Garvey & Jess
[2016] FamCA 445
•7 June 2016
FAMILY COURT OF AUSTRALIA
| GARVEY & JESS | [2016] FamCA 445 |
| FAMILY LAW – FINANCIAL AGREEMENT – Whether financial agreement void for uncertainty – Whether parties entered into an “agreement to agree” – Where the agreement provides for the division of future, joint assets – Where the agreement requires joint assets be divided equally – Application dismissed. |
| Family Law Act 1975 (Cth) ss 71A, 79, 90B, 90G, 90K, 90KA |
| Fevia & Carmel Fevia (2009) FLC 93-411 Interlink Australia Pty Ltd v Gwedoline Elva Lowe [2015] QCA 211. Kostres & Kostres (2009) FLC 93-420 Ruane Backman-Ruane and Anor [2009] FamCA 1101 Tramways Advertising Pty Ltd v Luna Park (1938) 38 SR (NSW) 632 Weiss, MM v Barker Gosling (1993) FLC 92-399 |
| APPLICANT: | Mr Garvey |
| RESPONDENT: | Ms Jess |
| FILE NUMBER: | BRC | 2175 | of | 2016 |
| DATE DELIVERED: | 7 June 2016 |
| PLACE DELIVERED: | Brisbane |
| PLACE HEARD: | Brisbane |
| JUDGMENT OF: | Carew J |
| HEARING DATE: | 27 May 2016 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr Kearney SC |
| SOLICITOR FOR THE APPLICANT: | Barry.Nilsson Lawyers |
| COUNSEL FOR THE RESPONDENT: | Dr Brasch QC with Ms Minnery |
| SOLICITOR FOR THE RESPONDENT: | Phillips Family Law |
Orders
That the wife’s Response to an Application in a Case filed 12 April 2016 be dismissed.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Garvey & Jess has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
| FAMILY COURT OF AUSTRALIA AT BRISBANE |
FILE NUMBER: BRC 2175 of 2016
| Mr Garvey |
Applicant
And
| Ms Jess |
Respondent
REASONS FOR JUDGMENT
The parties to this dispute are Mr Garvey (“the husband”) and Ms Jess (“the wife”). The husband is ultimately seeking to enforce the terms of a deed signed by the parties on 3 August 2006 (“the deed”). He contends that the deed is a financial agreement that is binding within the meaning of the Family Law Act 1975 (as amended) (Cth) (“the Act”). The only order sought by the husband at this hearing is for the wife’s Response to his Application in a Case to be dismissed.
The wife contends that the deed is void for uncertainty and that, accordingly, the husband’s Application for enforcement should be dismissed.
Background
The husband and wife married in 2006 and separated on 15 June 2015 according to the husband or 28 April 2015 according to the wife. The deed itself provides a mechanism for giving notice of a separation. They have two children aged 9 and 6. The children live with their parents in a shared care arrangement.
On 3 August 2006 the parties entered into a deed signed by the wife on 27 July 2006 and by the husband on 3 August 2006. Each of the parties was legally represented at the time. The deed purports to be a financial agreement pursuant to s 90B of the Act.
The deed relevantly provides:
Introduction
3. The parties intend to marry on the … 2006 and wish to enter into a financial agreement before marriage to preclude claims of any nature relating to financial matters that either party may have against the other pursuant to either of the:
3.1 Family Law Act 1975 (Cth); and
3.2 Property Law Act 1974 (Qld),
in the event that the relationship ends, the parties separate after the date of marriage (save that the parties shall not be prevented from bringing a claim for spouse maintenance against the other, should there be a child or children born of the parties’ relationship) or one of the parties dies within a period of 12 years from the date of this Agreement,
…
4. This Agreement relates to all property and financial resources of either of the parties and relates to spousal maintenance of [Ms Jess] and [Mr Garvey] both during and after the relationship or marriage. It is an agreement pursuant to section 90B of the Family Law Act 1975 (Cth).
Interpretation
1.1.1 “Agreement” means this deed including the Schedules;
1.1.3 “[Mr Garvey] Assets” means:
1.1.3.1 the assets specified in Schedule 1;
1.1.3.2 any asset which the parties agree in writing is to be treated as a [Mr Garvey] Asset for the purposes of this Agreement;
1.1.3.3 the proceeds of sale of any of the [Mr Garvey] Assets; and
1.1.3.4 any assets owned by [B Pty Ltd] or an entity which is a Related Entity of [B Pty Ltd],
but excludes the Joint Assets.
1.1.4 “[Ms Jess] Assets” means:
1.1.4.1 the assets specified in Schedule 2;
1.1.4.2 any asset which the parties agree in writing is to be treated as a [Ms Jess] Asset for the purposes of this Agreement; and
1.1.4.3 the proceeds of sale of any of the [Ms Jess] Assets;
but excludes the Joint Assets.
1.1.6 “Joint Assets” means:
1.1.6.1 the assets specified in Schedule 3;
1.1.6.2 any of the [Mr Garvey] Assets or the [Ms Jess] Assets which the parties agree in writing is to be treated as a Joint Asset for the purpose of this Agreement;
1.1.6.3 any assets acquired by either or both of [Mr Garvey] and [Ms Jess] after the Marriage Date other than an asset which the parties agree in writing is to be treated as a [Mr Garvey] Asset or an [Ms Jess] Asset (as the case may be) for the purposes of this Agreement.
1.2.5 All provisions of this Agreement shall so far as possible be construed so as not to be invalid, illegal or unenforceable, in any respect, but if any provision on its true interpretation is illegal, invalid or unenforceable, that provision shall so far as possible be read down to such extent as may be necessary to ensure that it is not illegal, invalid or unenforceable and as may be reasonable in all the circumstances so as to give it a valid operation of a partial character. …
2. Family Law Act
The parties agree that this Agreement is made under section 90B of the Family Law Act 1975 (Cth) and that this Agreement is a financial agreement, …
3.1.4 Each of the parties has received separate legal advice before executing this Agreement … [s90G matters]
3.1.5 The parties have decided to finalise all financial matters which may cause a dispute in the future …
4. Separation
4.1 If either of the parties wishes to separate from the other party, that party must give notice in writing to the other party of that party’s intention to do so (“the Separation Notice”).
4.2 Upon the giving or receipt of a Separation Notice the parties shall not;
4.2.1 charge or dispose of any Joint Assets; or
4.2.2 withdraw any money from any account held with a bank or financial institution in the names of both parties,
without the consent, in writing, of both parties.
4.3 In the event of a breakdown of the marriage of the parties …
4.3.1 [Mr Garvey] shall be solely entitled to retain for his sole use and benefit, the [Mr Garvey] Assets …
4.3.2 [Ms Jess] shall be solely entitled to retain for his sole use and benefit, the [Ms Jess] Assets …
4.3.3 The Joint Assets shall be equally divided between the parties and the parties shall be equally responsible for and indemnify the other against one half of all liability encumbering or incurred in acquiring the Joint Assets, …
5. Term of Agreement
5.1 Subject to Clause 5.2, this Agreement shall commence as and from the date of its execution by both parties and shall continue until the earlier of:
5.1.1 The date which is twelve (12) years after the date of this Agreement; …
10.3 Each party agrees to be bound by the terms and conditions of this Agreement, and further agrees that this Agreement may only be varied or rescinded by a written agreement by both parties.
Forming part of the deed are three schedules described as “[Mr Garvey] Assets” (listing assets to the net value of approximately $1,055,000), “[Ms Jess] Assets” (listing assets to the net value of approximately $417,500), and “Joint Assets” (listing assets (including a trust) to the net value of approximately $804,000).
A certificate is attached to the deed signed by Mr Stephen Fox, solicitor for the husband, certifying the matters required by s 90G of the Act and a certificate is attached to the deed signed by Mr James Naughton, solicitor for the wife, certifying the matters required by s 90G.
On 29 June 2015 the husband gave notice of the separation to the wife by a separation notice as contemplated by the deed.
The husband proposes that the terms of the deed be enforced. He proposes a mechanism for that to occur.
The wife resists enforcement on the basis that there was never an agreement because the essential terms of the deed were uncertain. In the alternative she proposes that the terms of the deed be enforced and proposes a mechanism for that to occur. The wife has also filed an Initiating Application in which she seeks an order for inter alia spousal maintenance, child support, a s 79 order to the extent the deed does not deal with all property and, dependent upon the outcome of this application, a s 79 order in relation to all property.
Issues requiring determination
The only issue for determination at this hearing is whether the deed is void for uncertainty.
If I find the deed not to be uncertain it seems to be conceded that the statutory requirements of ss 90B and 90G have been complied with and that the deed is a binding financial agreement to be enforced, though how it is to be enforced is the subject of competing applications and will await determination at another time. I may be inferring too much by the alternative orders for enforcement sought by the wife in her Response viz that the concessions, as identified, are made but other than ‘uncertainty’, no other attack is made on the deed. In particular, no challenge is made to compliance with the formal requirements necessary to create a financial agreement that is binding and I note the deed:
a)was signed by the parties;
b)was stated to be a financial agreement pursuant to s 90B;
c)dealt with how, on breakdown of the relationship, property was to be dealt with;
d)contained a clause of explanation of rights by a legal practitioner; and
e)has certificates from each party’s lawyer annexed.
Prima facie at least, if there is an agreement, there appears to be no issue with ss 90B or 90G compliance.
Wife’s argument
In the written outline relied upon by the wife, the bases upon which it is submitted that the husband’s Application for enforcement ought be dismissed are as follows:
a)The deed is at best an agreement to agree;
b)The definitions for “[Mr Garvey] Assets”, “[Ms Jess] Assets” and “Joint Assets” do not allow the Court to determine which assets form part of each defined group;
c)The provisions purporting to deal with the division of “[Mr Garvey] Assets”, “[Ms Jess] Assets” and “Joint Assets” provides only, in clause 4.3.3, that the “Joint Assets” are to be divided equally. There is no provision with respect to how the property (other than furniture and superannuation) is to be divided equally;
d)There is no provision in the deed that indicates the date at which the assets that the husband asserts are “[Mr Garvey] Assets”, “[Ms Jess] Assets” and “Joint Assets” should be divided;
e)Both parties assert that the other party has expended money that they ought not;
f)The deed does not, in any way, deal with the spousal maintenance rights of the parties; and
g)Notwithstanding the provisions in the deed dealing with the division of specified property in the event of separation, the husband seeks enforcement orders that alter the substantive rights of the parties which cannot be achieved by way of enforcement.[1]
[1] The last matter in the written outline (not included herein) contends that these matters cannot be determined on an interim basis, but no application was made for the hearing to be adjourned to another date and there was no application to cross-examine.
Dr Brasch QC for the wife eschewed the need to rely upon s 90K or for an order that the deed is void for uncertainty pursuant to that section. Rather, it was argued that there never was a concluded agreement because the essential terms were uncertain or absent. Relying upon the comments made by Murphy J in Fevia & Carmel-Fevia (2009) FLC 93-411:
121. … That there must be an agreement before there can be a “financial agreement” is made clear by the definition of “financial agreement” in s 4 of the Act. The ordinary and natural meaning of “agreement” is, in my view, an agreement which is otherwise effective and enforceable at law. That this meaning of “agreement” is contemplated by the Act is, in my view, underscored by s 90K(1)(b) and s 90KA.
it is argued that the Application for enforcement should be dismissed, presumably by reference to general contractual principles applicable by virtue of s 90KA or more generally, rather than by making an order that the agreement is void pursuant to s 90K(1)(b).
Interestingly, the introductory part of s 90K(1) provides:
A court may make an order setting aside a financial agreement … if, and only if, the court is satisfied that:
(b) the agreement is void, ...
[emphasis added]
which seems to presuppose the existence of a financial agreement because if there is no agreement, there is no financial agreement to set aside. (see Ruane & Backman-Ruane and Anor [2009] FamCA 1101 at [54])
The same could be said of s 90KA which provides:
The question whether a financial agreement … is valid … is to be determined by the court according to the principles of law and equity that are applicable in determining the validity … of contracts and purported contracts, and, in proceedings relating to such an agreement, the court:
(a)Subject to paragraph (b), has the same powers, may grant the same remedies … as the High Court has, … in connection with contracts or purported contracts, being proceedings in which the High Court has original jurisdictions; and
(b)Has power to make an order for the payment, … of interest … ; and
(c)In addition to, or instead of, making an order or orders under paragraph (a) or (b), may order that the agreement, or a specified part of the agreement, be enforced as if it were an order of the court.
It is perhaps curious that the term ‘purported financial agreement’ is not used in both ss 90K and 90KA in the same way the adjective is used in the first paragraph of ss 90KA and 90KA(a) where reference is made to ‘purported contracts’.
Ultimately, in the circumstances of this case, I do not find it necessary to decide whether the wife’s application should have been brought by reference to ss 90K and/or 90KA.
In relation to the ‘uncertainty’ challenge identified in paragraph 14 a), b), c) and d) above, it is argued that the alleged agreement and in particular the ‘agreement to equally divide the joint assets’ is nothing more than an agreement to agree. Dr Brasch QC submits that what was needed to make the agreement binding was for there to be a ‘meeting of minds’ about how to give effect to the ‘equal division’. She submits that this could have been done by making provision for:
a)Sale, if agreement could not be reached;
b)Who was to keep which asset/s or class of assets;
c)How and at what date to value the assets if agreement could not be reached as to their value;
d)A formula to apply to determine equality after valuation; or
e)The court to determine if the parties cannot agree.
In particular it was argued that if there was a provision in the terms of 20 e) above, the agreement would not have been uncertain.
The fact that the husband included in his affidavit a reference to there being ‘other assets’ covered by the agreement lends weight, it is argued, to the submission that the deed is void for uncertainty.
The particular paragraphs in the husband’s affidavit filed 11 March 2016 referred to are as follows:
12. I have property interests which do not form part of the agreement for division between [Ms Jess] and I. (sic)
13. [Ms Jess] has property interests which do not form part of the agreement for division between [Ms Jess] and I. (sic)
The paragraph preceding those two paragraphs in the same affidavit sets out what the husband contends are the assets falling into the definition of ‘joint assets’ and the liabilities encumbering them.
Further, it is argued, the proposed enforcement orders sought by the husband go beyond providing a mechanism for implementation but affect the substantive rights of the parties.
The gravamen of the argument appears to be that provision for a mechanism for implementation was an essential term that was absent from the deed and without it there could be no concluded agreement.
Husband’s argument
Mr Kearney SC argues on behalf of the husband that the deed will only be void for uncertainty if ‘essential terms’ are uncertain or lacking and that uncertainty will not be established simply because the deed may be capable of more than one meaning or productive of more than one outcome. The matters about which complaint be made are not essential terms.
It is argued that this was more than an agreement to agree. The parties intended to enter into a deed pursuant to s 90B that would be binding upon them in the event their marriage broke down and made provision for what was to occur in that event viz they would each respectively keep assets relevantly defined as “[Mr Garvey] Assets” and “[Ms Jess] Assets” and the joint assets would be divided equally.
It is argued that a failure to specify the mechanism/s by which an equal division will be produced does not create uncertainty because:
a)A ‘third party’ viz the Court, can settle the mechanism (if the parties cannot agree), and there is no need for the deed to include such a provision given the statutory right to seek that remedy from the Court pursuant to s 90KA;
b)As it is well established that courts will strive to uphold bargains, if such a provision were required, it could be implied in order to give effect to the clear intention of the parties elsewhere contained in the deed viz to equally divide their joint assets and to oust Part VIII of the Act;
c)Any issue arising in relation to what is or is not a “Joint Asset”, a “[Mr Garvey] Asset” or a “[Ms Jess] Asset” falls to be determined by reference to the definitions contained in the deed;
d)The time for identification of the joint assets is by reference to the deed itself which refers to ‘breakdown of the marriage’ as evidenced by the ‘notice of separation’ required by the deed;
e)The dealing by either party with any ‘joint asset’ will necessarily be brought into account in determining the division in view of clause 4.2;
f)While not conceding the existence of assets not in the contemplation of the deed, if there are it would not sound the death knell for the deed because s 90B and s 71A contemplate that not all assets may be dealt with;
g)None of the considerations relevant to s 79 apply.
In relation to the asserted deficiencies relating to spousal maintenance it is submitted that the deed does not preclude a claim for maintenance by the wife. Indeed the deed actually contemplates such an application in the event the parties have children.
The competing contentions as to how the equal division of joint assets is to be effected highlight the real issues in dispute between the parties viz:
a)Whether there is a debt to the husband’s parents for which the parties are jointly liable;
b)Whether the husband is owed money by the trust and whether the debt should be part of the joint assets;
c)The value of the joint assets at the relevant date and whether any adjustment is necessary as between the parties to reflect dealings with those assets following that date and any increase (or decrease) in the value of their equity; and
d)Whether there is any dispute about the in specie distribution of joint assets to be effected so as to equally divide them.
And it is submitted that those matters are properly to be determined pursuant to s 90KA.
Lastly, Mr Kearney SC argues that the ability of each party to formulate detailed minutes of orders which they contend will give effect to the deed serves to deny the contentions advanced by the wife as to the uncertainty of the deed. That there are differing contentions serves only to demonstrate that the Court may have to determine the mechanism for implementation of the deed.
Discussion
Each party relied upon observations made by Cronin J in Ruane (supra) and in particular:
59. The certainty or completeness of an agreement is a matter of degree. The parties have to agree on all of the essential terms. (See Thornby v Goldberg[1964] HCA 41; (1964) 112 CLR 597 at 607). In a financial agreement under s 90C of the Act, certainty and completeness means that there can be no dispute about what the parties expected to happen in the event of breakdown of the relationship. It is hard to imagine any other intention here than to have each party conclude their disputes by reference only to the terms of the agreement.
60. It is possible for courts construing contracts to imply obligations relating to each step necessary to complete a particular agreement between parties (See Cavallari v Premier Refrigeration Co Pty Ltd[1952] HCA 26; (1952) 85 CLR 20 at 27) but there are other times where the complexity of the circumstances would cause a court to decline to imply the terms of a contract as for example, where there is a series of documents said to contain the terms (see Milne v Attorney-General (Tas)[1956] HCA 48; (1956) 95 CLR 460).
It is important, in my view, to have regard to the context in which agreements of this kind are entered into. They are not commercial agreements but arise as a result of a personal relationship which at the time of making is presumably a happy one. Parties to such agreements aim to avoid dispute as to how their assets should be divided if their relationship breaks down at some future time which may be decades away. The future circumstances of the parties cannot possibly be known at the time of entering into such an agreement.
In the circumstances of this case what is clear from the deed is that there was an intention by the parties inter alia:
a)To create legal relations;
b)To enter into a financial agreement that was binding within the meaning of the Act;
c)To avoid all future dispute about the division of property upon the breakdown of their relationship;
d)To each keep their own assets as defined in the deed;
e)To share equally the joint assets as defined in the deed;
f)To share equally any debt encumbering or incurred in acquiring the joint assets;
g)That each be precluded from dealing with the joint assets upon the breakdown of the relationship pending division;
h)That if they had children the deed would not prevent an application for spouse maintenance.
As I understand it, the primary argument advanced by the wife is that the deed is void ab initio because there was no provision for how the intention of the parties was to be implemented and that an order providing a mechanism for implementation is more than a machinery provision but rather impacting upon substantive rights in a way not contemplated by the deed.
In order for that argument to succeed I would need to be satisfied that the absence of such provisions have the effect of making an essential term viz ‘joint assets are to be equally divided’ uncertain or alternatively, that implementation terms are themselves ‘essential terms’ such that the absence of such terms render the deed uncertain and therefore void ab initio.
In Weiss, MM v Barker Gosling (1993) FLC 92-399 Fogarty J dismissed an argument that a costs agreement was void for uncertainty. At page 80 080 his Honour helpfully provides an overview of the relevant principles as follows:
As to the test of uncertainty, a convenient point of reference is Cheshire and Fifoot's Law of Contract, 6th ed at p.97 et seq. It is stated there that a contract will be void for uncertainty only if its essential terms are uncertain or incomplete, unless the uncertain part can be severed, that is it is not essential, leaving the balance of the agreement intact. In determining what is essential and what is inessential, one looks to the intention of the parties. In cases where an essential term of the contract is alleged to be uncertain, such uncertainty may be because either the agreement is incomplete or because it is unclear. Thus, Menzies J in Thorby v Goldberg (1964) 112 CLR 597 at p.607, quoting Sugerman J from the New South Wales Full Court in the same case, stated:
“It is a first principle of the law of contracts that there can be no binding and enforceable obligation unless the terms of the bargain, or at least its essential or critical terms, have been agreed upon. So, there is no concluded contract where an essential or critical term is expressly left to be settled by future agreement of the parties. Again, there is no binding contract where the language used is so obscure and incapable of any precise or definite meaning that the court is unable to attribute to the parties any particular contractual intention.”
It is the latter category which is relevant here. The general approach of the courts is to attempt to uphold a contract despite its lack of clarity. In doing so, the courts will employ an objective test in interpreting the contract and may in appropriate circumstances imply terms into the contract so as to give effect to the parties' intentions. In Upper Hunter County District Council v Australian Chilling and Freezing Co. Ltd. (1967-1968) 118 CLR 429 at pp.436-7 Barwick, CJ said: —
“But a contract of which there can be more than one possible meaning or which when construed can produce in its application more than one result is not therefore void for uncertainty. As long as it is capable of a meaning, it will ultimately bear that meaning which the courts, or in an appropriate case, an arbitrator, decides is its proper construction: and the court or arbitrator will decide its application. The question becomes one of construction, of ascertaining the intention of the parties, and of applying it. [...] In the search for that intention, no narrow or pedantic approach is warranted, particularly in the case of commercial arrangements. Thus will uncertainty of meaning, as distinct from absence of meaning or of intention, be resolved.”
See also the comments of Mason J in Meehan v Jones (1981-1982) 149 CLR 571 at p.589 and Godecke v Kirwan (1973) 129 CLR 629.
[emphasis added]
An ‘essential term’ is defined in the oft quoted case of Tramways Advertising Pty Ltd v Luna Park (1938) 38 SR (NSW) 632 at 641-642 per Jordan J:
The question whether a term in a contract is a condition or a warranty, ie, an essential or a non-essential promise, depends upon the intention of the parties as appearing in or from the contract. The test of essentiality is whether it appears from the general nature considered as a whole, or from some particular term or terms, that the promise is of such importance to the promisee that he would not have entered into the contract unless he had been assured of a strict or a substantial performance of the promise, as the case may be, and that this ought to have been apparent to the promisor.
[emphasis added]
In Kostres & Kostres (2009) FLC 93-420 the Full Court when considering how the terms of a s 90B financial agreement should be interpreted and the circumstances that may lead to its terms not being enforced held:
124. The principle that words “may generally be supplied, omitted or corrected, in an instrument, when it is clearly necessary to avoid absurdity or inconsistency” is a well recognised principle in the law of contract (see Fitzgerald v Masters (1956) 95 CLR 420 at 426; Westpac Banking Corporation v Tanzone Pty Limited & Ors [2000] NSWCA 25).
127. We are of the view that, while common law principles of construction undoubtedly apply and can be used to avoid absurdity, the terms of the agreement must accurately reflect the intention of the parties at the time of the making of the agreement, and be unambiguous. In other words, the meaning to be given to expressions used in the agreement must be clear and their meaning certain.
129. While, for the purpose of construing the agreement a court should, as in the context of a commercial agreement, apply an objective test of a reasonable bystander to the construction of an agreement, it cannot give meaning to an agreement whose terms are so imprecise or ambiguous the parties’ intent cannot be discerned.
[emphasis added]
(See also ASIC v Fortescue Metals Group Ltd & Anor (2011) 190 FCR 364 at [122] – [125]; Ruane & Bachman-Ruane and Anor [2009] FamCA 1101 at [59]);
In my view, the deed is not void for uncertainty because:
a)The deed evinces an intention:
i)to be legally bound;
ii)to oust the jurisdiction of the court pursuant to Part VIII;
iii)to divide the assets in the proportion provided for in the deed.
It is not an ‘agreement to agree’.
b)While the term ‘joint assets shall be equally divided’ is an essential term, it is not uncertain nor is it incomplete because on the application of the objective test of a reasonable bystander, the term would be construed to mean that whatever assets they own jointly when the marriage breaks down are to be divided equally whether in specie or upon sale;
c)At the time of making the agreement the parties could not possibly have known what assets they may own at the relevant time and therefore it could not be said that the failure to allocate a mechanism for implementing the essential term of equally dividing the joint assets would have caused the husband or the wife to have refused to have entered into the deed because at that time they could not have known what mechanism would have been appropriate e.g. it was argued on behalf of the wife that the agreement should have stated who was to retain which asset or class of asset – in my view, such a suggestion would prove an impossible task when the nature and value of assets in the future could not be known at the time of entering into the agreement;
d)The fact that the essential term may produce in its application more than one result e.g. an equal division in specie of the joint assets or a sale of all property and equal division of the net proceeds of sale or a combination of the two, does not render the term uncertain;
e)The deed itself by clause 1.2.5 evinces an intention for the deed to be construed so as not to be invalid or unenforceable;
f)In determining the question whether a financial agreement is valid, enforceable or effective s 90KA empowers the Court to apply the principles of law and equity that are applicable in determining the validity, enforceability and effect of contracts and purported contracts. Section 90G(2) empowers the Court to make such orders for enforcement … as it thinks necessary and a sale or division in specie are, in my view, ‘such orders’;
g)The description of “[Mr Garvey] assets” and “[Ms Jess] assets” and “joint assets” are defined in the deed and no evidence was presented nor submission made to support the contention that ‘those definitions do not allow the Court to determine with certainty which assets form part of each class of asset’;
h)The relevant date for the purposes of the deed is the breakdown of the marriage as evidenced by the separation notice provided for in clause 4.1 subject to any necessary adjustments consequent upon a breach of clause 4.2;
i)The deed specifically reserves the right of either party to make a claim for spousal maintenance in the event that children are born to the relationship;
j)While I do not find there is any ambiguity created by paragraphs 11, 12, and 13 of the husband’s affidavit filed 11 March 2016, if I am wrong, it matters not because ss 90B and 71A envisage that not all property may be dealt with in a financial agreement;
k)What each party contends by way of implementation is a matter to be determined by the Court at a subsequent hearing and while an order might require one party to transfer to the other his or her interests in a particular asset and thereby affect the substantive rights of that party, it is that which is envisaged in the deed itself viz a division of assets equally.
If I am wrong that the deed as it stands is not void for uncertainty, then, in my view, it would be open to imply a term into the agreement to provide what is submitted to be necessary to provide that certainty.
The Queensland Court of Appeal in Interlink Australia Pty Ltd v Gwendoline Elva Lowe[2] per Dalton J recently provided an overview of the relevant principles relating to implying terms into contracts:
[47] There is a very helpful discussion of implied terms in The Interpretation of Contracts in Australia. The implied term found by the learned primary judge, and contended for by the plaintiff below, was a term “based on an intention imputed to the parties from their actual circumstances”. Of such a term Gaudron and McHugh JJ said this in Breen v Williams:
“A term implied in fact purports to give effect to the presumed intention of the parties to the contract in respect of a matter that they have not mentioned but on which presumably they would have agreed should be part of the contract.”
[48] This type of implied term was described by Mason J in Codelfa Construction Pty Ltd v State Rail Authority of New South Wales:
“... with implication the term is one which it is presumed that the parties would have agreed upon had they turned their minds to it – it is not a term that they have actually agreed upon. Thus, in the case of the implied term the deficiency in the expression of the consensual agreement is caused by the failure of the parties to direct their minds to a particular eventuality and to make explicit provision for it.”
[57] The Courts are slow to imply a term. In Australia there are two authoritative statements in the High Court as to when sufficient will be shown to imply a term. One is Codelfa (above) and the other is BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 180 CLR 266, 283 In the latter case, Lord Simon of Glaisdale in the Privy Council said:
“... for a term to be implied, the following conditions (which may overlap) must be satisfied: (1) it must be reasonable and equitable; (2) it must be necessary to give business efficacy to the contract, so that no term will be implied if the contract is effective without it; (3) it must be so obvious that ‘it goes without saying’; (4) it must be capable of clear expression; (5) it must not contradict any express term of the contract.”
This statement of principle was adopted in Codelfa (see Mason J at p 347 and Brennan J at p 404)
[footnotes omitted]
[2] [2015] QCA 211.
Applying the principles identified above, the term I would imply is to the effect that the parties will do all things necessary to give effect to the terms of the deed and in the event of dispute, a court may determine the method of implementing the terms of the deed. Such a term would be reasonable, would give business efficacy to the deed, “goes without saying”, is capable of clear expression and does not contradict any express term of the deed.
For the reasons outlined I propose to dismiss the wife’s Response to the Application in a Case in which she seeks to dismiss the husband’s Application for Enforcement.
I certify that the preceding forty-five (45) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Carew delivered on 7 June 2016.
Associate:
Date: 7 June 2016
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