Greetham & Greetham

Case •

[2010] FamCA 246

•

29 January 2010

FAMILY COURT OF AUSTRALIA

GREETHAM & GREETHAM [2010] FamCA 246

FAMILY LAW – PRACTICE AND PROCEDURE – property settlement – where property settlement orders were previously made by consent between the parties prior to the commencement of the Family Law Legislation Amendment (Superannuation) Act 2001 (Cth) which introduced Part VIIIB of the Family Law Act 1975 (Cth) – where the parties could not consent to the setting aside of the order and take advantage of the provisions of Part VIIIB of the Act – application by the wife seeking to have the order set aside – whether the Court had the power to make the order – whether the order is ultra vires and invalid and therefore constitutes a miscarriage of justice – held orders within power and valid

FAMILY LAW – PRACTICE AND PROCEDURE – application by the wife seeking that the previous orders be set aside pursuant to s 79A(1)(a) or alternatively s 79A(1)(b) – no basis for a finding of a miscarriage of justice pursuant to s 79A(1)(a) – not impracticable for the order to be carried out

FAMILY LAW – PRACTICE AND PROCEDURE – REVIEW – where the wife sought in the alternative that the Court grant an extension of time to review the Registrar’s orders – whether the wife can seek a review of the Registrar’s orders in this case – whether the provisions of Part VIIIB can be applied to the hearing of the review – consideration of the provisions of the Family Law Legislation Amendment (Superannuation) Act 2001 – open to the wife to apply for a review of the Registrar’s decision

FAMILY LAW – PRACTICE AND PROCEDURE – whether an extension of time should be granted to the wife to seek review of the Registrar’s decision – where the husband consents to the extension – extension of time granted

FAMILY LAW – PRACTICE AND PROCEDURE – REVIEW – Registrar’s decision – where the husband consents to the discharge of the previous order and the substitution of a new order – where the effect of the order is to bring forward the time the wife can receive her entitlement – orders made in terms sought
Family Law Act 1975 (Cth) ss 37A(9), 79, 79A(1)(a), 79A(1)(b), 79A(1A) & 90MT
Family Law Legislation Amendment (Superannuation) Act 2001 (Cth) s 5
Acts Interpretation Act 1901(Cth) s 15AA(1)
Family Law Rules 2004 (Cth) r 18.08 & r 18.10
Barker and Barker (2007) Fam LR 650
Gallo v Dawson (1990) 93 ALR 479
Hackett and Hackett [2007] FamCA 1618
Harris v Caladine (1991) FLC 92-217
Harrison and Harrison (1996) FLC 92-682
In the marriage ofMcMahon (1976) FLC 90-038
In the marriage ofTormsen (1993) FLC 93-392
Lehear and Lehear [2009] FamCA 645
M v M (2006) 37 FamLR 150
Molier and Van Wyk (1980) FLC 90-911
Mullane v Mullane [1983] HCA 4
RBH and JIH [2005] FamCA 226
Rohde and Rohde (1984) FLC 91-592
Sanders (1993) FLC 92-426
S and S [2007] FamCA 973
West and Green (1993) FLC 92-395
APPLICANT: Ms Greetham
RESPONDENT: Mr Greetham
FILE NUMBER: ADC 1647 of 2009
DATE DELIVERED: 29 January 2010
PLACE DELIVERED: Adelaide
PLACE HEARD: Adelaide
JUDGMENT OF: Strickland J
HEARING DATE: 29 January 2010

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Hemsley
SOLICITOR FOR THE APPLICANT: Boltons Lawyers
SOLICITOR FOR THE RESPONDENT: No appearance

Orders

UPON NOTING

  1. That the value of the transferable benefit from the husband’s interest to the wife’s interest is calculated in accordance with Rule 7A.12 of the Superannuation Industry (Supervision) Regulations 1994.

  2. That pursuant to Rule 14F of the Family Law (Superannuation) Regulations 2001, any payments from the husband’s superannuation in the SAS Trustee Corporation made after the trustee has created a new interest in the wife’s name in SAS Trustee Corporation as contemplated in this order are not splittable payments.

  3. That the Trustee will be relieved of its obligations to calculate and split payments under this order in the event that the transferable benefits are transferred to a fund of the wife’s choosing in accordance with the requirements under the Superannuation Industry (Supervision) Regulations 1994.

IT IS ORDERED

  1. That the time for the wife to file an application seeking a review of the exercise of power by a Registrar on 2 January 1998 be extended to 10 December 2009.

  2. That the order made by the Registrar on 2 January 1998 be set aside and in lieu thereof the following orders be made:

    (a)A base amount of THREE HUNDRED AND FOURTEEN THOUSAND ONE HUNDRED AND FORTY FIVE DOLLARS AND FIFTEEN CENTS [$314,145.15] is allocated as required by s 90MT(4) of the Family Law Act 1975 to the wife from the husband’s interest in his SAS Trustee Corporation Member no. 617867 entitlements.

    (b)In accordance with s 90MT(1)(a) of the Family Law Act 1975:

    (i) the wife is entitled to be paid the amount calculated in accordance with Part 6 of the Family Law (Superannuation) Regulations 2001; and

    (ii)   the husband’s entitlement and the entitlement of such other person to whom a splittable amount may be made to payment out of the husband’s interest in SAS Trustee Corporation is correspondingly reduced; and

    (iii)     the trustee of the SAS Trustee Corporation shall do all such acts and things and sign all such documents as may be necessary to:

    a. calculate in accordance with the requirements of the Family Law Act 1975 and the Family Law (Superannuation) Regulations 2001 the entitlement for the wife created by clause 2(b) above of this order; and

    b.   pay the entitlement whenever the trustee makes a suitable payment out of the husband’s interest in the SAS Trustee Corporation.

    (c)This order will have effect from the operative time and the operative time is the beginning of the fourth day on which a sealed copy of these orders is served upon the Trustee of SAS Trustee Corporation.

    (d)After service of the payment split notice pursuant to Rule 8A.03 of the Superannuation Industry (Supervision) Regulations 1994, the wife shall do all such things and sign all such documents as may be necessary, including but not limited to exercising her request to Rule 7A.06(1) of the Superannuation Industry (Superannuation) Regulations 1994, for the rollover or transfer the transferable benefit out of the husband’s interest in the SAS Trustee Corporation to a fund of her choosing in accordance with Rule 7A.12 of the Superannuation Industry (Supervision) Regulations 1994, at the cost of the wife.

  3. That all applications be dismissed and removed from the active pending cases list.

IT IS NOTED that publication of this judgment under the pseudonym Greetham & Greetham is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth)

FAMILY COURT OF AUSTRALIA AT ADELAIDE

FILE NUMBER: ADC 1647 of 2009

MS GREETHAM

Applicant

And

MR GREETHAM

Respondent

REASONS FOR JUDGMENT

Introduction

  1. I have before me an initiating application filed by the wife on 10 December 2009 in which she seeks the following orders:

    “1. That pursuant to the provisions of Section 79A(1)(a) of the Family Law Act, that paragraphs 1(a)(i) and (ii) of the orders for property settlement made in this matter on the 2nd day of January 1998 be discharged.

    2.    In the alternative, that this Honourable Court do:-

    (a)extend the time for the wife to appeal against the decision of the Registrar made on 2nd day of January 1998 wherein the Registrar made the orders for property settlement referred to herein;

    (b)set aside the orders made by the Registrar on the 2nd day of January 1998 as ultra vires and in excess of the powers of the Registrar.

    3.    That in place of paragraphs 1 (a)(i) and (ii) the Orders made on the 2nd January [sic] this Honourable Court do make orders in the following terms:-

    (a)That a base amount of THREE HUNDRED AND FOURTEEN THOUSAND ONE HUNDRED AND FORTY FIVE DOLLARS AND FIFTEEN CENTS ($314,145.15) is allocated as required by Section 90MT(4) of the Family Law Act, to the wife from the husband’s interest in his SAS Trustee Corporation Member Number […] entitlements.

    (b)That in accordance with Section 90MT (1)(a) of the Family Law Act 1975:-

    (i)The wife is entitled to be paid the amount calculated in accordance with Part 6 of the Family Law (superannuation) [sic] Regulations 2001; and

    (ii)The husband’s entitlement and the entitlement of such other person to whom a splittable amount may be made to payment of the husband’s interest in SA [sic] Trustee Corporation is correspondingly reduced.

    (iii)That the trustee of the SAS Trustee Corporation shall do all such acts and things and sign all such documents as may be necessary to:

    (a)Calculate in accordance with the requirements of the Family Law Act 1975 and the Family Law (Superannuation) Regulation 2001 the entitlement for the wife created by clause (b) above of this order; and

    (b)Pay the entitlement whenever the trustee makes a suitable payment out of the husband’s interest in the SAS Trustee Corporation.

    (c)That this order have effect from the operative time and the operative time is the beginning of the fourth day on which a sealed copy of these orders were served upon a Trustee of SAS Trustee Corporation.

    (d)That after service of the payment split notice pursuant to Rule 8A.03 of the Superannuation Industry (Supervision) Regulations 1994, the wife shall do all such things and sign all such documents as may be necessary, including but not limited to exercising her request to Rule 7A.06(1) of the Superannuation Industry (Superannuation) Regulation 1994, for the rollover or transfer the transferable benefit out of the husband’s interest in the SAS Trustee Corporation to a fund of her choosing in accordance with Rule 7A.12 of the Superannuation Industry (Supervision) Regulations 1994, at the cost of the wife;

    (e)That the Court note:

    i.The value of the transferable benefit from the husband’s interest to the wife’s interest calculated in accordance with Rule 7A.12 of the Superannuation Industry (Supervision) Regulations 1994.

    ii.Pursuant to Rule 14F of the Family Law (Superannuation) Regulation 2001, any payments from the husband’s superannuation in the SAS Trustee Corporation made after the trustee has created a new interest in the wife’s name in SAS Trustee Corporation as contemplated in this Order are not splittable payments.

    iii.That Trustee will be relieved of its obligations to calculate and split payments under this Order in the event that the transferable benefits are transferred to a fund of the wife’s choosing in accordance with the requirements under the Superannuation Industry (Supervision) Regulations 1994.

    4.    Such further or other Orders as this Honourable Court deems fair and reasonable.”

  2. In summary the wife is seeking to discharge orders made on 2 January 1998 pursuant to s 79A(1)(a) of the Act or in the alternative to extend the time for a review of the Registrar’s exercise of power and set aside those orders and substitute further orders.  Now, the orders made on 2 January 1998 were property settlement orders made by a Registrar by consent prior to the commencement of the Family Law Legislation Amendment (Superannuation) Act 2001 (Cth) which introduced Part VIIB of the Family Law Act 1975 (Cth) dealing with superannuation. The consent orders made in 1998 between the parties were solely in respect to the husband’s superannuation interest and any redundancy payment including his leave entitlements.

  3. The consent orders made on 2 January 1998 provided as follows:

    “1. That in full and final settlement of any claim by either party against the other under Part VIII of the Family Law Act for property settlement:

    [a]the Husband shall forthwith do all things and execute all documents necessary to ensure that in the event of the termination of his employment with the New South Wales [Emergency Services], whether by way of his redundancy, retirement, invalidity, resignation or death the Wife shall be entitled to receive a sum calculated in accordance with the following formula:

    A x B x 0.5

    C

    where:

    A = the lump sum net of taxation payable to the Husband:

    [i]upon the termination of his employment as outlined above by way of redundancy payment [including, if any, accrued Long Service Leave, Sick Leave and Holiday Pay]; and

    [ii]as a lump sum upon the termination of his employment as outlined above by virtue of his being a member of the [Emergency Services] Superannuation Scheme:

    B = 16.5 [calculated to the nearest six months]

    C = years elapsed [calculated to nearest six months] between 15th May, 1978 and the date the Husband resigns, is retrenched or invalided or retires.

    [b]the Husband shall within twenty eight days of the date hereof provide a sealed copy of this Order to the Trustees of the State Superannuation Investment and Management Corporation [New South Wales].

    [c]the Husband be and is hereby restrained from dealing with or disposing of any of his entitlements to redundancy pay or superannuation as a member of the State Superannuation Investment and Management Corporation [New South Wales] other than in accordance with these Orders.

    2.Liberty to apply for further or consequential Orders.”

  4. In summary those orders provided a formula for calculating the amount of money that the wife is to receive upon the happening of certain events, particularly the husband’s termination of his employment and his receipt or his entitlement to receive a lump sum payment by way of redundancy and/or superannuation. 

  5. The husband has not filed a Response to the Initiating Application filed by the wife, but his position is set out in an affidavit filed on 22 January 2010.  What happened was an affidavit was forwarded to the husband for him to execute.  Unfortunately he only executed the second page and he swore that before a Justice of the Peace. Neither he nor the Justice of the Peace signed the front page and that affidavit was returned in that state.  There was not enough time between the receipt of that affidavit and the hearing of this matter on 25 January 2010 for the affidavit to be sent back to the husband for him to attend to that omission.

  6. However, I am not fussed about that.  It was quite apparent that he has sworn this affidavit before a Justice of the Peace, and I will treat that as before me.  The summary of his affidavit is that he initially was and has continued to be comfortable to consent to the orders sought by the wife, and indeed, when this matter commenced in this court on 1 May 2009 with an application for consent orders, that application was executed by both parties, including obviously the respondent. 

  7. This affidavit though, goes further, given the subsequent events and the subsequent initiating application that has been filed. In the affidavit the husband consents to, if necessary, an extension of time to enable this Court to review the decision of the Registrar, which comprises, of course, the orders made on 2 January 1998.  There is also a catch all in the affidavit, in that the husband says that he is happy for the amended orders to be made, and he supports any steps that need to be taken by the wife to achieve that outcome. 

Background

  1. The wife was born in 1949 and is now 60 years. 

  2. The husband was born in 1959 and is now aged 50 years.

  3. The parties married in 1980, they separated on 19 October 1995, and their divorce became final on 3 February 1998. 

  4. The husband became bankrupt in August 1996. 

  5. On 2 January 1998 final property settlement orders were made by consent between the husband and the wife in the terms that I have already set out in these reasons. 

  6. On 7 February 2003, the husband retired under medical discharge from the New South Wales Emergency Services, then aged 43 years.  The husband received a basic benefit payment of $23,462.23.  Pursuant to the formula provided by the consent order, the wife received $7742.57 by way of a payment from the husband. 

  7. On 6 June 2003, the husband made a statutory declaration.  In that statutory declaration, he, in effect, confirmed that when he receives a lump sum payment upon his ultimate retirement, there is in existence a court order, namely the order of 2 January 1998, which sets out a formula to be applied to that lump sum payment.  He confirmed that that would result in a further payment to the wife in accordance with that formula.  He recorded that he had prepared a Will which contained instructions to ensure that even after his death the wife receives the amount to which she is entitled pursuant to the order, and finally he set out that his current wife, or then current wife had agreed to comply with the declaration in the context of his last Will and Testament. 

  8. On 1 May 2009 the wife filed an Application for Consent Orders and a supporting affidavit in this Court.  The proposed minute of consent order provided that the previous order made by consent on 2 January 1998 be varied to “exclude” paragraphs 1[a][i] and [ii], and to insert a splitting order pursuant to s 90MT of the Family Law Act 1975.  The supporting affidavit annexed a letter from the trustees of the relevant superannuation fund, advising that apart from a correction to the name of the trustee of the fund, there was no objection to the proposed orders. 

  9. Registrar Paxton, however, correctly refused to make the orders by consent, and requisitioned the application on the basis that as there was a s 79 order in place prior to the start-up time of the superannuation amendments the parties could not now take advantage of the provisions of Part VIIIB of the Act by consent. Registrar Paxton advised that the transitional provisions to the amendments exclude reliance on s 79A(1A) of the Act, but that in other matters attempts have been made to rely on other s 79A grounds to have the previous orders set aside in such circumstances.  

  10. On 18 August 2009, the wife filed an affidavit in which she sought leave for her application filed on 1 May 2009 to be considered by a Judge, in particular with respect to whether the Court would exercise its discretion to vary or alter the final orders pursuant to s 79A(1)(b), or in the alternative, pursuant to s 79A(1)(a) of the Act. 

  11. The matter came before Burr J on 23 October 2009.  On this occasion, counsel for the wife sought an adjournment to seek further information from the superannuation fund and to further prepare the matter. The husband attended the hearing by telephone, and advised the Court that he consented to the orders being made in the terms sought by the wife. Burr J excused the husband from attending on the next occasion due to his work commitments. 

  12. As previously mentioned, the wife filed her Initiating Application on 10 December 2009, and that was after the matter first came before me on 25 November 2009.  On 14 December 2009, I heard submissions from counsel on behalf of the wife and reserved my judgment. 

The applicable law

Superannuation

  1. The Family Law Legislation Amendment Superannuation Act 2001 (Cth) commenced on 28 December 2002. Pursuant to s 5 of that Act, the provisions of Part VIIIB of the Act do not apply if a s 79 order is in force prior to the start up time. Section 5 is as follows:

5      Application of superannuation amendments

(1)    Subject to this section, the superannuation amendments apply to all marriages, including those that were dissolved before the startup time.

(2) Subject to subsections (3) and (4), the superannuation amendments do not apply to a marriage if a section 79 order, or a section 87 agreement, is in force in relation to the marriage at the startup time.

(3) If a section 79 order that is in force at the startup time is later set aside under paragraph 79A(1)(a), (b), (c) or (d) of the Family Law Act, then the superannuation amendments apply to the marriage from the time the order is set aside.

(4) If an approval of a section 87 agreement that is in force at the startup time is later revoked on a ground specified in paragraph 87(8)(a), (c) or (d) of the Family Law Act, then the superannuation amendments apply to the marriage from the time the approval is revoked.

(5) Part VIIIB of the Family Law Act does not apply in relation to a financial agreement that was made before the startup time.

  1. Section 79A(1A) is not included in the list of exceptions. The Revised Explanatory Memorandum which accompanied the amending legislation explains that it was intended that parties were not to be able to take advantage of the amendments by setting aside a previous order by consent:

    9. Clause 5 of the Superannuation Bill will provide for the application of the superannuation amendments, as set out in Schedule 1. The policy intention is that the superannuation amendments will not apply if a property settlement, either by a court approved agreement, under section 87 of the Family Law Act, or a court order, under section 79 of the Family Law Act, has been finally concluded prior to the commencement of the superannuation amendments. However, if the court order or the court approval for the agreement is subsequently set aside after the commencement of the superannuation amendments, the superannuation amendments will apply because in such situations, the legal situation of the parties is as if the section 79 order had never been made or the section 87 agreement had never been approved. Therefore, the new regime about the division of superannuation interests should apply.

    …

    11.    Subclause 5(2) of the Superannuation Bill will provide for the exceptions to the general provision in subclause 5(1). Accordingly, subclause 5(2) will provide that the superannuation amendments will not apply to a marriage if:

    * a maintenance agreement, under section 87 of the Family Law Act, was approved before the startup time; or

    * an order for the settlement of property, under section 79 of the Family Law Act, was made before the startup time.

    12. Subclause 5(3) of the Superannuation Bill will provide that if a section 79 order, which is in force at the startup time, is later set aside then the superannuation amendments will apply.

    …

    14. However, the policy intention is that people who have had a property settlement will not be able to elect to take advantage of the new regime. Therefore, if:

    * a section 79 order is set aside with the consent of the parties, pursuant to subsection 79A (1A); or

    * the approval of a section 87 agreement is revoked because the parties to the agreement want it revoked, pursuant to paragraph 87(8)(b);

    the superannuation amendments will not apply.

Setting aside or varying property settlement orders

  1. Section 79A(1)(a) provides:

    79A  Setting aside of orders altering property interests

    (1) Where, on application by a person affected by an order made by a court under section 79 in property settlement proceedings, the court is satisfied that:

    (a)there has been a miscarriage of justice by reason of fraud, duress, suppression of evidence (including failure to disclose relevant information), the giving of false evidence or any other circumstance; or

    …

    the court may, in its discretion, vary the order or set the order aside and, if it considers appropriate, make another order under section 79 in substitution for the order so set aside.

Review of exercise of Registrar’s powers

  1. Section 37A(9) of the Family Law Act 1975 provides that a party to proceedings in which a Registrar has exercised the powers of the Court may within the time prescribed by the Rules or such further time as is allowed apply to the Court for a review of the exercise of power.

  2. Rule 18.08 of the Family Law Rules 2004 (Cth) sets out the time within which an application for review is to be made. Rule 1.14 provides that an extension of time may be sought.

  3. Rule 18.10 sets out the power of the Court on review, which is by way of a hearing de novo:

    Rule 18.10 Power of court on review

    (1)A court must hear an application for review of an order of a Judicial Registrar, Registrar or Deputy Registrar as an original hearing.

    Note In an original hearing, the court rehears the whole matter and does not simply review the decision of the original court.

    (2)The court may receive as evidence:

    (a)any affidavit or exhibit tendered in the first hearing;

    (b)any further affidavit or exhibit;

    (c)the transcript (if any) of the first hearing; or

    (d)if a transcript is not available, an affidavit about the evidence that was adduced at the first hearing, sworn by a person who was present at the first hearing.

Whether the Court had the power to make the order in this case

  1. The wife seeks, inter alia, to have the order of 2 January 1998 set aside pursuant to s 79A(1)(a) on the basis that the order is ultra vires and invalid and, therefore, there has been a miscarriage of justice. Counsel for the wife, Mr Hemsley, relied on a decision of Mullane J in Hackett and Hackett [2007] FamCA 1618. In Hackett, Mullane J determined that the orders made in that case with respect to an unvested superannuation interest were not valid as the Court did not, at the time, have power under s 79 to make orders altering interests in unvested superannuation entitlements.

  2. The relevant order in that case provided:

    “2.1That upon the respondent’s superannuation entitlements vesting being for retirement, resignation, death or permanent incapacity the applicant shall receive an entitlement from the same which said entitlement shall be calculated in accordance with the following formula;

    …”

  3. Mullane J found that there had been a miscarriage of justice within the expression, “or any other circumstance” in s 79A(1)(a) in the circumstances where the wife was not aware the orders would not be valid and the Judicial Registrar was not aware that the orders purported to give the wife an interest in the husband’s superannuation fund.

  4. His Honour concluded that the consent orders were thus not a, “proper use of the judicial procedure,” and constituted a miscarriage of justice.  His Honour was also satisfied that s 79A(1)(c) would be met in the circumstances of the case. 

  5. The first issue for my determination is thus whether the Court had the power in 1998, prior to the commencement of the Family Law Legislation Amendment (Superannuation) Act 2001 to make the orders in question. However, in my view it is not a question of a miscarriage of justice. If the Court did not have the necessary power, the orders would be void ab initio regardless of whether s 79A(1)(a) applies or not. Prior to the introduction of the superannuation amendments the Court could not make orders directly altering a party’s superannuation interests unless the interest was vested. The Court therefore adopted a number of different approaches to dealing with superannuation interests including making an order, the operation of which was deferred until superannuation entitlements vested. Orders of the kind in question here providing for the non-contributing spouse to receive an entitlement upon the superannuation interest vesting in the future were also not uncommon.

  6. In Hackett though Mullane J considered that the order in its terms provided for the wife to have an interest in the superannuation which this Court did not have the power to do at the time.  Mullane J distinguished the case and the orders from the celebrated decision of West and Green (1993) FLC 92-395. In West and Green the parties proposed that Kay J make orders which would fix the wife’s entitlement to the husband’s superannuation when it came to fruition.  It was also common ground that his Honour should apply a formula. A similar formula was adopted in both Hackett and the present case. 

  7. Mullane J distinguished the matter before him from the decision of West and Green on the basis that in that case the orders did not purport to give the wife an interest in the superannuation as there was other property that the husband had from which he could pay to the wife at the time the orders were made.  However, the order that was made in West and Green was in fact for the husband to make a payment to the wife in accordance with the formula, and I highlight this, “upon receipt” of his benefit.  The only distinguishing feature is that the order in West and Green did not refer to the wife receiving an “entitlement” but rather the wife was to be paid a sum of money.  The order made in West and Green provided:

    “11)That upon the husband's resignation or retirement from his employment with the SEC, he is to forthwith pay to the wife the sum calculated in accordance with the following formula:

    …”

  8. In my view, the basis upon which Mullane J distinguished the decision from that of West and Green could not be maintained.  The decision of West and Green has been criticised in subsequent decisions of the Full Court in the context of the problems associated with adopting an arithmetical or mathematical approach to superannuation interests, and I refer, for example, to Harrison and Harrison (1996) FLC 92-682 at 83-084, where the Full Court said:

    “It must first be said that in most cases a spouse's entitlement to superannuation is not property and therefore is not capable of any order under the provisions of s 79. See Crapp and Crapp (1979) FLC 90-615, Coulter and Coulter (1990) FLC 92-104 and Mitchell and Mitchell (1995) FLC 92-601. The various attempts which trial Judges, in their ingenuity, have made to take superannuation entitlements into account by reference to precise mathematical calculations, although perhaps desirable from a practical point of view, nevertheless do not enable or entitle them to include such sums as part of the property of the parties, however calculated.

    It follows from what we have said that in most cases the proper approach to be taken by trial judges, when dealing with a party's entitlement to superannuation in proceedings for alteration of property interests pursuant to the provisions of s 79 of the Family Law Act, is to adjourn the proceedings under s 79(5) with or without the making of any order under s 79(6) or, in the alternative, to treat the superannuation entitlement as a resource, pursuant to the provisions of s 75(2)(f) or (j).”

  9. Subsequent authority has therefore suggested that the preferred approach is to adjourn the matter or to treat the superannuation as a financial consideration in the context of the s 75(2) factors. However, no case has held that making an order with respect to superannuation interests that would operate in the future was outside and I emphasise that word, the power of the Court pursuant to s 79.

  10. In M v M (2006) 37 FamLR 150 the Full Court commented with respect to the West and Green approach as follows:

    “112.In In the Marriage of West & Green (1991) 16 Fam LR 811 ; (1993) FLC 92-395 the formula came into being, not as a means of assessing contributions to the date of hearing, but to allow for an order which would take effect in the future (upon the husband’s retirement). It was intended to reflect that future contributions to the fund would come from the husband, after a property division had been effected between the parties and with no conceivable contribution by the wife in the future. In particular Kay J said (at Fam LR 816; FLC 80,038):

    As the final payout figure will not be determined until such time as the husband retires from employment, and as the duration of the marriage compared to the duration of the years that the husband has been in the scheme will also not be determined until that time, it is appropriate in my view to create a formula which will clearly indicate precisely what the wife is to receive when the husband elects to collect his superannuation.

    113.Prior to the introduction of Part VIIIB into the Act, it appears to have been common amongst some lawyers to use that formula to quantify the “value” of superannuation and to include the figure so arrived at, in the pool, as if it were property of the parties. In our view the ratio of West & Green was of narrow compass and may have been accorded an interpretation it did not warrant. Be that as it may, this formulaic approach has been criticised in a number of cases.”

    [Emphasis added]

  11. The Full Court did not express in that case that there is an issue per se with making an order with respect to superannuation interests which would operate in the future. 

  12. With respect to Mullane J, in my view, the orders his Honour was dealing with did not purport to alter the interests in the fund but rather provided the wife with an entitlement upon the superannuation vesting. 

  13. With the orders in this case they were clearly to operate in the future, once the husband became entitled to receive his superannuation.  They did not provide the wife with any interest in the unvested superannuation fund, but rather provided the wife with an entitlement upon the occurrence of one of the future events specified in the order. 

  14. If terminology is important, I also note that unlike the order in Hackett, the order in this case did not provide that the wife “shall receive an entitlement from the” husband’s superannuation but rather provided that the wife “shall be entitled to receive a sum.” In other words, not even providing for the wife to receive an entitlement to the husband’s superannuation when it vests in the future. 

  15. Accordingly, I find that the orders in this case were within power and valid.

Section 79A(1) of the Family Law Act 1975

  1. In the initiating application filed by the wife she sought “that paragraphs 1[a][i] and [ii] of the orders for property settlement made in this matter on 2 January 1998 be discharged” pursuant to s 79A(1)(a) of the Act.  In submissions, the basis for this application was the claim that the order was invalid.  Now, I have found otherwise but that does not exclude other bases for a finding of a miscarriage of justice.  In that regard I note that paragraph 19 of the wife’s affidavit filed on 18 August 2009 the wife said this: 

    “In the alternative, I ask the Court to exercise its discretion under s 79A(1)(a) to vary the final orders made on 2 January 1998 on the grounds that ‘there has been miscarriage of justice by reason of fraud, duress, suppression of evidence (including failure to disclose relevant information), the giving of false evidence or any other circumstance.’ While I do not claim that there has been fraud or wrong doing of any kind, I say that the confluence of circumstances including the husband’s bankruptcy, the disparity in the husband’s and my respective ages, my difficulty in obtaining employment, the change in the minimum age at which superannuation can be accessed, and the poverty in which I now live have resulted in a miscarriage of justice caused by ‘any other circumstance’.”

  2. Although the wife did not pursue this at the hearing, I can say that there is no basis here for a finding of miscarriage of justice within the meaning of s 79A(1)(a).

  3. In Barker and Barker (2007) Fam LR 650, the Full Court (Bryant CJ, May and Boland JJ) summarised the authorities with respect to the meaning of “miscarriage of justice “ in the context of s 79A as follows:

    “120.A miscarriage of justice under s 79A(1)(a) will occur if circumstances exist which “for some significant reason, make the order contrary to law and justice according to law as it relates to the integrity of the judicial process [original emphasis]” (Bigg v Suzi (supra) at 84,982). See also Suiker (supra); Public Trustee (as executor of the estate of Gilbert) v Gilbert (supra)). Whilst cases such as Suiker (supra), Holland v Holland (1982) FLC 91-243 and Gebert v Gebert (1990) FLC 92-137 indicate that the words “miscarriage of justice” should not be construed narrowly and the phrase “integrity of the judicial process” should not be taken only to refer to the hearing in the court, the circumstances creating the miscarriage must nevertheless have been such as to have had an influence on the outcome of the litigation. As the Full Court said in Holland (supra):

    To succeed in an application under sec. 79A, the wife must show some circumstance leading to a miscarriage of justice. Agreement to a consent order which may not adequately reflect a party’s entitlements under sec. 79 does not, of itself, show that there has been a miscarriage of justice. There may be cases where the order consented to is so far outside the ambit of what is just and equitable that the Court may infer that a party has acted under duress, in ignorance or as a result of incompetent advice.”

  4. Significantly, in the case of Molier and Van Wyk (1980) FLC 90-911, the Full Court found that a miscarriage of justice within the context of s 79A can only occur before or at the time of the making of the order, saying that the term “miscarriage of justice” “does not seem apt to apply to matters which arise after the order has been made.” Thus this would exclude consideration of the current circumstances of the wife, her difficulty in finding employment, and any change to the time when the husband’s superannuation can be accessed.

  5. That leaves the husband’s bankruptcy, but that occurred approximately two years before the consent order and, in my view, can have no bearing upon it. Likewise with the disparity in ages of the husband and the wife, that has nothing to do with the judicial process. 

  6. In paragraph 18 of the affidavit of the wife filed on 18 August 2009 the wife also raised the applicability of s 79A(1)(b) and she deposed as follows:

    “…I seek leave for this application to be considered by a judge and in particular to consider whether the Court may exercise it’s discretion to vary or alter final orders under s 79A(1)(b) of the Family Law Act, that is, that “in the circumstances that have arisen since the order was made, it is impracticable for the order to be made, or for a part of the order to be carried out”. At the time the orders were made I believed that the husband’s superannuation would be released in around 2009. I did not foresee that the law would change to extend the compulsory preservation age.”

  7. Again, the wife did not pursue this at the hearing before me, but in any event I do not consider that this sub-paragraph applies.  It is not “impracticable” for the order to be made or carried out.  It has simply turned out that the wife apparently cannot access her entitlement as early as she anticipated and I quote from the decision in Rohde and Rohde (1984) FLC 91-592 as follows:

    “In considering the terms of sec. 79A(1)(b), so far as it is necessary to consider them for the purposes of their application for the present case, I would make the following observations:

    (a)     It is not enough that circumstances have arisen since the order was made which make it unjust for the order or part of the order to be carried out; the onus is upon the applicant to establish to the reasonable satisfaction of the Court, that in the circumstances that have arisen since …it is impracticable for the order or part of the order to be carried out.

    (b)    The word “impracticable”' means, gleaning a definition from the Shorter Oxford Dictionary, “not practicable”; “that cannot be carried out or done”; “practically impossible”; “unmanageable”; “intractable”.

    (c) ‘“Impracticability” is a conception different from that of “impossibility”; the latter is absolute, the former introduces at all events some degree of reason and involves some regard for practice’ (per Veale J. in Jayne v. National Coal Board (1963) 2 All E.R. 220).

    (d)    Provided that more than one circumstance exists, and that the circumstances have arisen since … it does not matter what the circumstances are or by whom they are brought about.”

Whether the wife can seek a review of the Registrar’s order

  1. In the alternative to the application under s 79A(1)(a), the wife seeks that the Court grant an extension of time to review the Registrar’s orders. That is not though how it was expressed precisely in the orders sought in the application. The order sought was to extend the time for the wife to appeal against the decision of the Registrar, and the application then goes on and seeks an order setting aside the orders made by the Registrar as ultra vires and in excess of the powers of the Registrar. That, unfortunately, does not indicate an appreciation of what a review in this Court entails but, in any event, I treat that application as being an application for an extension of time to seek a review of the decision of the Registrar and in the context of the review, seeking an order setting aside the orders and, in lieu, making orders in terms of paragraph 3 of the Initiating Application, namely, a splitting order pursuant to s 90MT of the Family Law Act 1975. However, that would not be on the basis of any findings that the orders made by the Registrar and, to use the words in the application, were ultra vires and in excess of the powers of the Registrar.  I suspect that was drafted when the issue of the validity of the orders made was alive.  I, of course, have found otherwise but as I will explain in a moment there is no need to go to that extent to succeed on a review of an exercise of powers by a Registrar. 

  1. The principles with respect to the grant of an extension of time, are well settled (see Gallo v Dawson (1990) 93 ALR 479, In the marriage ofMcMahon (1976) FLC 90-038 and In the marriage ofTormsen (1993) FLC 93-392). Gallo v Dawson is, of course, a High Court decision, and McMahon and Tormsen are two Full Court decisions of this Court. 

  2. The authorities mainly address extensions of time in the context of appeals.  However, the principles are also largely applicable to applications for an extension of time to seek a review of the exercise of Registrar’s powers.  In Tormsen (supra) the Full Court said at 80,017 that:

    “[t]he fundamental issue in application for extension of periods of time prescribed by rules of court is whether this will enable the court to do justice between the parties …[and that a] failure to explain the delay adequately can certainly lead to a conclusion that justice demands that the application be dismissed.” 

    However, the Full Court did indicate that:

    “…in appropriate cases the interests of justice may outweigh the absence of an adequate explanation.”

  3. In the case of Sanders (1993) FLC 92-426, which involved an application for an extension of time to review a Registrar’s decision, Purvis J said at 80,371:

    “The extension of the time for review thus may be made by the Court on such terms as the Court thinks fit. The exercise of this discretion, however, is not at large and the principles to be applied are those akin to an application made pursuant to section 44(3) of the Family Law Act…

    …

    Translating the principles that emerge from these two cases into those that are pertinent to the present application, the Court is required to look firstly at the explanation of delay, secondly whether there are substantial issues to be tried in the event of the time being extended and the matter proceeding to a hearing and thus whether, prima facie, orders significantly different to those in the terms of agreement may be made. Thirdly, whether non-compensable hardship or prejudice would be suffered to the respondent by reason of leave being granted and the delay in the matter being finally heard and determined.”

    In this case given the husband’s position to date it could be expected that the husband would consent to an extension of time being granted.

  4. It is quite apparent that the principal issue for determination in an application for an extension of time is the issue of justice between the parties. 

  5. An extension of time to review orders of a Registrar with respect to superannuation entitlements made prior to the commencement of Part VIIIB has been considered by this Court in RBH and JIH [2005] FamCA 226 and most recently, Lehear and Lehear [2009] FamCA 645.

  6. In RBH and JIH, Young J, having found that there was not a miscarriage of justice in the case, proceeded to hear an application made at the invitation of the Court for an extension of time to review a Deputy Registrar’s decision. It was submitted on behalf of the husband that the actions of the Deputy Registrar in making orders in chambers were inappropriate given the Deputy Registrar’s delegated powers at that time and given that the new legislation was not far from being enacted. The wife consented to the application for an extension of time and his Honour granted the extension of time. His Honour was only invited to review that order with respect to the superannuation interests and was not asked to reopen the entirety of the s 79 proceedings.

  7. His Honour said, at paragraphs 43 and 44:

    “43.  The property orders which the parties agreed to in 1999 and which are the subject of an order of the court cannot be completed.  In the current circumstances the trustee of ESSS will not, rightly, implement the orders that are beyond its jurisdiction and, on their face, are very difficult to understand.  The parties are effectively in somewhat of "a no-man's land".  There is no issue of delay.  The parties, or at least the husband either personally or through his current solicitor, has been endeavouring to negotiate an appropriate order or outcome with the trustee.  There is no hardship to the wife.  She desires to retain the benefit of her property judgment subject to the renegotiated superannuation splittable interest whereby she now receives $100,000 but with no interest arrears. 

    44. In the circumstances, bearing in mind that the parties and the court desire a just outcome, bearing in mind the main purpose of the Family Law Rules as provided for in Rule 1.04, and accepting of the need to vary the order by way of rehearing, in all of the facts and circumstances relevant to that consideration I propose to exercise my powers of review and to set aside paragraph 6 of the orders of the court made 2 February 2000 and to substitute therefore orders which have been negotiated and fine-tuned between the parties and which this day are said to be appropriate, just and equitable.”

  8. Next, in S and S [2007] FamCA 973 Benjamin J also had before him an “essentially” joint application for an extension of time to seek a review and then to set aside an order with respect to superannuation. The order in question was:

    “That the husband and wife have liberty to apply in relation to the division of superannuation held in the husband's name for the wife to receive a set amount of $10,000 in superannuation.”

  9. Benjamin J referred to the decision of Young J in RBH and JIH at great length and adopted his Honour’s reasoning granting an extension of time, setting aside the order and making a splitting order pursuant to s 90MT. 

  10. Now, those decisions are to be contrasted with the approach taken by Cronin J in the recent decision of Lehear where his Honour refused to grant an extension of time to review the Registrar’s orders, finding that the rules cannot be used to circumvent the clear intentions of Parliament, namely that the provisions with respect to superannuation are not to apply where orders have already been made pursuant to s 79 prior to the start up time. Final orders had been made by consent by the Registrar in November 2001. The orders provided that when the husband became eligible to receive benefits from his superannuation fund he was to pay the wife a sum calculated by reference to a formula. In June 2009, the wife filed an application for consent orders supported by an affidavit filed by each party. The orders proposed by the orders were splitting orders. A Registrar, as in this matter, refused to make the order and referred the matter to the judicial duty list.

  11. At the hearing, counsel for the wife asked for leave to make an oral application to extend the time to review the orders, referring to the decision RBH and JIH.  Cronin J identified that the distinction with RBH and JIH was that in that case an application had been made pursuant to s 79A(1)(b) to set the orders aside. No such application had been made in the case at hand. Addressing the application to extend the time to seek a review, his Honour found that the Rules could not be used to circumvent the intentions of Parliament. His Honour said this:

    “23. …If it is suggested that by extending the time and exercising the power under Rule 18.10, a court is now invested with power to make orders pursuant to Part VIIIB of the Family Law Act, I reject that. That is because the parties are not seeking to have the Court exercise its powers generally under s 79 but rather, only the discrete issue in relation to superannuation because that power was not available in 2001. The parties themselves indicate that they do not want the Court to examine any of the financial circumstances outside of making the orders relating to superannuation. That flies in the face of the Court making an order which is just and equitable under s 79.

    24.    In addition, I have serious doubts about the appropriateness as I have already indicated, of endeavouring to circumvent the very clear legislation of 2001.”

    Referring to the provisions of s 5 of the Family Law Legislation Amendment (Superannuation) Act 2001, his Honour found that although the parties indicated they consented to the variation of the orders, the only way they could do so was by s 79A(1A) which is expressly excluded. His Honour concluded:

    “28. It is not appropriate for a court to endeavour to find a way around specific prohibitions in legislation. It was quite clear that parliament intended to exclude parties who had made final orders under s 79. Specific provision was made for the miscarriage of justice or impracticability provisions none of which apply here.

    29. The power to make orders under s 79 in this case is exhausted. There is no basis for the Court to make the orders sought by the parties.”

    Thus his Honour dismissed the application.

Whether a review of the exercise of power by the Registrar is available in this case

  1. To succeed, the wife needs an extension of time to bring the review application, and then for the Court to discharge the order and substitute a new order.  Although there is authority which has provided that such an extension of time may be granted in these circumstances, in the recent decision of Lehear and Lehear, Cronin J concluded that an extension of time could not be granted which would circumvent the legislation. 

  2. As outlined above, the availability of a review of the exercise of power by a Registrar is provided by statute.  There are no conditions that need to be met in order to have an exercise of power reviewed.  For example, it does not need to be shown that there was an error on the part of the Registrar, provided that such application is brought within the required time limit specified in the Rules. 

  3. The provisions introduced by the Family Law Legislation Amendment (Superannuation) Act 2001 are clearly expressed to not apply - and I emphasise those words - where a previous order has been made pursuant to s 79, although there are limited exceptions. I refer to s 5 of the Act set out in paragraph 20 above. 

  4. Section 15AA(1) of the Acts Interpretation Act 1901(Cth) provides that when interpreting provisions, the construction that promotes the purpose of the Act is to be preferred:

    Regard to be had to purpose or object of Act

    (1)    In the interpretation of a provision of an Act, a construction that would promote the purpose or object underlying the Act (whether that purpose or object is expressly stated in the Act or not) shall be preferred to a construction that would not promote that purpose or object.

  5. The Revised Explanatory Memorandum to the Amending Act provides:

    9. Clause 5 of the Superannuation Bill will provide for the application of the superannuation amendments, as set out in Schedule 1. The policy intention is that the superannuation amendments will not apply if a property settlement, either by a court approved agreement, under section 87 of the Family Law Act, or a court order, under section 79 of the Family Law Act, has been finally concluded prior to the commencement of the superannuation amendments. However, if the court order or the court approval for the agreement is subsequently set aside after the commencement of the superannuation amendments, the superannuation amendments will apply because in such situations, the legal situation of the parties is as if the section 79 order had never been made or the section 87 agreement had never been approved. Therefore, the new regime about the division of superannuation interests should apply.

    …

    11.    Subclause 5(2) of the Superannuation Bill will provide for the exceptions to the general provision in subclause 5(1). Accordingly, subclause 5(2) will provide that the superannuation amendments will not apply to a marriage if:

    * a maintenance agreement, under section 87 of the Family Law Act, was approved before the startup time; or

    * an order for the settlement of property, under section 79 of the Family Law Act, was made before the startup time.

    12. Subclause 5(3) of the Superannuation Bill will provide that if a section 79 order, which is in force at the startup time, is later set aside then the superannuation amendments will apply.

    13. Subclause 5(4) of the Superannuation Bill will provide that if approval of a section 87 agreement is later revoked then, generally, the superannuation amendments will apply.

    14. However, the policy intention is that people who have had a property settlement will not be able to elect to take advantage of the new regime. Therefore, if:

    * a section 79 order is set aside with the consent of the parties, pursuant to subsection 79A (1A); or

    * the approval of a section 87 agreement is revoked because the parties to the agreement want it revoked, pursuant to paragraph 87(8)(b);

    the superannuation amendments will not apply.

  6. It is clear that the legislature intended to exclude parties who had already had their property settlement claims finalised under the Act from taking advantage of the amending provisions by agreement.

  7. Section 79A(1A) is not specifically mentioned in the transitional provisions themselves. If s 79A(1A) had been expressly - and I underline that word - excluded from the application of the superannuation provisions, this would have supported an argument that had it been the intention of Parliament to also exclude the review of an exercise of power, this should have been expressly stated. While s 79A(1A) is expressly mentioned in the explanatory memorandum, no reference is made to the review of a Registrar’s decision. It is therefore somewhat unclear whether it was the intention of Parliament that the amendments not apply where a decision is under review, and if so, whether such an intention could override the statutory right to review, given that such review is by way of a de novo hearing.

  8. It could be argued that if the review of a Registrar’s decision is available in all other circumstances, time limit issues aside, review should not be precluded in these circumstances just because, as Cronin J described, allowing a review may “circumvent,” the legislation by allowing the parties to utilise the provisions of Part VIIIB of the Act.  The legislature could not restrict the application of the amending provisions upon the hearing of the review of a Registrar’s exercise of power.  A review by its nature is a hearing de novo.  Therefore, the law applies as it stands at the time of the review, not the original hearing (see Harris v Caladine (1991) FLC 92-217).

  9. Prima facie, a party seeking a review can be distinguished from parties agreeing to set aside a s 79 order to take advantage of the subsequent legislative amendments. However, while the Court can grant an extension of time after hearing a contested application, it could be seen as a different situation where the parties, as in RBH, consent – and I underline that word – to the extension of time to review.  The parties are thus effectively, albeit in an indirect way, agreeing for the superannuation provisions to apply.  This situation is arguably contrary to the policy intent of the amendments.

  10. It could be argued that it was the clear intention of Parliament that parties could not take advantage of the amendments by consent and therefore parties should not be able to have the benefit of the amendments upon seeking a review of a Registrar’s decision, especially where parties consent to an extension of time to review such orders. This was the approach taken by Cronin J, of course. The availability of review, which would allow the parties to utilise the superannuation provisions, also could be seen to create an unfairness in that had the orders been made by a Judge rather than a Registrar, the option of review would not have been available. In such circumstances, the only option available to a party seeking Part VIIIB orders would be to establish one of the grounds in s 79A(1) and thus have the original orders set aside.

Conclusion

  1. The reasoning of Cronin J is quite persuasive. His Honour is arguably correct that allowing an extension of time for a party to seek the review of a Registrar’s decision, particularly by consent, is contrary to the policy intention of the superannuation amendments and seems to be contrary to s 5(2) of the amending Act.  However, in my opinion, if it was the intention of Parliament to exclude the option of review of a Registrar’s decision, which would otherwise be open to the parties subject to an extension of time being granted, or to exclude the application of the amending provisions to the hearing of the review, the legislature should have made this intention clear and expressly said so.

  2. I should also mention that Cronin J in his reasons in Lehear relied on a decision of the High Court in Mullane v Mullane [1983] HCA 4, where the High Court held that if final orders had been made altering the interest of the parties in property that subject to setting aside for a miscarriage of justice, the s 79 power has been exhausted and is not open to review or variation. This statement, however, overlooks that where such orders were made by a Registrar – and I underline that – such orders are open to review by a Judge.  Thus I find that it is open to the wife to apply for a review of the exercise of power by the Registrar and to apply for an extension of time to bring that application.

  3. In exercising my discretion as to the extension of time, as I have adverted to, the fundamental issue is whether an extension of time is necessary to enable this Court to do justice between the parties.  In that context, it is usually but not always necessary to explain any delay in bringing the application.  Here the delay is substantial but it is understandable.  The wife was operating under the belief that she would be able to receive her entitlement under the orders when the husband turned 50 years of age in 2009.  It was only when she found out otherwise that the imperative to do something about the order, if possible, arose.  Thus I consider that the delay has been satisfactorily explained.

  4. As to the question of the interests of justice, there is no doubt that if the extension is not granted that will work an injustice to the wife, namely, she will not receive her entitlement for at least another five years, and her personal circumstances are such that she desperately needs that money as soon as she can get it.  Importantly in this context, the respondent consents to the extension of time, and for that matter, the application for review itself.  Thus there is no prejudice that the respondent will suffer if the extension is granted.  Thus I propose to grant the extension of time.

  5. Turning then to the review application, the respondent consents to the discharge of the order and the substitution therefore of a new order, and there is nothing further that the applicant needs to establish to succeed on the review, save and except, I suppose, that in the usual way this is an order for property settlement and it needs to be seen to be just and equitable.  In my view, that is the case, and no issue has been raised otherwise in these proceedings.  It is also worth noting that the effect of the change is not to provide the wife with more by way of property settlement, but it is to bring forward the time when the wife can receive her entitlement.  Accordingly, I will make the orders sought.

I certify that the preceding 74 paragraphs are a true copy of the reasons for judgment of the Honourable Justice Strickland delivered on 29 January 2010.

Associate

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