Hickey & Hickey - [2003] FamCA 395

[2003] FamCA 395

FAMILY LAW ACT 1975

IN THE FULL COURT

OF THE FAMILY COURT OF AUSTRALIA Appeal No. EA18 of 2003
File No. SYF5489 of 2002
AT SYDNEY

IN THE MATTER OF:

MICHELLE CAROLINE HICKEY

Wife

- and -

JAMES WILLIAM HICKEY

Husband

- and -

ATTORNEY-GENERAL FOR THE COMMONWEALTH OF AUSTRALIA

Intervener

REASONS FOR JUDGMENT

CORAM:Nicholson CJ, Ellis and O’Ryan JJ.
DATE OF HEARING: 7 April 2003
DATE OF JUDGMENT: 30 May 2003

APPEARANCES:

Mr Watts, Solicitor of Watts McCray, Solicitors, Level 4,
17 – 21 Macquarie Street, Parramatta NSW 2150, appeared on behalf of the wife.
Mr Brereton SC, instructed by Coddington Lamont, Solicitors, Level 5, 140 Arthur Street, North Sydney NSW 2060, appeared on behalf of the husband.
Mr Bennett QC, Solicitor General for the Commonwealth, with
Ms Eastman of counsel instructed by the Australian Government Solicitor, 50 Blackall Street, Barton ACT 2600, appeared on behalf of the Intervener.

Catchwords: Family law – Case stated – Property – Superannuation – Power and desirability to make declarations under s.79 and s.90MS of the Family Law Act 1975 in relation to property and superannuation – Whether there can be a zero percent splitting order under s.90MT(1) – Whether necessary to determine the amount of a superannuation interest under s.90MT(2)(a) for a consent order where no splitting order is sought – Procedural fairness to trustees – Jurisdiction of registrars.

Introduction

This matter comes before this Court by way of a Case Stated by Chisholm J on
12 March 2003, as amended on 2 April 2003, pursuant to s.94A of the Family Law Act 1975 (Cth) (‘‘the Act’’). It raises questions in relation to the interpretation of the provisions of the Act which deal with superannuation interests in proceedings for property settlement. It also raises issues concerning the juridical basis of the practice of including declaratory provisions in consent orders in such proceedings.
Subsections 94A(1) and (2) of the Act relevantly provide:
“(1) If, in proceedings in a court, being proceedings in which a decree or decision to which subsection 94(1) or (1AA) applies could be made, a question of law arises which the Judge and at least one of the parties wish to have determined by a Full Court of the Family Court before the proceedings are further dealt with, the Judge shall state the facts and question in the form of a special case for the opinion of a Full Court, and a Full Court shall hear and determine the question.
(2) The Full Court may draw from the facts and the documents any inference, whether of fact or of law, which could have been drawn from them by the Judge.”

The facts as set out in the Case Stated

The facts as set out in the Case Stated by Chisholm J are as follows:
“1.     The parties married on 25 September 1992 and separated on 29 November 2001.
2.       There are two children of the marriage namely:
A … born 18 May 1995
C … born 25 October 1998
3.       Orders have been made that the children reside with the wife and have extensive contact with the husband.
4.       Both parties are in good health.
5.       The husband is engaged in full time employment and earns an income of approximately $70,000.00.
6.       The wife is engaged in full time employment and earns an income of approximately $58,000.00.
7.       The husband pays child support in respect of the two children.
8.       During the marriage the husband made direct financial contributions through his earnings that were greater than the wife’s and the wife made greater contributions in the role of homemaker and parent than the husband.
9.       Neither party asserts that there is any significant financial contribution by them or on their behalf outside their own personal exertions.
10.     The parties have negotiated a settlement of alteration of their property interests.
11.     The parties agree that the wife had an accumulation interest in the growth phase in a superannuation fund in the approximate sum of $25,000.00 and that the husband had an accumulation interest in the growth phase in a superannuation fund in the approximate sum of $10,600.00. Both parties are less than 55 years of age. The trustees of the parties’ respective superannuation interests are independent of the parties. Neither the husband nor the wife has satisfied a relevant condition of release.
12.     Partial property orders have been made on the 5 March 2002 (Appendix A)
13.     Pursuant to those orders the husband will receive net assets in the approximate sum of $104,000.00 and the wife will receive net assets in the approximate sum of $174,000.00.
14. The parties have not filed any evidence that would enable the Court to determine the value of the parties’ respective interests in superannuation pursuant to Section 90MT(2) Family Law Act 1975.
15.     The parties seek a declaration in the following terms:
“5.That, except as otherwise provided in these orders, the husband and the wife each be declared the sole legal and beneficial owners of all items of property or resource including money, motor vehicles, insurances, equities, superannuation entitlements and personal effects currently in the possession or control of each of them respectively.””

The questions of law as set out in the Case Stated

The questions are as follows:
“Definitions of Expressions used in the Questions
A. Sections referred to in these questions are sections in the Family Law Act.
B.In these questions, “the declaration in relation to property” means the declaration sought in paragraph 5 of Short Minutes of Orders so far as it relates to “the sole legal and beneficial ownership of all items of property including money, motor vehicles, insurances, equities and personal effects currently in the possession or control of each of the parties respectively”.
C.“The declaration in relation to superannuation” means the declaration sought in paragraph 5 of Short Minutes of Order so far as it relates to “the sole legal and beneficial ownership of superannuation entitlements currently in the possession or control of each of the parties respectively.”
D.“The declaration in relation to resources” means the declaration referred to in paragraph 5 of the Short Minutes of Orders so far as it relates to “the sole legal and beneficial ownership of all items of resource (other than superannuation).”
Questions

Section 78

1.Does section 78 grant the Court power to make the declaration in relation to property?
2.If section 78 does grant the Court power to make the declaration in relation to property, should the Court make it?
3.Does section 78 and/or section 90MS grant the Court power to make the declaration in relation to superannuation?
4.If section 78 and/or section 90MS does grant the Court power to make the declaration in relation to superannuation, should the Court make it?
5.Does section 78 grant the Court power to make the declaration in relation to resources?
6.If section 78 does grant the Court power to make the declaration in relation to resources, should the Court make it?

Section 79

7.Does section 79 grant the Court power to make the declaration in relation to property?
8.If section 79 does grant the Court power to make the declaration in relation to property, should the Court make it?
9.Does section 79 and/or section 90MS grant the Court power to make the declaration in relation to superannuation?
10.If section 79 and/or section 90MS does grant the Court power to make the declaration in relation to superannuation, should the Court make it?
11.Does section 79 grant the Court power to make the declaration in relation to resources?
12.If section 79 does grant the Court power to make the declaration in relation to resources, should the Court make it?

Determinations under s 90MT(2), and procedural fairness requirements

13.If the Court should otherwise make the declaration under s 78 and/or s 90MS in relation to superannuation, must the Court make a determination under section 90MT(2) before making the declaration?
14.If the Court should otherwise make the declaration under s 79 and/or s 90MS in relation to superannuation, must the Court make a determination under section 90MT(2) before making the declaration?
15.If the Court should otherwise make the declaration under s 78 and/or s 90MS in relation to superannuation, must the Court be satisfied that the trustee of any relevant superannuation interest has been accorded procedural fairness before making the declaration?
16.If the Court should otherwise make the declaration under s 79 and/or section 90MS in relation to superannuation, must the Court be satisfied that the trustee of any relevant superannuation interest has been accorded procedural fairness before making the declaration?
17.If the Court can and should make the declaration under s 79 in relation to property, but cannot or should not make the declaration under s 79 and/or s 90MS in relation to superannuation, then must the Court make a determination under section 90MT(2) before making the declaration in relation to property?
18.If the Court could not or should not make the declaration under s 79 in relation to property, should the Court have made the orders and notations on 5 March 2003 without making a determination as to the value of the parties’ respective interests in superannuation under section 90MT(2)?

Jurisdiction of registrars

19.If section 78 does grant the Court power to make the declaration in relation to property, can the jurisdiction be exercised by a Registrar, relying upon Order 36A rule 2(m) of the Family Law Rules?
20.If section 79 does grant the Court power to make the declaration in relation to property, can the jurisdiction be exercised by a Registrar relying upon Order 36A rule 2(m) of the Family Law Rules?

Principles

21.If the Court is able to grant the declaration in relation to property and/or the declaration in relation to superannuation and/or the declaration in relation to resources, what other principles should it apply in considering whether to do so?”

Further background facts

The following further background facts emerged during the course of the hearing before us and were not in dispute. On 23 September 2002 an Application was filed on behalf of the husband, in which he sought an order for property settlement and a final parenting order. On 1 November 2002 a Response to that Application was filed on behalf of the wife, in which she also sought an order for property settlement and a final parenting order. It was accepted by all parties before us that the property proceedings were instituted pursuant to the provisions of s.79 of the Act and that, at all relevant times, both the husband and the wife were legally represented. On 13 January 2003 the parties attended a Conciliation Conference. They subsequently resolved all issues and then sought that final orders be made, by consent, by a Deputy Registrar. On
27 February 2003 a Deputy Registrar declined to make the orders and an Application for Review of the Deputy Registrar’s decision was filed on 5 March 2003. This application came before Chisholm J on 5 March 2003. On that day, by consent, he made a parenting order and also the following order:
“That by way of partial property orders, orders numbered 1 to 4 and 6 to 8 and notations numbered 1 and 2 be made in accordance with the Terms of Settlement signed by the parties and marked exhibit “A”.”
Exhibit “A”, being the Terms of Settlement, provided as follows:
“1.That, forthwith, both parties do all acts and things necessary to procure that proceeds of sale of the former matrimonial home presently held in trust for the parties by Kirkby & Associates be paid in the following manner and priority:
(a)in payment to the husband’s father in the sum of $38,000.00 (representing outstanding loans payable to the husband’s father);
(b)in payment to the husband in the sum of $84,750.55;
(c)in payment to the wife in the sum of $147,500.93.
2.That, forthwith, the husband transfer to the wife all of his right, title and interest in the motor vehicle YIP 987 (the “Commodore”).
3.That, upon and from transfer of the husband’s interest in the Commodore, the wife indemnify and keep indemnified the husband in respect of all registration, maintenance and insurance costs and any other costs associated with ownership of the Commodore including payments and charges due under any relevant encumbrance.
4.That, with seven days of the making of these orders, the husband do all acts and things necessary to transfer to the wife and to make available for collection by the wife or her nominee all those items of personalty identified in the following list (and which presently remain within the husband’s possession or control):
(a)Villaroy and Boch ceramic leadlight holder of Mary and Jesus;
(b)       leadlight Santa Clause, led light holder;
(c)small wall hanging quilt with Christmas tree and ceramic buttons;
(d)       brown plush soft toy Rudolph Reindeer with long legs;
(e)       ceramic nativity and stable;
(f)       Christmas story book stored in class; and
(g)any other Christmas decoration formerly located in a blue plastic case at the former family home.
5.That, except as otherwise provided in these orders, the husband and the wife each be declared the sole legal and beneficial owners of all items of property or resource including money, motor vehicles, insurances, equities, superannuation entitlements and personal effects currently in the possession or control of each of them respectively.
6.That, except as otherwise provided in these orders, the husband and the wife each be declared solely responsible in relation to any and all liabilities presently in the name of each of them respectively.
7.That both the husband and the wife execute all documents and instruments necessary to give effect to these orders.
8.That, if either party refuses or neglects to sign (within fourteen days of a written request to so do) any documents necessary to give effect to the terms of these orders, the Registrar of the Sydney Registry of the Family Court of Australia be hereby appointed pursuant to the provisions of section 106A of the Family Law Act to execute such documents on behalf of either or both parties as are necessary to give effect to these orders.
NOTATIONS:
1.That pursuant to section 81 of the Family Law Act 1975 the husband and the wife intend that these orders shall as far as practicable finally determine the financial relationship between them and avoid any further proceedings between them.
2.The parties consent to the making of the orders herein and to those orders being of the same force and validity as if they had been made after a hearing by the court.”
Chisholm J did not include paragraph 5 of the Terms of Settlement in the order and it is this paragraph which gives rise to the questions and, as earlier recorded, he subsequently stated a case for the consideration by this Court.
On 3 April 2003 a Notice of Intervention was filed on behalf of the Commonwealth Attorney General on the basis that the proceedings raise matters that affect the public interest. The Solicitor General appeared before us and made submissions on the questions, with the exception of questions 19 and 20.
On 28 March 2003 an application was made on behalf of the husband that Professor Parkinson be granted leave to appear and address the court as amicus curiae. We refused that application and indicated that we would give reasons in our final judgment. Professor Parkinson prepared submissions concerning the questions in a draft paper, which was attached to the written submissions relied upon by the husband. He is a Professor of Law at Sydney University and has written extensively on family law and related topics. He is familiar with the relevant law and the practice of the Family Court. However, he is not admitted to practice and at all times both the husband and the wife have had legal representation. At the hearing Mr Brereton SC appeared for the husband. At the time of the application there was a real possibility that the Attorney General would intervene.
We dismissed the application because we were of the view that the intervention of Professor Parkinson was not necessary to enable us to do justice effectively and efficiently, or to determine the law: National Australia Bank v Hokit Pty Ltd (1996) 39 NSWLR 377 at 381 per Mahoney P and because we were not persuaded that it was otherwise appropriate to grant the application.
At the commencement of his submissions, the Solicitor General advised the Court that the Attorney General supported the submissions made by Senior Counsel for the husband in all respects. However, the Solicitor General did make certain submissions supplementary to the submissions of Senior Counsel for the husband.
Paragraph 5 of the Terms of Settlement includes the words “or resource”. On behalf of the husband it was submitted that it is not possible to make a declaration pursuant to the provisions of s.78 in relation to a financial resource “for by definition one does not have a legal or equitable entitlement to a financial resource.” We would add that an order cannot be made under s.79 in relation to a financial resource although by reason of s.75(2) such a resource can be taken into account when considering what order, if any, to make under s.79. At the commencement of the hearing before us we were requested on behalf of the wife and the husband to consider paragraph 5 of the Terms of Settlement on the basis that the words “or resource” were deleted from it. Thus, neither party sought that this Court answer questions numbered 5, 6, 11 and 12.

Relevant superannuation law

The case law reveals that prior to 28 December 2002 there were difficulties in relation to the manner in which the Court could deal with superannuation interests in property settlement proceedings and the ability of the Court to make an order binding on trustees of the relevant funds.
In Crapp and Crapp (1979) FLC 90-615 Fogarty J at 78,185-78,186 commented as follows about the unsatisfactory nature of the treatment of superannuation interests in such proceedings:
“The result frequently is that the Court is forced into a position which of its very nature is incapable of producing a satisfactory result to the parties in many cases, and often resulting in a real sense of grievance in one or both of the parties.
…
Were it not for the presence of the superannuation fund interest the result of this case would have been highly predictable and the ambit of the discretion under sec.79 would have been fairly narrowly confined. However, the superannuation fund interest introduces into the matter a further element which is very much of the future, has real elements of uncertainty about it and is highly subjective in its evaluation. It is a matter in relation to which different Judges may arrive at differing conclusions…”
The difficulties of dealing with superannuation interests were also addressed by the Full Court in Harrison and Harrison (1996) FLC 92-682 at 83,084. A discussion of how the Court dealt with superannuation interests of parties to a marriage in property settlement proceedings between January 1976 and 28 December 2002, and the problems associated with the various approaches adopted during that period, appears in the Revised Explanatory Memorandum to the Family Law Legislation Amendment (Superannuation) Bill 2001.
The Family Law Legislation Amendment (Superannuation) Act 2001 (Cth) came into force on 28 December 2002. Part VIIIB was inserted into the Act. That Part enables courts exercising jurisdiction under the Act, in appropriate circumstances, to make an order in relation to the superannuation interests of the parties to a marriage. In addition, the Part contains provisions enabling the courts to make orders binding on the trustees of superannuation plans. The Family Law (Superannuation) Regulations 2001 (“the Regulations”) provides machinery for, inter alia, the operation of the scheme including provisions relating to the valuation of superannuation interests and the mechanism for splitting superannuation payments once an order is made. The Superannuation Industry (Supervision) Amendment Regulations 2001 (No. 3) enables parties and trustees to obtain a clean financial break for certain types of superannuation interests by the creation of a new interest, a roll over or transfer of the benefit and the payment of a lump sum in circumstances where the non-member spouse has met a condition of release. The Family Law Legislation Amendment (Superannuation) (Consequential Provisions) Act 2001 (Cth) and the Family Law Legislation Amendment (Superannuation) (Consequential Provisions) Act 2002 (Cth) effected: consequential amendments to other complimentary legislation; extended the powers of the courts exercising jurisdiction under the Act; and identified additional responsibilities imposed on the trustees of superannuation funds under both the Act, the Regulations, the Superannuation Industry (Supervision) Act 1993 (Cth) and the Superannuation Industry (Supervision) Regulations 1994.

Section 31 of the Act provides inter alia:
“Jurisdiction is conferred on the Family Court with respect to:-
(a) matters arising under this Act … in respect of which matrimonial causes are instituted or continued under this Act ...”
Section 4(1) of the Act is the main definition section of the Act and defines ‘matrimonial cause’.
Section 39(1) of the Act provides inter alia:
“Subject to this Part, a matrimonial cause may be instituted under this Act:
(a) in the Family Court …”
Section 39(4) provides:
“Proceedings of a kind referred to in the definition of matrimonial cause in subsection 4(1) … may be instituted under this Act …”
Section 39 makes general provision for the exercise of jurisdiction under the Act, determines which courts can exercise that jurisdiction and the jurisdictional requirements for connection with Australia. By the combined effect of s.31(1)(a) and s.39(1), jurisdiction is conferred upon the Family Court in respect of matters which are ‘matrimonial causes’ within the definition of that expression in s.4(1).
The definition of ‘matrimonial cause’ in s.4(1) includes:
“(ca)proceedings between the parties to a marriage with respect to the property of the parties to the marriage or either of them, being proceedings:
(i)arising out of the marital relationship;
(ii)in relation to concurrent, pending or completed proceedings between those parties for principal relief; or
(iii)in relation to the dissolution or annulment of that marriage or the legal separation of the parties to that marriage, being a dissolution, annulment or legal separation effected in accordance with the law of an overseas jurisdiction, where that dissolution, annulment or legal separation is recognized as valid in Australia under section 104…”
This paragraph confers jurisdiction in proceedings between parties to a marriage with respect to their property. The sections of the Act which specifically relate to ‘property’ include ss.78, 79 and 79A.
Section 4(1) also defines ‘property’ in relation to the parties to a marriage or either of them as meaning “… property to which those parties are, or that party is, as the case may be, entitled, whether in possession or reversion.”
The object of Part VIIIB is set out in s.90MA which provides:
“The object of this Part is to allow certain payments (splittable payments) in respect of a superannuation interest to be allocated between the parties to a marriage, either by agreement or by court order.”
This is an important provision because it governs the interpretation of Part VIIIB.
The term ‘splittable payment’ is defined in s.90MD to have the meaning given by s.90ME which provides:
“(1)    Each of the following payments in respect of a superannuation interest of a spouse is a splittable payment:
(a) a payment to the spouse;
(b) a payment to another person for the benefit of the spouse;
(c) a payment to the legal personal representative of the spouse, after the death of the spouse;
(d) a payment to a reversionary beneficiary, after the death of the spouse;
(e) a payment to the legal personal representative of a reversionary beneficiary covered by paragraph (d), after the death of the reversionary beneficiary.
(2)     A payment is not a splittable payment if it is prescribed by the regulations for the purposes of this subsection. The regulations may prescribe a payment either:
(a) generally (that is, for the purposes of all payment splits in respect of a superannuation interest); or
(b) only for the purposes of applying this Part to a particular payment split in respect of a superannuation interest.
(3)     If a payment is made to another person for the benefit of 2 or more persons who include the spouse, then the payment is nevertheless a splittable payment, to the extent to which it is paid for the benefit of the spouse.”
Section 90MF defines reversionary interest as follows:
“For the purposes of this Part, a person’s interest in an eligible superannuation plan is a reversionary interest at any time while the person’s entitlement to benefits in respect of the interest is conditional on the death of another person who is still living.”
Subsection 90MB(1) provides:
“(1)Subject to subsection (3), this Part has effect despite anything to the contrary in any of the following instruments (whether made before or after the commencement of this Part):
(a) any other law of the Commonwealth;
(b) any law of a State or Territory;
(c) anything in a trust deed or other instrument.”
Section 90MC provides:
“A superannuation interest is to be treated as property for the purposes of paragraph (ca) of the definition of matrimonial cause in section 4.”
A superannuation interest is therefore to be treated as property for the purposes of proceedings between the parties to a marriage with respect to the property of the parties or either of them, being proceedings arising out of the marital relationship.
Included in Division 3 of Part VIIIB of the Act is s.90MS which provides:
“(1) In proceedings under section 79 with respect to the property of spouses, the court may, in accordance with this Division, also make orders in relation to superannuation interests of the spouses.
Note 1: Although the orders are made in accordance with this Division, they will be made under section 79. Therefore they will be generally subject to all the same provisions as other section 79 orders.
Note 2: Sections 71A and 90MO limit the scope of section 79.
(2) A court cannot make an order under section 79 in relation to a superannuation interest except in accordance with this Part.”
Division 3 of Part VIIIB contains provisions which specify orders that a court may make in accordance with s.90MS in relation to a superannuation interest, namely ss.90MT and 90MU.
Section 90MT provides:
“(1)    A court, in accordance with section 90MS, may make the following orders in relation to a superannuation interest (other than an unsplittable interest):
(a)if the interest is not a percentage-only interest – an order to the effect that, whenever a splittable payment becomes payable in respect of the interest:
(i)the non-member spouse is entitled to be paid the amount (if any) calculated in accordance with the regulations; and
(ii) there is a corresponding reduction in the entitlement of the person to whom the splittable payment would have been made but for the order;
(b) an order to the effect that, whenever a splittable payment becomes payable in respect of the interest:
(i) the non-member spouse is entitled to be paid a specified percentage of the splittable payment; and
(ii) there is a corresponding reduction in the entitlement of the person to whom the splittable payment would have been made but for the order;
(c) if the interest is a percentage-only interest – an order to the effect that, whenever a splittable payment becomes payable in respect of the interest:
(i)the non-member spouse is entitled to be paid the amount (if any) calculated in accordance with the regulations by reference to the percentage specified in the order;
(ii) there is a corresponding reduction in the entitlement of the person to whom the splittable payment would have been made but for the order;
(d) such other orders as the court thinks necessary for the enforcement of an order under paragraph (a), (b) or (c).
(2)     Before making an order referred to in subsection (1), the court must make a determination under paragraph (a) or (b) as follows:
(a) if the regulations provide for the determination of an amount in relation to the interest, the court must determine the amount in accordance with the regulations;
(b) otherwise, the court must determine the value of the interest by such method as the court considers appropriate.
(2A) The amount determined under paragraph (2)(a) is taken to be the value of the interest.
(3) Regulations for the purposes of paragraph (2)(a) may provide for the amount to be determined wholly or partly by reference to methods or factors that are approved in writing by the Minister for the purposes of the regulations.
(4)     Before making an order referred to in paragraph (1)(a), the court must allocate a base amount to the non-member spouse, not exceeding the value determined under subsection (2).
Note: The base amount is used to calculate the entitlement of the non-member spouse under the regulations.”
Section 90MT thus specifies orders the Court may make in accordance with s.90MS, namely an order allocating a defined amount to a spouse, an order allocating a defined percentage to a spouse and an order applicable to percentage only interests. However, when making such an order the Court exercises its powers under s.79. This has the consequence that the order must meet the requirements of s.79(2).
Finally, it is also relevant to consider s.90MZD which provides for the circumstances in which an order under Part VIIIB will be binding on the trustee. Section 90MZD(1) provides:
“(1)An order under this Part in relation to a superannuation interest may be expressed to bind the person who is the trustee of the eligible superannuation plan at the time when the order takes effect. However:
(a)in the case of a trustee who is not a secondary government trustee – the court cannot make such an order unless the trustee has been accorded procedural fairness in relation to the making of the order; and
(b) in the case of a secondary government trustee:
(i)the court cannot make such an order unless another trustee of the eligible superannuation plan has been accorded procedural fairness in relation to the making of the order; and
(ii)the court may, if it thinks fit, require that the secondary government trustee also be accorded procedural fairness.”

Section 79 Order

In order to put into context the issues raised by the questions it is necessary to compare the power conferred upon the Court by s.79 with the power conferred by s.78, both of which are contained within Part VIII of the Act.
Section 78 of the Act provides:
“(1) In proceedings between the parties to a marriage with respect to existing title or rights in respect of property, the court may declare the title or rights, if any, that a party has in respect of the property.
(2) Where a court makes a declaration under sub-section (1), it may make consequential orders to give effect to the declaration, including orders as to sale or partition and interim or permanent orders as to possession.”
Section 78 confers on the Court what is essentially the jurisdiction previously exercised by State courts under the various State equivalents of s.17 of the English Married Women’s Property Act 1882. The section empowers the courts to declare existing interests in property according to the general principles of law and equity and to make consequential orders to give effect to the declaration. The power so conferred is entirely discretionary: Holley and Holley (1982) FLC 91-257 at 77,441. However, the section empowers a court to make a declaration only with respect to existing title or rights in respect of property and to make any necessary consequential orders. The section does not allow a court to alter existing rights; such a power is contained in s.79. Thus, a declaration under s.78(1) is an order which determines the existing title or rights of parties to a marriage in respect of property: Antmann and Antmann (1980) FLC 90-908 at 75,746. By contrast s.79 confers power upon the Court to make orders altering the interests of parties in property, having regard to the matters referred to in s.79.
The case law reveals that there is a preferred approach to the determination of an application brought pursuant to the provisions of s.79. That approach involves four inter-related steps. Firstly, the Court should make findings as to the identity and value of the property, liabilities and financial resources of the parties at the date of the hearing. Secondly, the Court should identify and assess the contributions of the parties within the meaning of ss.79(4)(a), (b) and (c) and determine the contribution based entitlements of the parties expressed as a percentage of the net value of the property of the parties. Thirdly, the Court should identify and assess the relevant matters referred to in ss.79(4)(d), (e), (f) and (g), (“the other factors”) including, because of s.79(4)(e), the matters referred to in s.75(2) so far as they are relevant and determine the adjustment (if any) that should be made to the contribution based entitlements of the parties established at step two. Fourthly, the Court should consider the effect of those findings and determination and resolve what order is just and equitable in all the circumstances of the case: Lee Steere and Lee Steere (1985) FLC 91-626; Ferraro and Ferraro (1993) FLC 92-335; Davut and Raif (1994) FLC 92-503; Prpic and Prpic (1995) FLC 92-574; Clauson and Clauson (1995) FLC 92-595; Townsend and Townsend (1995) FLC 92-569; Biltoft and Biltoft (1995) FLC 92-614; McLay and McLay (1996) FLC 92-667; JEJ and DDF (2001) FLC 93-075 and Phillips and Phillips (2002) FLC 93-104.
Section 79, unlike s.78, requires the Court to consider the whole of the property of the parties, however and whenever acquired, notwithstanding that the parties may only seek an alteration of interest in some of that property. As a consequence of the first step in the preferred approach to the determination of the s.79 proceedings, each party to the proceedings has an obligation to make a full and frank disclosure of his/her financial circumstances and all matters relevant thereto: Oriolo and Oriolo (1985) FLC 91-653; Black and Kellner (1992) FLC 92-287; Weir and Weir (1993) FLC 92-338 and Tate v Tate (2000) FLC 93-047.
Section 81 of the Act provides that:
“In proceedings under this Part [Part VIII], other than proceedings under section 78 or proceedings with respect to maintenance payable during the subsistence of a marriage, the court shall, as far as practicable, make such orders as will finally determine the financial relationships between the parties to the marriage and avoid further proceedings between them.”
Section 81 contains an exhortation as to how the powers of the court under Part VIII should be exercised and encourages the Court to consider practical means of achieving finality. The section does not, by itself, confer an independent power upon the court to make an order otherwise than in accordance with s.79: Dench and Dench (1978) FLC 90-469 at 77,402-403.
In Mullane v Mullane (1983) FLC 91-303 at 78,068, Mason ACJ, Wilson, Brennan, Deane and Dawson JJ held:
“The effect of treating the order as if it had been made under sec. 79 is that, subject to a limited jurisdiction to vary it or set it aside, the power of the Family Court to make an order under sec. 79 is treated as having been exercised and as exhausted by that notional exercise. The limited jurisdiction to set aside or vary such an order is that conferred by sec. 79A and exists only in special circumstances, namely, where the Court is satisfied that there has been a miscarriage of justice by reason of fraud, duress, suppression of evidence, the giving of false evidence or any other circumstance ...”
In so concluding, their Honours did not refer to the provisions of s.81.
The Full Court in Branchflower and Branchflower (1980) FLC 90-857 at 75,445-75,446 held that once an order had been made pursuant to the provisions of s.79 “…the power of the Court to make any further property order is spent, unless sec. 79A applies.” See also Ramsey and Ramsey (No. 2) (1983) FLC 91-323 at 78,205.
In Slapp and Slapp (1989) FLC 92-022 Nygh J (with whom Fogarty and Bulbeck JJ concurred) said at 77,360:
“It is not open to a court to make a substantive variation to orders previously made under sec. 79. That proposition can today no longer be doubted. It is based upon the principle, endorsed by the High Court in the case of Taylor v. Taylor (1979) FLC ¶90-674; 5 Fam. L.R. 289, that an order under sec. 79 is a once and for all proposition.
Such an order can only be varied on appeal or, where the circumstances warrant the same, pursuant to sec. 79A. As counsel for the husband pointed out, the first extension of time can be seen as either an extension by agreement between the parties made by the very authority of the order itself, or alternatively as an exercise of the court’s power to vary an order by the consent of the parties pursuant to sec. 79A(1A).”
The principle referred to by Nygh J, namely that an order made under s.79 is a “once and for all proposition”, was recently affirmed in Sommerville and Sommerville (2000) FLC 93-042. After referring to the passage quoted above from Mullane, Nicholson CJ said at 87,664:
“114. That statement remains the law today subject to the qualification introduced by amendments made in 1983 to s 79A and, in particular, in relation to the present case by the insertion of s 79A(1A) permitting the setting aside or variation of an order with the consent of all of the parties to the original proceedings in which the order was made.
115. Further qualification of that principle might be said to arise if the order in question was made by a Registrar by reason of the decision of the High Court in Harris v Caladine in that such orders, even when made by consent, may be reviewed by a judge by way of hearing de novo, provided that the application is made within the time prescribed by the Rules of court or an extension of time has been granted. As I have pointed out earlier in these reasons for judgment a Court may also review a decision by a Registrar of its own motion, and this is not subject to any time limit.”
The principle demonstrates that but for the operation of s.79A, the Court has power to make only one order for property settlement pursuant to the provisions of s.79. Thus, any such order inherently has the effect of finally disposing of all issues relating to the disclosed property of the parties. This has two significant effects on property orders. Firstly, it means that ‘catch all’ orders are essentially ineffectual if they do not effect an alteration of interest. Nevertheless, it is said that their value lies in their form in order to appease concerned parties rather than their possible empty substance. Secondly, an order for property settlement made pursuant to the provisions of s.79 cannot legally constitute “orders” in the plural sense, but rather is a single order made up of various paragraphs or clauses.
In our view, an order made pursuant to the provisions of s.79 was correctly described by Senior Counsel for the husband as a “once and for all” proposition. Although there may be partial or interim orders (s.79(6) of the Act) ultimately there is only one exercise of power under s.79 in respect of the property of the parties, even though that single exercise of power may be reflected in a complex order of many paragraphs or clauses, each dealing with a different item of property and some dealing with questions of implementation. It may be that some items of property are not dealt with in paragraphs or clauses of the order as it is not proposed that there be an alteration of interest in such property. However, the single exercise of power prevents a further application in relation to both specified and non specified items of property except pursuant to the provisions of s.79A.
The hearing before us proceeded on the basis that the order sought by the parties in relation to property settlement was pursuant to s.79 and not s.78 and that there were various paragraphs or clauses of that one order, including paragraph 5 of the Terms of Settlement. Paragraph 5 was part of a negotiated settlement of an application for an alteration of property interests. Accordingly, in our view, it is not appropriate or necessary for us to deal with questions 1 to 6 inclusive or questions 13, 15 and 19.

Section 79 – ‘Catch All’ Order

During the course of the hearing before us paragraph 5 of the Terms of Settlement was described as a ‘catch all’ provision. The written submissions of the wife record:
“The importance of being able to make specific and “catch all” declarations
In the last twenty seven years there are many Full Court decisions; thousands of single instance decisions and tens of thousands of consent orders where individual declarations in relation to particular items or classes of property and so called “catch all” declarations, have been made.
There is a very important and obvious reason why this has happened. People want to draw a line in the sand. They want certainty. They want to know that they can move on.
In a piece of extra judicial writing, the Honourable Richard Chisholm has said:-
“No doubt the charm of the traditional orders has been that parties can see at a glance that the orders tie up all loose ends. They exclude the possibility that one evening, over what PG Wodehouse would have called a thoughtful fireside, Alex’s ex-spouse might look back at the consent orders made two years previously, and think, “hang on, the orders said nothing about Alex’s shares – perhaps I can still claim half of them? and then there was the boat ...” If the traditional orders have been made … they can be dusted off and seen to dispose of any such ruminations”.”
Section 79 enables the Court to make “such order as it considers appropriate altering the interests of the parties in the property … including an order requiring either or both of the parties to make … such settlement or transfer of property as the court determines.” As was pointed out in the written submissions of the husband, normally such an order is in personam and requires a party to do something, such as to execute a document to effect a transfer of property or cause property to be sold or to pay a sum of money. If an order made pursuant to s.79 requires a transfer of real property then the relevant paragraph or clause will ordinarily set out the obligations of the transferor necessary to effect a transfer of the title because of the requirement for registration and also to facilitate enforcement in the event of default by the transferor.
Section 80(1)(d) contained in Part VIII of the Act provides:
“(1)The court, in exercising its powers under this Part, may do any or all of the following:
…
(d)order that any necessary deed or instrument be executed and that such documents of title be produced or such other things be done as are necessary to enable an order to be carried out effectively or to provide security for the due performance of an order;”
An order which provides for the transfer of an interest in property and which also requires that a deed or instrument be executed or that documents of title be produced or that other things be done as are necessary to make the transfer provision effectual at law will not be effective unless and until those requirements for a valid transfer have been fulfilled. Moreover, we accept the submission on behalf of the husband that the wording of s.79 suggests that a provision in a s.79 order may have the effect of altering a party’s interest in property without the need for any other enabling act of the party who has legal or equitable title. Thus, a provision in a s.79 order may be effectual, without more, to convert joint ownership of a chattel into sole ownership in favour of the party who has possession of it if no other formalities are required for transfer. A provision such as paragraph 5 of the Terms of Settlement, which by its terms does not require anyone to do anything, would not transfer ownership of property to a party who is not in possession of that property, but it would have the effect of converting joint ownership into sole ownership in favour of the party in possession.
A provision such as paragraph 5 of the Terms of Settlement in a s.79 order has the effect of altering interests in jointly owned property to the extent that the spouse who is not in possession of personal chattels the subject of that paragraph, might otherwise have been able to assert a legal or equitable title to that property. It is a paragraph or clause contained in an order made pursuant to the power in s.79(1). In so far as there is property referred to in or caught by the paragraph that is not already legally or beneficially vested in the possessor, it works as an alteration of property interest to assign the other spouse’s interest in that property to the possessor. To that extent, the paragraph in its own right effects an alteration of property interest. We also agree with the submission on behalf of the husband that conversely where any transfer of ownership would require a provision in a s.79 order to be made in personam to effect a transfer of interest, a provision in the terms of paragraph 5 of the Terms of Settlement would be ineffectual because it does not impose an in personam obligation with respect to property. It follows that whilst a provision such as paragraph 5 of the Terms of Settlement may be expressed as declaratory it has the effect of altering property interests in certain items of jointly owned property such as jointly owned furniture and of altering the interest in such property owned by one spouse but in the possession of the other.
In conclusion, we are of the opinion that the Court has power under s.79 to include in an order a paragraph or clause such as paragraph 5 of the Terms of Settlement to the extent that the provision is with respect to property as defined in s.4(1) of the Act and to the extent that it alters the interests of the parties in any such property.
We now turn to consider, whether, if a paragraph or clause such as paragraph 5 of the Terms of Settlement in a s.79 order does not alter interests in property, the Court nevertheless has power to include such a paragraph or clause in an order.
Section 80 sets out a range of powers that the Court may exercise in proceedings under Part VIII. Section 80(1)(j) permits the court to make an order by consent and s.80(1)(k) enables the court to make any other order which the Court thinks necessary to do justice.
In Davidson and Davidson (No 2) (1994) FLC 92-469 at 80,874-80,875 the Full Court said:
·     “Section 80(1) is limited by its introductory words, namely that ‘‘The court, in exercising its powers under this Part, may do any or all of the following ...’’. That is, s. 80(1) is activated by the exercise by the court of some other of the powers in Part VIII.
For example, a proceeding which sought a lump sum payment would not be within power unless it was connected to an existing or previous proceeding for orders for maintenance or property settlement; similarly with proceedings seeking a secured payment, the execution of a document, the transfer of property, consent orders, etcetera, as enumerated in s. 80(1).
·     However, once s. 80(1) is activated there is no basis for reading down its powers or scope (other than the limitations to which we have referred generally above). It is an enabling provision and the Court in exercising its powers may do so in ways which are suitable and appropriate to meet the varying circumstances which arise in individual cases.
·     A relevant connection or relationship is required between a primary power within Part VIII and the exercise of any of the powers in s. 80(1). That is, it is not sufficient in order to attract the powers under s. 80(1) that the Court is exercising or has exercised one or more of the other powers in Part VIII; there must be some connection or relationship between those two circumstances.
The circumstance that the powers under s. 80(1) may be exercised from time to time and in relation to previous orders is demonstrated by the terms of the subsection itself and by a number of the decisions over the years: see, for example, Kaljo and Kaljo (1978) FLC 90-445; Molier and Van Wyk (1980) FLC 90-911; Chernischoff and Chernischoff (1980) FLC 90-848; Collins and Collins (1977) FLC 90-286; Rowan and Rowan (1977) FLC 90-310 and the cases referred to above.”
Section 80 sets out various incidental powers that the Court may exercise when exercising its powers under Part VIII and thus when exercising its powers under s.79. As the Solicitor General submitted, s.80 provides what the Court may do when exercising its power under s.79.
Section 79(1) refers collectively to the “property” of the parties or either of them, and the intent expressed in that subsection is that the Court must deal with that property as a whole. The preferred approach to a s.79 proceeding demonstrates that at step three an adjustment may be made in favour of a party because of the existence of property to which that party made no relevant contribution and in respect of which there will be no alteration of interest. It is within discretion to alter an interest in particular property in favour of a party who made no contribution to that property. The order deals with all property, including, as we have said, property in relation to which there are no legal formalities for transfer and property in respect of which it is not intended that there be an alteration of interest.
To the extent that a provision in a s.79 order, such as paragraph 5 of the Terms of Settlement, does not effect an alteration of property interests, it is part of an entire order which adjusts the interests of the parties in the whole of their property. The entire order does not cease to be an order pursuant to s.79 simply because one part of it confirms the interest of one party in certain property. In exercising its powers under Part VIII, the Court may do any or all of the matters referred to in s.80, including, pursuant to s.80(1)(k), make any order which the Court thinks it is necessary to make to do justice. An order pursuant to s.79 may thus include a paragraph or clause which has the effect that the existing title or rights of the parties in respect of certain property are not altered, provided the order read as a whole effects an alternation of property interests. Such a provision is indicative that the Court has considered all assets and made alterations of interests in certain items but left other interests untouched. As the Solicitor General submitted, once there are proceedings under s.79 with respect to the property of the parties in which an order is sought, “that opens it up” and allows what he called “general declarations”. It is therefore within power to make provision in a s.79 order in relation to certain assets which are part of the property of the parties but the interests in which are not altered by the order.
In our view, even if a provision such as paragraph 5 of the Terms of Settlement does not, in the circumstances, alter an interest in property, it stands as part of an entire order which adjusts the interest of the parties in the whole of their property. The order does not cease to be an order pursuant to s.79 simply because one paragraph of the order provides that otherwise each party shall retain what they already have, because, as a whole, the entire order works as an alteration of property interests between the parties. It deals with all the personal chattels in the possession of a party as a collectivity, altering title in some cases, confirming title in others, but without the need to determine in relation to which chattels it is effecting an alteration of interest.
Senior Counsel for the husband submitted, and we accept, that it has, for unexplained reasons, been fashionable or traditional to use the word declaration in the context of this type of paragraph and that this has led to confusion as to the source of the exercise of power. However, it is not a declaration made pursuant to the provisions of s.78 and the use of the word “declared” so far as necessary or possible ought to be avoided. As we have said, the provision is one of several paragraphs or clauses in the s.79 order, not a declaration pursuant to s.78. In order to avoid any confusion, and make clear that it is a single exercise of power, we also accept the submission of Senior Counsel for the husband that it would be preferable that an order made pursuant to the provisions of s.79 expressly stated that it is by way of alteration of property interests pursuant to s.79 and thereafter set out where necessary in paragraphs or clauses, the relevant provisions of the order.
We now turn to consider whether the Court should include a paragraph or clause such as paragraph 5 of the Terms of Settlement in a s.79 order in circumstances where it does not effect an alteration of an interest in property.
In the written submissions of the husband it was said that the view has been put that merely declaratory provisions such as paragraph 5 of the Terms of Settlement should not be included in a s.79 order and that perhaps solicitors should exchange letters to clarify what property has been dealt with through the s.79 process. For reasons we have given, a provision such as paragraph 5 of the Terms of Settlement resolves the ownership of personal chattels in the possession of each spouse where an order for property alteration might in fact be needed to convert joint ownership into sole ownership, and an exchange of solicitor’s letters would not do this. We also agree that it may resolve any issue as to whether the Court had made a partial or interim property order.
In our view, it is not necessary, for reasons we have given, to include a paragraph or clause such as paragraph 5 of the Terms of Settlement in a s.79 order in circumstances where that paragraph or clause does not involve an alteration of interest. Ordinarily, following a contested hearing, a Judge would explain in his/her reasons the effect of the order and he/she would refer to the property of the parties in relation to which he/she proposed to alter an interest and also to the property of the parties in relation to which he/she did not propose to alter an interest. However we do not disagree with the submissions that it is desirable to provide certainty, finality and assurance to parties that all the property has been dealt with and to confirm the resolution of any doubts arising from any preliminary distributions and the separation of jointly held property by including a provision such as paragraph 5 of the Terms of Settlement in an order made pursuant to s.79, particularly where the order is not made following a contested hearing. In Minton v Minton [1979] AC 593 at 608 Lord Scarman stated that:
“The law now encourages spouses to avoid bitterness after family break-down and to settle their money and property problems. An object of the modern law is to encourage each to put the past behind them and to begin a new life which is not overshadowed by the relationship which has broken down. It would be inconsistent with this principle if the court could not make, as between the spouses, a genuinely final order unless it was prepared to dismiss the application.”

Superannuation – s.79 ‘Catch All’ Order

The next issue raised by the parties is whether a provision such as paragraph 5 of the Terms of Settlement which deals with superannuation may be included in a s.79 order and if so whether the provisions of Part VIIIB then apply. The issue relates to the circumstance where one or both of the parties has a superannuation interest and no alteration is sought or proposed to be made in relation to that interest under s.90MT(1). More specifically, the issue is whether the Court may include in an order a paragraph or clause of the ‘catch all’ type in relation to superannuation interests, in circumstances where it is intended that one or both parties will retain his/her superannuation interests and whether in those circumstances the provisions of Part VIIIB apply.
Firstly it was submitted by Senior Counsel for the husband, and by the Solicitor General that, apart from Part VIIIB, a provision such as paragraph 5 of the Terms of Settlement may include superannuation entitlements because a superannuation interest is property as defined in s.4 of the Act. They further submitted that prior to the commencement of Part VIIIB there was a misapprehension in relation to the manner in which superannuation was treated, namely it was treated as a financial resource and not as property. They further submitted that the reason why the Court normally dealt with superannuation as a financial resource was because of its peculiar nature, namely that it was inconvenient or usually unfair to deal with it on the same basis as other items of property and it was “difficult, if not impossible”, until the introduction of Part VIIIB, to value certain superannuation interests and “make orders effectively dividing superannuation interests”.
Further, they submitted that the rights of a member of a superannuation fund under the superannuation trust deed (or legislation) are a chose in action which is property, and to that extent superannuation interests have always been property within the definition of property in s.4(1) of the Act and thus amenable to the exercise of power pursuant to s.78 and s.79: Harris and Harris (1991) FLC 92-254; Evans and Public Trustee for the State of Western Australia as Legal Representative of Evans (1991) FLC 92-223; Wunderwald and Wunderwald (1992) FLC 92-315 and Stay v Stay (1997) FLC 92-751.
Senior Counsel for the husband submitted that, as was recognised in Harris and Evans, this approach derives considerable support from the analogy of the interests of a beneficiary in an unadministered estate dealt with by the Privy Council in Commissioner of Stamp Duties (Queensland) v Livingston (1965) AC 694 and the High Court in Official Receiver in Bankruptcy v Schultz (1990) 170 CLR 306. It was submitted that each of those cases recognised that a beneficiary under a will before the estate is fully administered has no beneficial interest in the underlying assets but has certain rights against the trustee to have the estate fully administered which is a chose in action and which is thus property. As Nygh J pointed out in Evans at 78,552, by analogy, it could be argued that ‘proceedings with respect to property of the parties’ includes a claim with respect to the interest of a member of a superannuation fund even though the value of the interest is not determined until after death. It was also submitted that the approach is analogous to the approach taken by the Full Court in Best and Best (1993) FLC 92-418 where the interest of a partner in a law firm was treated as property notwithstanding that the partnership was one which effectively made it a non-transferable interest. Again, as Nygh J said in Evans at 78,553, an interest is not necessarily deprived of the character of ‘property’ merely because it cannot be assigned. It was submitted that all of the cases support the proposition that the rights of a beneficiary under a superannuation trust deed (or legislation) are property apart from Part VIIIB but traditionally they have been very difficult to deal with. It was further submitted that therefore there is no difficulty in dealing with superannuation interests in the sense of specifying that each party will retain their superannuation entitlements. For this reason, it was submitted, a paragraph or clause such as paragraph 5 of the Terms of Settlement in a s.79 order could have included superannuation prior to the introduction of Part VIIIB. It was further submitted that once this is appreciated the difficulties occasioned by s.90MS “fade away” because it is clear that Part VIIIB was not intended to cut down on the powers that the Court had up to that point, but to provide additional flexibility in dealing with superannuation interests. This submission was supported by the Solicitor General.
We agree with the submission that Part VIIIB is intended to provide courts with greater flexibility in dealing with superannuation interests and to overcome many of the difficulties previously identified and that it supplements the other powers of the Court.

It was submitted on behalf of the husband that Part VIIIB does not have the effect that in every case in which a party has a superannuation interest, the Court must make a splitting order, even an order of the type referred to in the course of submissions as a ‘zero splitting order’. Senior Counsel for the husband submitted that it remains open to the Court to deal with a superannuation interest of a party in what he described as the traditional way under s.75(2), without making an order under Part VIIIB. This approach is said to be recognised by s.90MO which provides:
“(1) A court cannot make an order under section 79 with respect to a superannuation interest if:
(a)the superannuation interest is covered by a superannuation agreement that is in force; or
(b)the non-member spouse has served a waiver notice on the trustee under section 90MZA in respect of the interest; or
(c)a payment flag is operating on the superannuation interest.
Note: Under section 90MM, the court can terminate the operation of a payment flag in certain circumstances.
(2) Subsection (1) does not prevent the court taking superannuation interests into account when making an order with respect to other property of the spouses.”
It was further submitted that having regard to the provisions of s.90MO(2) it is not necessary to have resort to s.90MS to support the inclusion of a provision in a s.79 order which leaves a superannuation interest where it was before the order was made. Senior Counsel for the husband, however, did not clarify his submission relating to what he described as the “traditional approach”. Whilst we are conscious of the provisions of s.90MO, it was common ground that s.90MO(1) was not relevant to the facts and the issues raised.
Section 90MS(1) provides that in proceedings under s.79 the Court may ‘in accordance with this Division’ also make orders in relation to superannuation interests. The reference to ‘this Division’ is a reference to Division 3, which includes ss.90MS, 90MT, 90MU and 90MUA only.
Although, for obvious reasons, the definition of property in s.4 was not amended to include a superannuation interest or deem such an interest to be property, the effect of s.90MC is that in proceedings in relation to property under s.79 a superannuation interest is to be treated as property irrespective of whether or not a splitting or flagging order is sought or proposed to be made. As was submitted on behalf of the husband, the expression “treated as property” should be understood as meaning “treated as if it were property even though it is not” and that it should be so treated for the purposes of s.79. It was further submitted that the intention of the Parliament is clear from Note 1 to s.90MS. Because a superannuation interest is to be treated as property in s.79 proceedings it follows that it will be included in the list of property and valued at what is step one of the preferred four step approach to the determination of an application pursuant to s.79. At step three the superannuation interest may be taken into account, as are other items of property and financial resources, pursuant to the provisions of s.75(2) if the interest is relevant. The superannuation legislation introduced reforms which are directed to how a court will deal with a superannuation interest at steps one and four of the preferred four step approach in the determination of an application under s.79. The legislation did not amend s.79 or s.75.
For this reason, in our view, it is not necessary for us to resolve the issue raised by the submissions that a superannuation interest is property as defined in s.4(1) apart from the provisions of Part VIIIB. In our view, a provision such as paragraph 5 of the Terms of Settlement in an order made pursuant to s.79 may now include a superannuation interest.
The next issue relates to the effect of s.90MS(2) in circumstances where there is a superannuation interest but there is no proposal that that interest be altered.
In proceedings under s.79, if there is a superannuation interest, the Court may make an order in accordance with Division 3 of Part VIIIB, namely an order pursuant to s.90MT(1) or s.90MU. If such an order is sought or proposed to be made either by consent or in contested proceedings, it can only be made in accordance with Part VIIIB (see s.90MS(2)).
For the purposes of the issues raised by the submissions, the relevant provisions of Part VIIIB are s.90MZD(1) and ss.90MT(2) and (2A). Section 90MZD(1), which is in Division 5 of Part VIIIB, provides that the Court cannot make an order under that Part, which is expressed to bind the trustee of the eligible superannuation plan, unless the trustee has been accorded procedural fairness. A trustee is required to be given notice as a precondition to the trustee being bound by the order. Next, if an order is sought pursuant to s.90MT(1), then by reason of ss.90MT(2) and (2A), the Court must determine the amount (value) in accordance with the Regulations if they provide for the determination of an amount in relation to the interest.
Senior Counsel for the husband noted that s.90MS(1) uses the permissive word ‘may’ and submitted that the Court need not make an order in relation to a superannuation interest but if it did, that the alteration, because of s.90MS(2), should be in accordance with Part VIIIB. We agree with the submission made on behalf of the husband that if Parliament had intended that an order which did not alter the parties’ superannuation entitlements should be characterised as an order in relation to superannuation, then it would have used the word ‘must’. We also agree with the submission that Parliament did not intend to make the consideration of superannuation entitlements optional after 28 December 2002; it made splitting and flagging orders by the Court optional in property settlement proceedings in its consideration of the appropriate order. The effect of Part VIIIB is to enable the Court to make a splitting or flagging order in appropriate circumstances, not to compel the Court to make such an order.
We are further of the view that an order whereby an adjustment is made to other property having regard to the value of the superannuation interest is not an order “in relation to a superannuation interest.” The contrary view is that such an order is an order in relation to superannuation interests because those interests are being used as a ‘measuring stick’ for other rights. A discussion on this topic appears in a paper by Stephen Bourke, Orders under the New Super Splitting Laws referred to by May J in Crown and Yarnold [2003] FamCA 152. Bourke said:
“When the court makes an order adjusting other property of the parties rather than superannuation, it is submitted that this is an instance where the order could be characterised as being “in relation to” superannuation. It is in relation to superannuation because superannuation is used as a “measuring stick” for other rights, in this case being the right to the property adjusted for the superannuation. So the answer to the first question is “yes”.”
The argument was apparently approved by May J in Crown and Yarnold (supra) where her Honour states:
“98.It can only be said at this time that it is likely that an order adjusting property other than superannuation is still an order “in relation to” superannuation, given that the superannuation interest is used as a ‘measuring stick’ for the assessment of entitlement to other assets ...”
In so far as May J approved the “measuring stick” argument we do not agree. As was submitted on behalf of the husband, a provision such as paragraph 5 of the Terms of Settlement “does not in fact split the superannuation at all”. This view is reinforced by the object of Part VIIIB which is to allow splittable payments in respect of a superannuation interest to be allocated between the parties to the marriage.
We also accept the submission of the Solicitor-General that the words “in accordance with this Part” in s.90MS(2) mean “not inconsistent with.” There are contexts where “in accordance with” may mean something different and an example is the cases which talk about something being in accordance with a form. Clearly in accordance with a form means that the form must basically be followed and although there may be questions of degree, in general that is what it means. However, when the direction is in accordance with legislation, he submitted that it means not inconsistent with. In support of this submission the Solicitor General referred us to the decision of the High Court in Walker v Wilson (1991) 99 ALR 1 as an example of the words “in accordance with” having the meaning “not inconsistent with” and in particular the observations of Brennan J at p.5 and Deane, Dawson, Toohey and McHugh JJ commencing at p.10. We agree with the submission of the Solicitor General that the words “in accordance with this Part” in s.90MS(2) mean that a court cannot make an order under s.79 in relation to a superannuation interest in accordance with Division 3 that is inconsistent with Part VIIIB or, putting it a little differently, an order in accordance with Division 3 must be in accordance with Part VIIIB to the extent that Part VIIIB is applicable. However, if Part VIIIB is not applicable, there is no additional requirement. If the words “in accordance with this Part” are construed in that way it has a far more practical result.
The solicitor for the wife submitted that “the declaration” in paragraph 5 of the Terms of Settlement as it relates to superannuation is a splitting order as s.90MT(1)(a) and s.90MT(1)(c) contemplate a zero per cent in favour of the non-member spouse. He further submitted that it is possible to have an order under s.90MT(1) that leads to no payment to the non-member spouse. In Crown and Yarnold (supra) May J said:
“98.… For this reason, such an order falls within section 90MS and is subject to section 90MT, and before making a splitting order (albeit 100% to the member, 0% to the non-member) in relation to a superannuation interest, the court must determine the overall value of the interest in accordance with the regulations.”
Section 90MT(1)(a)(i) provides that the non‑member spouse is entitled to be paid the amount (if any) calculated in accordance with the Regulations (italics added). It was submitted that the words “if any” allow for the possibility of a zero base amount (s.90MT(4)). If the argument that orders which do not alter the superannuation interest are still orders in relation to superannuation is correct then the Court would have to find a way under Part VIIIB to make orders which do not split superannuation interests and this could only be done by making an order concerning a zero per cent base interest or a zero per cent percentage. Part VIIIB provides no obvious means of making an order which does not alter the parties’ respective entitlements to their superannuation interests, unless the view is accepted that the Court should make an order that the parties’ retain their respective superannuation interests by making a “splitting order” under s.90MT(1), which gives to the non-member spouse a zero per cent base interest or a zero per cent percentage. We are of the view that this is incorrect. A provision such as paragraph 5 of the Terms of Settlement does not split anything and is not a flagging order. It says nothing about allocating splittable payments in respect of a superannuation interest between parties (s.90MA). We also accept the submission on behalf of the husband that it would be an order without any practical effect, and Courts are loath to make these. This consideration is reinforced by the wording of s.79(2), which provides that the Court should not make an order for property alteration unless it is satisfied that it is just and equitable to make the order. An order which has no practical effect would not satisfy this test. Further, such an order would impose an obligation on the trustee of the superannuation fund to do paperwork to record the order. We do not accept that it was the intention of Parliament to impose upon the trustee a duty to engage in meaningless paperwork with no practical benefit.
The submission relied significantly on the words “if any” appearing in s.90MT(1)(a) and s.90MT(1)(c) as support for the possibility of a zero split of a superannuation interest being in the contemplation of the Parliament. We do not accept this. Firstly, the words “if any” appear in subsection (a) and (c) but not in subsection (b). That means that there could not be a zero split where there is a percentage split (s.90MT(1)(b)) but there could be a zero split where there is a base amount split (s.90MT(1)(a)). We agree with the submission of Senior Counsel for the husband that this does not make sense.
We also agree with the submission of the Solicitor General that the Parliament did not know at the relevant time what the Regulations would thereafter provide by way of formula for the purposes of s.90MT(1)(a). The Parliament therefore prudently took the view that one result of the application of the formula in an appropriate case might be zero and situations can be postulated in which that might happen, for example, after the allocation of a base amount to the non-member spouse the formula could have provided for the deduction of certain costs associated with the administration of a superannuation split before anything became payable. That might, in the odd case, have resulted in nothing being payable out of a particular splittable payment, or the amount allocated may have been affected by adverse movements in the whole superannuation fund, particularly in an accumulation fund, because in recent years it is not uncommon for superannuation funds to incur losses and it is conceivable that under a splitting order nothing may be payable under those circumstances. The application of the formula might produce the result of nothing payable and for those reasons the words “if any” should be seen as having been included for more abundant caution by the Parliament allowing for the possibility that the application of the formula to a particular set of facts might produce nothing. The important thing is that the words “if any” apply not to the base amount but the amount payable to the non-member after application of the formula. The legislation does not envisage that there could be a base amount of nil or a percentage split of nil. In conclusion, we do not accept that there can be a zero per cent splitting order.
If Parliament had intended that a valuation in accordance with the Regulations be mandatory even when a party is retaining only his or her existing superannuation interest, it could have easily said so and it did not. There are good reasons why Parliament did not do so. For example, the legislation does not require that valuations in accordance with the Regulations be obtained before making a binding financial agreement. Further, the legislation does not require that such valuations be obtained before the Court exercises the power which it has to alter interests in property, taking superannuation interests into account, as it does with other items of property and financial resources at step three of the preferred approach. The Solicitor General’s submission, which we accept, was that it would be surprising if parties were required to go through the exercise of valuation in every case in circumstances where there was no alteration to the interest sought or made. Although the order may be in relation to a superannuation interest there is no splitting order and thus no need for determination of an amount (valuation) in accordance with the Regulations. In those circumstances, the valuation may be as agreed by the parties. As Chisholm J said in Jovanovic and Jovanovic [2003] FamCA 34:
“…it is not common to require the parties to provide evidence of the value of particular assets, such as a business or a block of land, if the parties agree on its value. This is particularly so, perhaps, because s 79A makes provision for a party later to challenge an order that has been made in circumstances where the party was misled about the assets or their value.”
As to the requirement of procedural fairness to the trustee, a provision such as paragraph 5 of the Terms of Settlement does not affect the trustee in any way, it is not expressed to be binding on the trustee and thus there is no need for the trustee to be bound. In those circumstances there is no need for the purposes of s.90MZD to accord procedural fairness to the trustee.
If the superannuation interest is not to be altered in accordance with s.90MT(1), although the superannuation interest is to be treated as property for the purposes of s.79, the provisions of Part VIIIB (procedural fairness to trustee and valuation in accordance with the Regulations) do not have to be complied with. In our view, there is no splitting order if the Court simply leaves the superannuation interest where it is and awards the other party at step three of the preferred approach a greater share of the other property on account of the superannuation interest remaining where it is. It follows that a provision such as paragraph 5 of the Terms of Settlement dealing with a superannuation interest(s) in circumstances where it is intended that there be no alteration of the superannuation interest(s) may be included in a s.79 order and the mandatory obligations under Part VIIIB in relation to procedural fairness to the trustee and the determination of the amount (valuation) in accordance with the Regulations do not apply.

Power of Registrars

Both parties and the Solicitor General submitted that question 20 should be answered in the affirmative. For reasons we have given it is not necessary for us to deal with the issues raised by question 19.

Principles

Submissions were made on behalf of the wife and the husband that we should express a view as to whether the Court in exercising its discretion should normally insist on mandatory valuations for superannuation interests in particular types of funds, even in circumstances where no splitting order is sought. In our view, it is not appropriate that we express a view as suggested on behalf of the husband and the wife as to the appropriate material to be filed or placed before the Court where there is a defined benefit superannuation interest or where there may be unrepresented parties. In the instant case it was common ground that the relevant superannuation interests were accumulation interests and that such superannuation interests would not ordinarily be difficult to value. Further, in this case both parties were legally represented.
In our view, the High Court in Harris v Caladine (1991) FLC 92-217 made it clear that, where consent orders are sought by parties who are legally advised and are at arms length, nothing more is required than being satisfied of the bona fides of the consent, that legal advice has been given and that the parties have considered the relevant statutory provisions. Whether more is required depends on the circumstances of individual cases. We agree with the submission by Senior Counsel for the husband that an exercise of convincing the Court or Deputy Registrar of the propriety of the orders based on an analysis of each of the relevant statutory matters is not required in connection with the making of a consent order. For this reason, it is not appropriate that we attempt to lay down further guidelines as to what is required in making consent orders beyond what has been said by the High Court, simply because of the superannuation splitting laws.
We also agree with the submission of the Solicitor General in relation to question 22, namely that matters relevant to the making of a consent order pursuant to s.79 include the fact that the parties are legally represented and consent to the making of the order.

Costs

No application for costs was made on behalf of either party or the Attorney General.

Answers to the questions stated for the opinion of the Full Court

For the reasons stated above we would answer the questions as follows:

Question 1

Does s.78 grant the Court power to make the declaration in relation to property?

Answer

Not necessary to answer.

Question 2

If s.78 does grant the Court power to make the declaration in relation to property, should the Court make it?

Answer

Not necessary to answer.

Question 3

Does s.78 and/or s.90MS grant the Court power to make the declaration in relation to superannuation?

Answer

Not necessary to answer.

Question 4

If s.78 and/or s.90MS does grant the Court power to make the declaration in relation to superannuation, should the Court make it?

Answer

Not necessary to answer.

Question 5

Does s.78 grant the Court power to make the declaration in relation to resources?

Answer

Not necessary to answer.

Question 6

If s.78 does grant the Court power to make the declaration in relation to resources, should the Court make it?

Answer

Not necessary to answer.

Question 7

Does s.79 grant the Court power to make the declaration in relation to property?

Answer

Yes, particularly having regard to the provisions of s.80. Where the Court makes an order which alters the interest of a party or parties in property, that order may include a declaration in relation to certain of their property.

Question 8

If s.79 does grant the Court power to make the declaration in relation to property, should the Court make it?

Answer

Yes, in so far as it is desirable in the circumstances of the particular case. However, as a matter of law it is not necessary in so far as it does not purport to alter an interest.

Question 9

Does s.79 and/or s.90MS grant the Court power to make the declaration in relation to superannuation?

Answer

Yes. A provision such as paragraph 5 of the Terms of Settlement in a s.79 order may include a superannuation interest.

Question 10

If s.79 and/or s.90MS does grant the Court power to make the declaration in relation to superannuation, should the Court make it?

Answer

Yes, in so far as it is desirable in the circumstances of the particular case. However, as a matter of law it is not necessary in so far as it does not purport to alter an interest.

Question 11

Does s.79 grant the Court power to make the declaration in relation to resources?

Answer

Not necessary to answer.

Question 12

If s.79 does grant the Court power to make the declaration in relation to resources, should the Court make it?

Answer

Not necessary to answer.

Question 13

If the Court should otherwise make the declaration under s.78 and/or s.90MS in relation to superannuation, must the Court make a determination under s.90MT(2) before making the declaration?

Answer

Not necessary to answer.

Question 14

If the Court should otherwise make the declaration under s.79 and/or s.90MS in relation to superannuation, must the Court make a determination under s.90MT(2) before making the declaration?

Answer

No.

Question 15

If the Court should otherwise make the declaration under s.78 and/or s.90MS in relation to superannuation, must the Court be satisfied that the trustee of any relevant superannuation interest has been accorded procedural fairness before making the declaration?

Answer

Not necessary to answer.

Question 16

If the Court should otherwise make the declaration under s.79 and/or s.90MS in relation to superannuation, must the Court be satisfied that the trustee of any relevant superannuation interest has been accorded procedural fairness before making the declaration?

Answer

No.

Question 17

If the Court can and should make the declaration under s.79 in relation to property, but cannot or should not make the declaration under s.79 and/or s.90MS in relation to superannuation, then must the Court make a determination under s.90MT(2) before making the declaration in relation to property?

Answer

Not necessary to answer.

Question 18

If the Court could not or should not make the declaration under s.79 in relation to property, should the Court have made the orders and notations on 5 March 2003 without making a determination as to the value of the parties’ respective interests in superannuation under s.90MT(2)?

Answer

Not necessary to answer.

Question 19

If s.78 does grant the Court power to make the declaration in relation to property, can the jurisdiction be exercised by a Registrar, relying upon Order 36A rule 2(m) of the Family Law Rules?

Answer

Not necessary to answer.

Question 20

If s.79 does grant the Court power to make the declaration in relation to property, can the jurisdiction be exercised by a Registrar relying upon Order 36A rule 2(m) of the Family Law Rules?

Answer

Yes.

Question 21

If the Court is able to grant the declaration in relation to property and/or the declaration in relation to superannuation and/or the declaration in relation to resources, what other principles should it apply in considering whether to do so?

Answer

Depending on the circumstances of each individual case, the principles to be applied by the Court in making an order by consent pursuant to s.79 are identified in Harris v Caladine (1991) FLC 92-217.

I certify that the preceding 97 paragraphs
are a true copy of the reasons
for judgment delivered by
this Honourable Full Court.

Associate