FINDLAY and REYNOLDS
[2020] FCWA 189
•22 OCTOBER 2020
JURISDICTION : FAMILY COURT OF WESTERN AUSTRALIA
ACT: FAMILY LAW ACT 1975
LOCATION: PERTH
CITATION: FINDLAY and REYNOLDS [2020] FCWA 189
CORAM: O'BRIEN J
HEARD: 22 OCTOBER 2020
DELIVERED : Ex tempore
FILE NO/S: PTW 2677 of 2020
BETWEEN: MR FINDLAY
Applicant
AND
MS REYNOLDS
Respondent
Catchwords:
PROPERTY - Joint application for consent orders - Where prior to lodging the application the parties executed a Financial Agreement pursuant to s 90D - Where that agreement applies to financial matters including alteration of property interests - Where there is accordingly no power to make the proposed consent orders.
Legislation:
Family Law Act 1975 (Cth)
Category: Reportable
Representation:
Counsel:
| Applicant | : | Mr Rynne |
| Respondent | : | Ms Bunney |
Solicitors:
| Applicant | : | Balmoral Legal |
| Respondent | : | Cullen Macleod Lawyers |
Case(s) referred to in decision(s):
Senior and Anderson (2011) FLC 93–470
WORDS IN SQUARE BRACKETS REPLACE WORDS USED IN THE ORIGINAL JUDGMENT – PARTIES’ NAMES AND IDENTIFYING DETAILS HAVE BEEN CHANGED
IT IS NOTED that publication of this judgment by this Court under the pseudonym Findlay & Reynolds has been approved by the Family Court of Western Australia pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
1The matter requiring determination is the joint Form 11 Application for consent orders filed by the parties on 7 August 2020. The requirement for a determination emerges in somewhat unusual circumstances.
2Both parties are represented. When the application was filed it was accompanied by a covering letter countersigned by both solicitors. That letter confirmed that, as noted in the recitals to the Minute of proposed consent orders, the parties had “entered into a Financial Agreement which is intended to provide clarity as to [their] deliberations, investigations and the like prior to their entry into their agreement in respect of the division of property”.
3The letter went on to say that while the solicitors did not “propose to provide specific detail as to the Financial Agreement, [they could] confirm that the Section 90D Financial Agreement does not oust the jurisdiction of the Court and, in fact, requires that the parties do present” the application for consent orders within 14 days of the execution of the Agreement.
4Unsurprisingly, the registrar to whom the joint application was initially referred was not prepared to simply accept that assurance. The Principal Registrar wrote to the solicitors for the parties on 7 September 2020 requesting a copy of the Financial Agreement to assist in the required consideration of the justice and equity of the proposed orders. The letter also foreshadowed the intention of the relevant registrar to refer the application for consideration by a judge, given the apparent complexity of the financial affairs of the parties.
5The solicitors jointly responded by letter dated 7 October 2020, enclosing a copy of the Financial Agreement, pointing out that each party had received independent legal advice, acknowledging a degree of complexity in the property interests available for division, but emphasising that agreement had been reached and that the parties were keen to finalise the matter as quickly as possible.
6The letter also stated that:
“The intent of the Financial Agreement was to outline the circumstance of the parties and to confirm that neither party would seek spousal maintenance from the other.”
7The joint application was then referred to me. At my direction, the matter was listed for hearing in open court this morning. When notified of the listing, the parties were informed that it had been granted to afford counsel the opportunity to make submissions, should they wish to do so, in relation to the operation of s 71A of the Family Law Act 1975 (Cth) (“the Act”) as it relates to the proposed orders.
The legal framework
8The Financial Agreement executed by the parties on 13 August 2020 is expressed to be made pursuant to s 90D of the Act. On its face, the agreement appears to comply with the requirements of s 90G, such that it is binding on the parties.
9Section 90D provides that a written agreement between parties to a former marriage, after a divorce order is made, is a financial agreement if it is expressed to be made under that section and if it is “a written agreement with respect to any of” the following matters:
(a)how all or any of the property or financial resources that either or both of the spouse parties had acquired during the former marriage is to be dealt with;
(b)the maintenance of either of the spouse parties.
10Section 71A provides that Part VIII of the Act does not apply to:
(a)financial matters to which a financial agreement that is binding on the parties to the agreement applies; or
(b)financial resources to which a financial agreement that is binding on the parties to the agreement applies.
11By definition, reference in s 71A to a financial agreement includes a financial agreement under s 90D.
12The term “financial matters” is defined to mean matters with respect to:
(a)the maintenance of one of the parties; or
(b)the property of those parties or of either of them; or
(c)the maintenance of children of the marriage.
13As the Full Court has observed, “the court’s power to make an order for property settlement pursuant to s 79 of the Act is removed in respect of “financial matters” to which a “financial agreement” applies if that “financial agreement” is binding”.[1]
The present issue
[1] Senior and Anderson (2011) FLC 93–470 at [86] per Strickland J.
14The issue which presents itself in this case, and to which the solicitors for the parties were alerted prior to this hearing, is whether the Financial Agreement by its terms removes the court’s power to make the proposed consent orders pursuant to s 79 of the Act, because the proposed orders are in respect of financial matters or financial resources to which the Agreement applies.
15The parties would contend that the Agreement relevantly does no more than bind the parties to their agreement to jointly seek the proposed consent orders, and that (to paraphrase the submissions made) only the court’s power to make an order for spousal maintenance is ousted.
16The difficulties with that submission, in my view at least, are made evident by an examination of the terms of the Agreement itself.
17The recitals to the Agreement include the following agreed statement as to its purpose:
“[the parties] wish to:
(i)end all financial relations between them on the basis of this agreement;
(ii)enter into this financial agreement under s 90D of the Family Law Act 1975 (Cth) (“the Act”);
(iii)outline their respective obligations to one another in respect of spousal maintenance in this Agreement; and
(iv)oust the jurisdiction of the Family Court under Part VIII of the Act in relation to all financial matters arising from the marriage other than for making Orders as contemplated in this agreement”.
18The Agreement expressly provides that the recitals and annexures to it form part of it.
19The operative part of the Agreement relevantly includes the following clauses:
“3.3[the parties agree that] this Agreement contains the whole of their agreement in respect of their property and financial resources and they are not relying upon any representations made to them by the other party which are not specifically referred to in this Agreement and Annexures; and
3.4This Agreement relates to:
3.4.1how, the following the breakdown of their marriage, all their property and financial resources at the time of this Agreement are to be dealt with;
3.4.2the maintenance of either of them during the marriage (sic) and after divorce; and
3.4.3matters incidental to those in the immediately preceding subclauses of this Agreement”.
20Later, it is recorded that the parties “agree the following facts”:
(a)that the independent legal advice received by each of them was “specifically in relation to property and financial maintenance matters (sic) as a result of the breakdown of their relationship”;
(b)that they “accept that the table annexed to [the] agreement… comprises the assets, liabilities and financial resources that are held controlled or are “alter ego’s” (sic) of the parties either jointly or individually”;
(c)that the “items appearing [in the] annexure represent the legal and/or equitable interests in property that they wish dealt with for the purposes of these this agreement”. (sic)
21Still further, the Agreement provides that the value of the items appearing in the annexure can be determined either by formal valuation or agreement between the parties. It records further the agreement of the parties not to value the interest of a named trust, while noting that “it has formed part of the party’s (sic) deliberations in entering into [the] agreement”. The agreement lists certain items from the annexure in respect of which the parties agree the values as shown, and otherwise records the agreement of the parties that “all other items of property are to be valued at the vouching date as appearing in the comments appearing against each item in [the annexure]”.
22The agreement also includes the following clauses:
“9) the parties agree that their interests in property will be altered in accordance with the Consent Orders attached to [the Agreement];
10)within 14 days of the date of this Agreement, the parties shall do all things necessary to sign and lodge the Consent Orders annexed to this Agreement and lodge those documents with the Family Court of Western Australia in order that the Orders sought within those documents can be made;
11)the parties agree that they have agreed that the property interests will be altered such that it is retained by each of them in the way as outlined in Orders of the Family Court of Western Australia”. (sic)
23The Agreement also includes at clause 12 what are described as “vesting provisions” whereby each party relinquishes any claim to the assets and financial resources of the other except as otherwise provided for in the Agreement. By its terms, that clause purports to bind the parties to relinquish any claim to assets and financial resources of the other not dealt with by the proposed consent orders.
24Finally, the Agreement also includes the following clause:
“In consideration for the entitlements that each of them will receive pursuant to this Agreement, each of the parties will waive any and all rights and/or claims they may have now or in the future against the other party for property alterations or spousal maintenance Orders under Part VIII of the Act”.
25I accept the statements of the solicitors for the parties that in drafting the Agreement their intention was that the document would have the effect of binding the parties to their commitment to seek the proposed consent orders in this court, and the further effect of excluding any possible future claim for spousal maintenance by either of them.
26I accept also that it is possible for a carefully drafted Financial Agreement to, for example, apply to a singular item of property without ousting the power of the Court to make orders in relation to the balance of the property of the parties.
27Notwithstanding that, for reasons which should be obvious from the specific clauses of the Agreement referred to, I conclude that the Financial Agreement executed by the parties applies so broadly to financial matters including the property of the parties or either of them, within the meaning of s 71A, such that Part VIII of the Act does not apply and the proposed consent orders cannot be made, where it is common ground that the Agreement is binding.
28That conclusion having been reached, it is unnecessary to consider the justice and equity of the proposed settlement and I record that I have not done so.
29Having foreshadowed that possible outcome I heard from counsel as to what steps should be taken from this point. Counsel agreed that in the circumstances they would intend to prepare and have executed a termination agreement and that they would then seek that the Court review the joint application for consent orders and make orders in its terms.
30Noting that I have not yet considered the justice and equity of the proposed consent orders, I am prepared to accommodate that course of action and to review the application for consent orders as promptly as that can be arranged, without the need for further appearance by the parties. If I am satisfied that the proposed settlement is just and equitable orders can be pronounced without further delay.
31There will be the following orders.
Orders
1.The joint application of the parties for alteration of property interests filed on 18 August 2020 stand adjourned generally.
2.The parties have liberty to seek that the said application be referred to the Honourable Justice O’Brien in chambers for consideration, such request to be accompanied by an executed copy of a Termination Agreement, terminating the financial agreement entered into by the parties on 13 August 2020.
3.In the event that no such request is received by the Registry by the close of Registry on 27 November 2020, the joint application is to be referred to the presiding judge in chambers for dismissal without further reference to the parties.
These reasons are the reasons for decision delivered on 22 October 2020, edited in places but only as to correct grammatical errors and some infelicity of expression without variation to the substance thereof.
I certify that the preceding paragraph(s) comprise the reasons for decision of the Family Court of Western Australia.
KM
Associate
23 OCTOBER 2020
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