "intended to be broad and include[d] substitution of the party liable for a debt, adjusting the proportion of a debt that each party is liable for or ordering the transfer of shares between the parties to the marriage"[65].
[64]Australia, Senate, Family Law Amendment Bill 2003, Revised Explanatory Memorandum at 24 [147]; Australia, House of Representatives, Parliamentary Debates (Hansard), 12 February 2003 at 11571.
[65]Australia, Senate, Family Law Amendment Bill 2003, Revised Explanatory Memorandum at 24 [148].
However, the circumstances in which the orders may be made against a third party are confined. Relevantly for the purposes of this appeal, the court may only make an order concerning a debt of a party to a marriage which binds a third party if "it is not foreseeable at the time that the order is made that to make the order would result in the debt not being paid in full"[66] (emphasis added). As will become apparent, this provision is important in applying s 90AE to a debt owed to the Commonwealth which arises under a taxation law.
[66]s 90AE(3)(b) of the Family Law Act. See also Australia, Senate, Family Law Amendment Bill 2003, Revised Explanatory Memorandum at 24 [149].
Part VIIIAA is facultative and protective. It relevantly provides that Pt VIIIAA has effect despite anything to the contrary in any other law (written or unwritten) of the Commonwealth, a State or Territory, and anything in a trust deed or other instrument[67], and that a third party in relation to a marriage is not liable for loss or damage suffered by any person because of things done (or not done) by the third party in good faith in reliance on an order made by a court in accordance with Pt VIIIAA[68].
[67]s 90AC(1) of the Family Law Act.
[68]s 90AH of the Family Law Act.
Finally, the drafters specifically addressed the effects of the provisions on the executive functions of government. That is evident in two separate ways. First, s 90AE imposes a duty on the court to be satisfied that any order takes into account the taxation effect (if any) of the order on the parties to the marriage and on the third party as well as the social security effect (if any) of the order on the parties to the marriage[69]. Second, Pt VIIIAA had a deferred commencement. The Senate's Supplementary Explanatory Memorandum explained that the purpose of the deferred commencement was to[70]:
"ensure that any affected third parties, such as banks or financial services bodies, are given sufficient time to make any necessary changes, for example to their operating systems, as a result of the introduction of these provisions. The deferred commencement will also ensure that any necessary consequential amendments, such as amendments to taxation or social security legislation, can be made before the provisions commence."
No subsequent consequential amendment to the taxation or social security legislation was identified in argument.
[69]s 90AE(3)(e) and (4)(a)-(c) of the Family Law Act.
[70]Australia, Senate, Family Law Amendment Bill 2003, Supplementary Explanatory Memorandum at 2 [3].
Parts VIII and VIIIAA: The application of Crown immunity
The presumption that Pt VIIIAA does not apply to the Crown has, in all the circumstances, been rebutted.
First, Pts VIII and VIIIAA disclose a legislative intent that the relevant provisions of Pt VIIIAA bind the Crown, when regard is had to: the generality of the language and the express reach of the provisions (including s 90AC); the fact that Pt VIIIAA was introduced specifically to address third parties and restrictions on the ability of a court to direct a third party to act in order to give effect to property settlements[71]; the fact that a purpose of Pts VIII and VIIIAA is to finalise financial relationships between the parties to a marriage[72]; and, finally, the fact that the effect of the provisions on third parties is confined in the manner described earlier.
[71]Australia, Senate, Family Law Amendment Bill 2003, Revised Explanatory Memorandum at 22 [134]. See generally Ascot Investments Pty Ltd v Harper (1981) 148 CLR 337; [1981] HCA 1.
[72]See s 81 of the Family Law Act.
Second, the Commissioner's contention that, although the Commissioner was a "creditor" for the purposes of ss 79 and 79A, he was not a "creditor" for the purposes of Pt VIIIAA is misplaced and should be rejected. The Commonwealth, not the Commissioner, was and remains the creditor. Moreover, the contention finds no support in the language of the two Parts and, in fact, is contrary to the express words of the relevant provisions as well as the mischief that Pt VIIIAA was intended to address. For example, Pt VIIIAA must be construed in light of the Commissioner's acceptance that Pt VIII permits the making of orders affecting a "public authority"; and that "public authority" includes the Commonwealth. Further, Pt VIIIAA operates to extend the powers in s 79 in Pt VIII. There is no logical basis for distinguishing between the treatment of the Commonwealth in Pt VIII (as a creditor, and subject to that Part) and the treatment of the Commonwealth in Pt VIIIAA (which extends the court's powers under Pt VIII).
Third, the conclusion that Pts VIII and VIIIAA disclose a legislative intent that the relevant provisions of Pt VIIIAA bind the Crown is reinforced when one considers the application of s 90AE to the Commonwealth as creditor as well as the Commissioner, as a holder of a statutory office, with responsibilities in relation to debts owed to the Commonwealth under a taxation law. As was stated earlier, the impact or effect on the Crown of specific legislation, and whether it was intended by Parliament that the legislation have this impact or effect, are relevant. Here, in the application of s 90AE, there is, and there can be, no relevant impact or effect on the Commonwealth, or on the Commissioner, as a holder of a statutory office, with responsibilities in relation to debts owed to the Commonwealth under a taxation law. This is because of s 90AE(3): the Commonwealth is not treated differently from any other third party, and, contrary to the Commissioner's submissions, the Commonwealth can be no worse off. When looked at from an operational perspective, not only is the Commonwealth revenue protected but Pt VIIIAA does not "disrupt" the taxation law. That last statement requires further explanation.
As we have seen, s 90AE(3)(b) provides that the court may only make an order concerning a debt of a party to a marriage which binds a creditor under s 90AE(1) if "it is not foreseeable at the time that the order is made that to make the order would result in the debt not being paid in full" (emphasis added). Practically, a s 90AE order would rarely, if ever, be made substituting one party of the marriage for another party in relation to a debt owed to the Commonwealth arising under or as a result of the application of a taxation law.
The fact that a court will rarely, if ever, make an order under s 90AE in relation to a tax debt – a debt owed to the Commonwealth – may be illustrated by considering a primary tax debt arising from an assessment issued by the Commissioner under Div 155 of Sch 1 to the TAA.
A "tax debt" is a "primary tax debt" (relevantly defined to mean any amount due to the Commonwealth directly under a taxation law[73] including any amount that is not yet payable) or a "secondary tax debt" (defined to mean an amount that is not a primary tax debt but is due to the Commonwealth in connection with a primary tax debt)[74]. An amount due under an assessment issued by the Commissioner is an example of a primary tax debt. An amount due to the Commonwealth under an order of a court made in a proceeding for recovery of a primary tax debt is an example of a secondary tax debt.
[73]See fn 17 above.
[74]See the definitions of "tax debt", "primary tax debt" and "secondary tax debt" in s 995-1(1) of the 1997 Act read with s 8AAZA of the TAA.

Thirdly, an order under s 90AE(1) or (2) of the Family Law Act can only be made if the requirements of s 90AE(3) are satisfied. Those requirements are fivefold:
"(a)the making of the order is reasonably necessary, or reasonably appropriate and adapted, to effect a division of property between the parties to the marriage; and
(b)if the order concerns a debt of a party to the marriage – it is not foreseeable at the time that the order is made that to make the order would result in the debt not being paid in full; and
(c)the third party has been accorded procedural fairness in relation to the making of the order; and
(d)the court is satisfied that, in all the circumstances, it is just and equitable to make the order; and
(e)the court is satisfied that the order takes into account the matters mentioned in [s 90AE(4)]."
The effect of s 90AE(3)(b) is that the Crown will only be subject to the substitution of a person as its debtor where it is not foreseeable that the substitution would cause the debt not to be paid in full. Further, two of the matters in s 90AE(4) which the court must take into account are (i) the taxation effect (if any) of the order on the parties to the marriage[150], and (ii) any other matters raised by the third party, who must be accorded procedural fairness[151]. Hence, if the order would have the effect of depriving a spouse of the possible exercise of rights of objection to, review of, or appeal from, the assessment, then this could be a taxation effect (s 90AE(4)(a)) or a reason of justice and equity (s 90AE(3)(d)) that would militate against making the order. Further, to the extent that an order under s 90AE(1) would have an effect on the general interest charge provisions in Pt IIA of the Taxation Administration Act, or the Commissioner's power to amend assessments, then these matters would be taken into account by the court when considering, under s 90AE(3)(d), whether it is just and equitable to make the order.
[150]Section 90AE(4)(a).
[151]Section 90AE(4)(g).
Fourthly, to the extent that any conflict would otherwise exist between the Taxation Statutes and Pt VIIIAA of the Family Law Act, s 90AC(1) of the Family Law Act relevantly provides that Pt VIIIAA "has effect despite anything to the contrary" in any written law of the Commonwealth. The only exception to this is in relation to superannuation annuities within the meaning of the Income Tax Assessment Act 1997 (Cth), for which s 90ACA expressly provides that the powers in Pt VIIIAA have no application.
When these four points are appreciated, there can be no conflict between the Taxation Statutes and Pt VIIIAA of the Family Law Act, and certainly no conflict that would require the latter to be interpreted as excluding from its reach tax debts owed to the Commonwealth.
The answer to the question reserved and the orders on this appeal
There was no dispute in the Full Court or in this Court about the reservation or expression of the question for the Full Court. That question was as follows:
"Does s 90AE(1)-(2) of the Family Law Act 1975 (Cth) grant the court power to make Order 8 [substituting the husband for the wife as the debtor to the Commissioner] of the final orders sought in the amended initiating application of the Wife?"
The question concerned the jurisdiction – that is, the boundaries of the authority – of a court under the Family Law Act. The "first duty" or "threshold" consideration "of any Court, in approaching a cause before it, is to consider its jurisdiction"[152]. There was no sufficient reason in this case, where jurisdiction was challenged, for the Federal Circuit Court to ignore that challenge and to proceed instead to consider whether to make the order on the assumption that it had the authority to do so. Whether or not the power should be exercised and the order made, it was appropriate for the disputed jurisdictional question to be reserved by the primary judge for the consideration of the Full Court of the Family Court.
[152]Hazeldell Ltd v The Commonwealth (1924) 34 CLR 442 at 446; [1924] HCA 36. See also Federated Engine-Drivers and Firemen's Association of Australasia v Broken Hill Proprietary Co Ltd (1911) 12 CLR 398 at 415; [1911] HCA 31; Old UGC Inc v Industrial Relations Commission (NSW) (2006) 225 CLR 274 at 290 [51]; [2006] HCA 24; Leeming, Authority to Decide: The Law of Jurisdiction in Australia (2012) at 35-36.
The Full Court answered the question reserved as follows:
"Yes, but with the proviso that s 90AE(1) confers power only to make an order that the Commissioner be directed to substitute the [husband] for the [wife] in relation to the debt owed by the [wife] to the Commissioner of Taxation for the Commonwealth of Australia."
The Full Court's answer properly concerned only the existence of the power, not whether the preconditions to its exercise were satisfied. For the reasons above, the answer given by the Full Court was correct. The appeal should be dismissed.