Holmes, R.E. and Holmes, S.M.

[1988] FamCA 3

In the marriage of HOLMES, R.E. and HOLMES, S.M.

(1988) FLC ¶91-944

Other publishers' citations: (1988) 12 FamLR 331 (1988) 92 FLR 290

Full Court of the Family Court of Australia at Brisbane.

Judgment delivered 29 June 1988.

Before: Fogarty, Murray and Frederico JJ.

Fogarty, Murray and Frederico JJ.: By notice of appeal dated 20 January 1988 the appellant husband appealed against orders which were made by Bulley J. on 21 December 1987 after a trial before him on 25 November 1987. Those orders provided that ``by way of alteration of property interests and maintenance'' the husband pay to the wife the sum of $60,000 within 28 days.

The findings of facts made by the trial Judge were not the subject of challenge before us and may for present purposes be summarised as follows.

The parties were born in England and commenced to live together in 1974 and married on 21 August 1976. The wife had previously been married and there were three children of that marriage, they being born in 1962, 1963 and 1966. Those children formed part of the household of the parties in these proceedings and after the marriage they were adopted by the parties. The husband had also been married previously and it would appear that there was one child of that marriage.

The parties migrated to Australia with the three children in 1978. They finally separated in July 1985 but had previously been separated for a short time in 1982 and between the months of July and December 1983. Their marriage was dissolved by decree nisi which was granted on 22 December 1986. Between 1978 and the separation in 1985 the parties lived at various times in Victoria and in Queensland but at the time of the separation both of them lived in Queensland.

In his judgment the trial Judge set out in detail the wife's history of work outside the home. For the purposes of this case it is unnecessary to repeat that; it is sufficient to say that the wife worked outside the home for the vast majority of that seven year period. After separation she continued in employment until 1987 when she suffered an injury at work. At the time of the trial she was still unemployed and suffering from some health problems. The trial Judge concluded in relation to her future employment prospects as follows:

``On the other hand the wife, although she has some qualifications in the workforce and although she has a significant amount of experience in it, has health problems which restrict her capacity to earn income from gainful employment. On balance it seems she will return to the workforce: however, her health problems will probably not allow her employment to be continuous by any means and her income will probably be moderate. Unlike the husband, she does not have any capital source to rely upon.''

That last sentence is a reference to the circumstance that the wife did not have any property or any other sources of income aside from her work capacity. At the time of the trial her age was 43, and she was living with two of her three adult children, both of whom were in employment and assisting her financially.

At the time of the trial the wife had no assets. The car which she had previously owned had been repossessed and she owed $1,000 on that. In addition she had debts of $2,500 on a credit card and $6,500 legal costs.

The husband was in continual employment from the time of his arrival in Australia in 1978 until April 1982. For the last two years of that period he was a seaman and his income in 1982 was $32,000 per annum.

In early 1982 the husband sustained serious injuries in the course of his employment. Those injuries included a compound fracture of the skull, brain damage, and impairment of vision and memory. He has not been in employment since and the trial proceeded upon the basis that the accident rendered him unemployable on a permanent basis.

The husband was in hospital for a month after the accident. He then returned to the parties' home where he was able to care for himself within the home. For the period that the husband was in hospital the trial Judge described the relationship between the parties in the following terms:

``During the time the husband spent in hospital the wife was at his side. The first two weeks she remained at his side continuously and lived at the hospital constantly changing his bandages and massaging his hands. During the balance of his hospitalisation she was with him all day, spending the nights with the children.''

From April 1982 until April 1984 the husband continued to receive his pre-accident income which was approximately $750 per week net and this was applied together with the wife's income towards joint obligations.

In Easter 1983 the parties sold the home in Melbourne which they were purchasing. The net proceeds were approximately $5,000. Each party received approximately $500 from that. It would appear that the balance was applied to meet family debts. The parties then moved into rented accommodation. It would appear that about that time their relationship began to deteriorate. Between June and December 1983 the husband was at a rehabilitation centre for the purposes of determining whether he could be rehabilitated for employment. During that time he declined the opportunity to make home visits and had, it would appear, formed the intention that the parties should separate.

During this period the husband made arrangements for his income to be paid into his personal account and he paid the wife initially $250 per week, which he later reduced to $100 per week. In September 1983 the wife obtained a maintenance order for herself and the youngest child for a total of $100 per week. The husband complied with this order until December 1983 at which time the parties resumed cohabitation in Queensland.

In April 1984 the husband ceased to receive his salary equivalent and thereafter received workers' compensation payments of $330 per fortnight. In mid-1984 the husband received $50,000 being his superannuation entitlement from the Seamen's Union Retirement Fund. That sum was expended in a relatively short time and before the parties separated. The details of that were described by the trial Judge as follows:

``Reverting to the $50,000 superannuation entitlement from the Seamen's Union Fund, it is to be noted that this sum was all spent by the husband over quite a short period of time. A number of expensive chattels and pieces of furniture were bought for the home, a car was bought for each of the parties and one of their sons and the moneys were otherwise spent on family purposes. The husband's list as set out in para. 11 of his affidavit filed 16 January 1986 whilst not entirely accurate gives a generally fair picture as to how the $50,000 was expended. It was certainly all spent by the time the marriage came to an end.''

From the time the parties went to Queensland until March 1985 the husband was the sole financial supporter of the family but from that time wife returned to employment and both contributed to the support of the home. As previously indicated the parties finally separated in July 1985.

After separation the husband continued in occupation of the rented former matrimonial home. In 1986 his workers' compensation payments were increased to $416 per fortnight.

The most significant aspect of this case arises from the following circumstance. During 1984 the husband instituted a common law action for damages in the Supreme Court of Victoria arising out of the accident in April 1982. During 1987 that action was settled for the sum of $300,000 plus costs. In addition a further sum of $93,000 was paid by the defendant on the husband's behalf in respect of medical expenses, rehabilitation costs and refund of workers' compensation payments. The $300,000 was not paid directly to the husband or those acting for him, but was the subject of an order of the Supreme Court of Victoria of 16 June 1987 in the following terms:

``Within 14 days of this date the defendant pay into Court the sum of $300,000, such sum to be invested by the Senior Master on behalf of the plaintiff.''

We will defer outlining the circumstances in which that order arose and the consequences of it which are relevant to these proceedings until we complete the factual history in this case.

The moneys in question were paid into Court and invested by the Senior Master and the husband has been receiving an allowance therefrom of $250 per week. This represents his only source of income. In 1987 the husband returned to England for a visit. During that time he resumed association with his first wife and their child, a girl now aged 16. The trial Judge described the consequences of that in the following terms:

``Mr Holmes intends to return to England to remarry his first wife and to support her and [their child]. He intends to return to England for this purpose as soon as possible. He would live in England. He says he has written to the Senior Master of the Victorian Supreme Court seeking that the fund of $300,000 be sent to England for him: he has had no reply to date.

[His first wife] is an invalid pensioner. She is paying off her home in which she has been living for five/six months. She has no other property. [Their child] is in her final year of school.''

At the time of the trial the husband was aged 44, his earning capacity was described by the trial Judge as ``negligible'', and his only source of income was the payment of $250 per week by the Supreme Court. He lived in boarded accommodation for which he pays $100 per week and he has no assets other than his interest in the Supreme Court fund.

Those were the facts before the trial Judge. The actual proceeding was a property and maintenance application which the wife instituted in December 1985. It had been instituted prior to the Supreme Court judgment in 1987 but after those proceedings had been instituted, and was clearly instituted in anticipation of a judgment in that proceeding.

The trial Judge identified the critical issue in this case in the following terms:

``It is not in dispute in the final analysis that only the $300,000 fund being administered by the Senior Master in the Victorian Supreme Court could be categorised as `property' within the meaning of that term as used in the Family Law Act. There is no other possible `property' available for distribution. Thus if it is found, as is argued on the husband's behalf, that the fund does not constitute `property' of the husband then the wife's application for an alteration of property interests must fail.''

The approach which the trial Judge adopted was to proceed upon the assumption that the fund did constitute ``property'' of the husband and determine the wife's claim on that basis, and then to consider the issue whether or not it was his property.

The appeal was argued before us on much the same basis and it is convenient to deal with the issues in that order.

The trial Judge in his consideration of the wife's application summarised the facts as he had found them and concluded in relation to the issue of contribution as follows:

``In all these circumstances then I consider that each party in various ways contributed and performed in the relationship to the best of their respective capacities and did well. I am unable to separate the efforts of each on a comparison basis.''

His Honour then went on to consider the present and future financial circumstances and other relevant factors under sec. 75(2) and concluded on balance that the wife would return to the workforce but that:

``... her health problems will probably not allow her employment to be continuous by any means and her income will probably be moderate. Unlike the husband she does not have any capital resource to rely upon.

In terms of future disparity of income on a regular basis then, the wife's situation falls well short of the husband and so enhances her claim to a share of the husband's $300,000.''

His Honour's final conclusion was:

``Taking into account the contribution during the marriage, events since then, and this prognostication of the future, doing the best I can I would assess the wife's entitlement to the $300,000 at $60,000.''

Counsel for the appellant husband, made his submissions on this aspect under two broad headings. He submitted firstly that the discretion of the trial Judge had miscarried in that he failed to take into account or give proper weight to significant factors and/or had given excessive weight to other factors and that as a consequence the exercise of discretion had miscarried; alternatively, he submitted that the order was ``unreasonable or plainly unjust'': as to which see generally House v. The King (1936) 55 C.L.R. 499 at p. 504 and Norbis v. Norbis (1986) FLC ¶91-712 at p. 75,165.

As to the former of those submissions, counsel for the husband did not challenge the trial Judge's conclusion that there had been during the course of the marriage an equal contribution by the parties to the marriage and the household. He submitted that the trial Judge had failed to take into account the circumstance that the wife had made little or no contribution to the Supreme Court fund and failed to give consideration to its origins: see O'Brien and O'Brien (1983) FLC ¶91-316 and Williams and Williams (1984) FLC ¶91-541 (Full Court): Williams v. Williams (1985) FLC ¶91-628 (High Court). He submitted that although the injury had occurred approximately three years before the separation and the wife had made contributions to the husband's recovery and general personal circumstances from then until at least 1985 the award was not made until after the parties had separated and divorced. He submitted that although the judgment did not indicate its components, it was unlikely that any significant portion of it related to past economic loss (having regard to the additional $93,000 in relation to past medical expenses and workers' compensation payments). Accordingly he submitted that it was likely that the substantial portion of the judgment related to pain and suffering and future economic loss.

He further submitted that after the husband had been discharged from hospital, he was able to look after himself within the home and consequently the contribution by the wife to this aspect was less than it might otherwise have been. He argued that there was nothing to suggest that, apart from this accident, the parties had any anticipation of receiving a large sum of money during their marriage (other than the husband's interest in the superannuation fund). He further submitted that although the future financial needs of the wife were not as secure as those of the husband, it was expected that she would be able to return to work and support herself. In the event he submitted that factors favourable to the wife had to be balanced against the source and probable composition of the fund.

The difficulty about these submissions from the appellant's point of view is that it appears quite clearly from the judgment that the trial Judge was conscious of them and took them into account. The trial Judge was painstaking in setting out the relevant detail and although he did not refer to these aspects specifically in the latter part of his judgment when he came to award the amount of $60,000 it is we think impossible to conclude that the trial Judge was not fully conscious of them or had not taken them into account in arriving at his decision. They were facts which were to the forefront of the case, the trial Judge had carefully identified them and it is, we consider, not possible to conclude that he did not take them into account in his final conclusions.

The consequence of that view is that the arguments of counsel for the husband come down to the question of the weight to be attached to these factors. That really leads to the second submission of counsel for the husband, namely that the order was ``unreasonable or plainly unjust''. That is, that the order fell outside the range of a proper exercise of discretion. In this regard counsel for the husband submitted that the maximum that the trial Judge could reasonably have ordered was $30,000.

Counsel for the respondent wife submitted that it was clear from the lengthy and detailed judgment that the trial Judge had had regard to these factors and that it was a unique case in which, of necessity, a wide discretion existed as to the appropriate order.

The facts of this case are unusual and it is difficult to usefully compare them with the more general run of cases which are litigated in this Court under sec. 79. We agree with counsel for the wife that of necessity a trial Judge in a case of this sort has a wide discretion as to the appropriate order. It is sufficient for our purposes to say that we are far from convinced that the order fell outside the range of a reasonable exercise of discretion in the facts of this case.

As a further argument counsel for the husband submitted that as the husband had no present personal ability to meet the order and it could only be paid out from the fund pursuant to an order of the Victorian Supreme Court, this was a relevant consideration both as to the question whether any order should be made, and as to the amount of any order. He further submitted that a consequence of the sec. 79 order being met would be to reduce the corpus of the fund invested on behalf of the husband with a consequent impact upon the income which may be derived from that.

It is, we think, preferable to consider these latter submissions after we have considered the Victorian legislation and Rules.

We turn then to the major issue which was argued before us on the hearing of this appeal as it was before the trial Judge. It was the submission of the husband that the fund invested in the Supreme Court was not ``property'' to which sec. 79 of the Family Law Act applied. Counsel for the husband's submission was in effect that the interest of the husband in the fund was akin to, or analogous to, that of the interest of a beneficiary in a discretionary trust and was not his ``property''.

In order to understand that issue it is necessary to turn to the relevant Victorian legislation and the Rules of the Supreme Court of Victoria. However before we do that we should turn firstly to the definition of ``property'' in the Family Law Act. That is contained in sec. 4(1) and provides as follows:

```Property', in relation to the parties to a marriage or either of them, means property to which those parties are, or that party is, as the case may be, entitled, whether in possession or reversion.''

The significance of that is that sec. 79 is confined to proceedings ``with respect to the property of the parties'' and an order under that section may only be made ``altering the interests of the parties in the property''. See generally Kelly and Kelly (No. 2) (1981) FLC ¶91-108. Although the wife's application sought orders by way of ``property settlement and lump sum maintenance'', it was conducted before the trial Judge and before us as a proceeding confined within the ambit of sec. 79, and this is so notwithstanding that the order of $60,000 was described as being ``by way of alteration of property interests and maintenance of the parties''. The reference to ``maintenance'' is, it appears, to be understood as a reference to the sec. 75(2) components of an order under sec. 79(1) (see sec. 79(4)(e)) and sec. 81. It was not suggested before us (or before the trial Judge) that the order, or any portion of it, was justified as an exercise of power under sec. 72.

From early in the history of legislation the term ``property'' has been accorded a wide meaning. The concept was discussed in detail in the judgment of the Full Court in Duff and Duff (1977) FLC ¶90-217. The Full Court, after an examination of the history of the matter, said this at pp. 76,132-76,133:

``It seems unnecessary to attempt to set out a catalogue of what `property' may include in the context of sec. 79. It is sufficient for the purposes of this case to say that `property' means property both real and personal and includes choses in action.''

The Full Court then referred to a number of authorities and adopted the view expressed by Langdale M.R. in Jones v. Skinner (1835) 5 L.J. Ch. 90 that:

``Property is the most comprehensive of all terms. It can be used in as much as it is indicative and descriptive of every possible interest which the party can have.''

The Full Court then continued as follows:

``We are of the view that the intention of sec. 79 is to enable the Court to take into account and assess all the property of the parties upon being asked by either of them to make an order altering the interests of the parties in property. We are further of the view that when sec. 4 defines property as being `property to which the parties are entitled whether in possession or reversion' the words `whether in possession or reversion' are not intended to indicate that the kind of property with which this Act can deal must be property to which a party is entitled in possession or reversion but rather the phrase `whether in possession or reversion' is, as a matter of grammar, an adverbial phrase which qualifies the word `entitled'. The phrase means that the entitlement to the property may be either in possession or reversion; i.e. the phrase is descriptive of the entitlement and not of the property and it removes any fetter upon the Court in dealing with property under this Act by limiting the nature of the entitlement thereto to entitlement in possession.''

That approach has been consistently adopted in this Court and we see no reason to depart from it. There are of course limits, as, for example, the various superannuation cases such as Crapp and Crapp (1979) FLC ¶90-615, Bailey and Bailey (1978) FLC ¶90-424 and Public Trustee (S.A.) and Keays (1985) FLC ¶91-651 demonstrate.

We turn then to the Victorian legislation and Rules of Court.

Section 60A of the Supreme Court Act 1986 is the section under which the order of 16 June 1987 was made, namely that the $300,000 to be paid into Court ``be invested by the Senior Master on behalf of the plaintiff''. That section, under the heading ``Payment to Incapable Persons'' is in the following terms:

``Payment To Incapable Persons

60A(1) In a proceeding in which a sum of money has been awarded to, recovered by or agreed to be paid to or for a person who, in the opinion of the Court, is incapable by reason of injury, disease, senility, illness or physical or mental infirmity of managing his or her affairs, the Court may at any time order that the whole or a part of that sum —

(a) be paid into court and together with any dividend and interest be —

(i) invested by the Senior Master; or
(ii) transferred to such trustees as the Court directs; or

(b) be paid to trustees —

and be held or applied on and for such trust and in such manner as the Court directs.

(2) The Court must not make an order under sub-section (1) unless not more than 14 days before the making of the order two legally qualified medical practitioners have examined the person concerned apart from each other and separately expressed the opinion to the Court that for a reason mentioned in sub-section (1) that person is incapable of managing his or her affairs.

(3) The Court may at any time revoke or vary an order made under sub-section (1).''

Section 113 of the Supreme Court Act, under the heading ``Common Funds'' then takes up the position with detailed provisions as follows:

``113(1) Subject to section 66 of the Guardianship and Administration Board Act 1986, all money paid into court under an order of the Court or under any Act or the Rules is to be held by the Senior Master.

(2) In addition to Common Fund No. 1 and the other Common Funds established before the commencement of this Act by or under the Supreme Court Act 1958, there may be established, by and in accordance with the Rules or under sub-section (26), more Common Funds, each to be identified by an appropriate distinguishing number.

(3) Unless the Senior Master otherwise determines, no money is to be invested in Common Fund No. 1 after the commencement or this Act.

(4) Money held by the Senior Master, including money forming part of a Common Fund, may be invested —

(a) on deposit with the State Bank of Victoria; or
(b) on deposit with the Public Trustee for investment in the Common Fund established under the Public Trustee Act 1958; or
(c) on deposit in the Cash Management Account established under the Public Account Act 1958; or
(d) in any manner in which trust money may be invested by a trustee under the Trustee Act 1958 or any other Act.

(5) Money forming part of a Common Fund may be invested in any class of investment authorised under the Rules.

(6) Subject to the Rules and to any order of the Court, the Senior Master must transfer any money received by the Senior Master on behalf of any person, estate or trust to a Common Fund, unless the Senior Master considers it desirable for any special reason to invest it on separate account.

(7) Investments made from money forming part of a Common Fund are not made on account of, and do not belong to, any particular person, estate or trust.

(8) Subject to sub-section (26), the Senior Master must cause to be kept in the books of the Senior Master an account showing at all times the current amount held by the Senior Master or at credit in a Common Fund on behalf or account of each person, estate or trust and of any investments made of the money of a Common Fund or on behalf of a person, estate or trust.

(9) The Senior Master may sell or call in investments belonging to a Common Fund and may withdraw any of the money forming part of a Common Fund if necessary in the performance or his or her duties or the exercise of his or her powers and authorities.

(10) The Senior Master may at any time withdraw from a Common Fund any amount at credit in the Common Fund on the account of any person, estate or trust and may invest that amount on separate account or transfer it to another Common Fund.

(11) Amounts withdrawn from a Common Fund cease, from the date of withdrawal, to have any claim for interest or otherwise from the Common Fund.

(12) Unless otherwise expressly provided by the rules under which a Common Fund is constituted —

(a) no capital appreciation or depreciation in the value of any investments made or taken to have been made from a Common Fund are to be taken to increase or diminish the amount at credit in the Common Fund on the account of any person, estate or trust; and
(b) on the withdrawal from the Common Fund of any amount transferred to it, the person, estate or trust in question is entitled to be credited with the actual amount so transferred without regard to any capital appreciation or depreciation.

(13) Interest received from the investment of money forming part of a Common Fund is to be paid into an account to be called the `Interest Suspense Account' of that Common Fund and to be allocated as provided in sub-section (14).

(14) On each amount at credit in a Common Fund interest at the appropriate rate fixed from time to time by the Senior Master, with the approval of the Chief Justice, must at such times and intervals as are prescribed by the Rules be allocated and paid out of the Interest Suspense Account of that Common Fund to the credit of the person, estate or trust entitled for the time being to the interest.

(15) The Senior Master, with the approval of the Chief Justice, may fix different rates of interest according to —

(a) the source and nature of the different amounts transferred to a Common Fund;
(b) the periods for which those amounts will probably remain in the Fund;
(c) such other factors as they consider relevant.

(16) At such time or times in each year as the Senior Master determines, such amount of the money at credit in each Interest Suspense Account as the Senior Master considers necessary must, after providing for all interest payable to the credit of persons, estates and trusts, be carried to the credit of an account to be called the `Common Funds Guarantee and Reserve Account'.

(17) All capital profit made on the realization of investments from a Common Fund must also be carried to the credit of the Common Funds Guarantee and Reserve Account.

(18) Money standing to the credit of the Common Funds Guarantee and Reserve Account may be applied for all or any of the following purposes:

(a) Payment to a Common Fund of an amount equivalent to any capital loss incurred on realization of any investment made from the Common Fund;
(b) Payments of any costs and expenses incurred in protecting investments made from a Common Fund;
(c) Payments of such other costs, expenses and charges incurred in respect of a Common Fund or investments made from a Common Fund as in the opinion of the Senior Master are properly chargeable against the Common Funds Guarantee and Reserve Account.

(19) Any money standing to the credit of the Common Funds Guarantee and Reserve Account which is not for the time being required for any of the purposes referred to in sub-section (18) may be invested —

(a) in any manner in which trust money may be invested by a trustee under the Trustee Act 1958 or any other Act; or
(b) on deposit with the State Bank of Victoria —

and all interest received from that investment must be paid into the Common Funds Guarantee and Reserve Account.

(20) If it appears to the Senior Master that the amount standing to the credit of the Common Funds Guarantee and Reserve Account on 1 June last past (after allowing for all ascertained and known contingent liabilities of that Account) is in excess of 1% of the amount to the credit of the Common Funds on that day, the Senior Master may pay out of that Account into the Interest Suspense Accounts of the Common Funds such amount as is in excess of that 1% as the Senior Master thinks fit and in such proportions as he or she thinks fit.

(21) If it appears to the Senior Master that the amount of capital gains transferred to the Common Funds Guarantee and Reserve Account for the period of 12 months ending on 31 May in each year (after allowing for all ascertained and known contingent liabilities of that Account) is in excess of 0.10% of the amount to the credit of the Common Funds on that day, the Senior Master may, until the amount standing to the credit of that Account on 1 June next reaches 1% of the amount to the credit of the Common Funds on that day, pay out of that Account into the Interest Suspense Accounts of the Common Funds such amounts as is in excess of that 0.10% as the Senior Master thinks fit and in such proportions as he or she thinks fit.

(22) Any amount paid into an Interest Suspense Account under sub-section (20) or (21) is to be allocated from that Account in the same manner as interest received from the investment of the money forming part of the Common Fund.

(23) If at any time a Common Fund is insufficient to meet a proper claim on it, the amount of that claim, so far as it cannot be met from the Common Fund, must be paid out of the Consolidated Fund, which is hereby to the necessary extent appropriated accordingly.

(24) In order to admit of the money in a Common Fund being kept closely invested, the Senior Master may obtain advances to the Common Fund from any bank by the deposit by way of equitable mortgage of any securities held by the Senior Master in respect of investments from the Common Fund.

(25) The aggregate amount of advances made to the Common Funds by any banks and outstanding at any one time must not exceed $1 000 000.

(26) Subject to the Rules, the Senior Master may, with the consent of the Treasurer and the Chief Justice, enter into arrangements with the Public Trustee or the State Bank of Victoria for or with respect to all or any of the following matters:

(a) To undertake the management and investment of money held by the Senior Master;
(b) To maintain the accounts required to be kept by sub-section (8);
(c) The establishment and management of one or more Common Funds in which money held by the Senior Master may be invested.''

Section 113 refers to sec. 66 of the Guardianship and Administration Board Act 1986. That section provides as follows:

``66(1) If in any civil proceedings before a Court the Court considers that a party may need to have a guardian or administrator or both appointed under this Act, the Court may refer the issue to the Board for its determination.

(2) A referral under this section has effect as if an application had been made to the Board under section 19 or 43.

(3) If in any civil proceedings before a Court it is adjudged or ordered that money be paid to a person with a disability (whether or not that person is a party to a cause or matter) the money —

(a) is to be paid into court; and
(b) unless the Court otherwise orders is to be paid out to the administrator (if any) of the estate of that person or the Public Trustee.

(4) If any money —

(a) is paid into court before or after the commencement of this section; and
(b) the money is being held in court on behalf of a person with a disability —

the Court may by order direct that the money be paid out to the administrator (if any) of the estate of that person or the Public Trustee.

(5) Where the Court adjudges or orders that property (whether real or personal) be delivered up or transferred to a person with a disability (whether or not that person is a party to a cause or matter), the Court —

(a) may order that the property be delivered up or transferred to the administrator (if any) of the estate of that person or the Public Trustee; and
(b) may give any directions for the service of the order on that administrator or the Public Trustee as it thinks fit.

(6) If an order under sub-section (5) is served on an administrator or the Public Trustee, the administrator or the Public Trustee must accept delivery or transfer of the property to which the order relates and the acceptance of the property is a sufficient discharge to the person delivering or transferring the property.

(7) A copy of any order made under this section must be given by the administrator or the Public Trustee (as the case may be) to the Board and the Public Advocate.

(8) An order of the Court under this section that money be paid out to an administrator (if any) of the estate of a person or the Public Trustee has effect as if it were an administration order.

(9) In this section `Court' means —

(a) the Supreme Court; or
(b) the County Court.

(10) The Supreme Court Act 1958 is amended as follows:

(a) Section 79B is repealed;
(b) In section 189(1) after `(1)' insert `Subject to section 66 of the Guardianship and Administration Board Act 1986,'.

(11) Section 54B of the County Court Act 1958 is repealed.''

The Rules of the Supreme Court suggested to be relevant to the issue in this case are firstly O. 15 r. 9, which is as follows:

``(1) This Rule applies where —

(a) a person under disability is required by a judgment to pay money;
(b) money stands in court to the credit of that person or that person has a beneficial interest in money or funds in court; and
(c) under these Rules, the Court may, on the application of the person entitled to enforce the judgment, order that the money in court or so much thereof as is sufficient to satisfy the judgment be paid to that person or, as the case may be, make an order imposing a charge on the beneficial interest of the person under disability in the money or funds in court to secure the payment of the sum due under the judgment.

(2) In determining whether to make an order for payment or an order imposing a charge, as the case may be, the Court shall have regard to the fact that the person liable under the judgment is a person under disability, the purpose for which payment of the money or funds into court was made and the purpose for which the money or funds are held.''

``Person under disability'' is defined in O. 15 r. 1 to include:

``a person who is incapable by reason of injury, disease, senility, illness or physical or mental infirmity of managing his affairs in relation to the proceeding.''

Finally there is O. 79 r. 2 and 4 which are in the following terms:

``2(1) This Rule applies where money is paid into court under an order of the Court.

(2) Subject to paragraph (3), money paid into court and any interest allocated or received in respect thereof shall not be paid out except by order of the Court.''

Subrule (3) has no relevance and the power under subrule (2) may be exercised by a Master.

``4(1) Where an order is made that money be paid into court for the benefit of a person under disability, the party who obtains the order shall as soon as practicable procure its authentication in accordance with these Rules.

(2) As soon as practicable after authentication —

(a) the party obtaining the order shall serve a copy on the party ordered to pay into court;
(b) the Prothonotary shall forward a copy to the Senior Master's clerk.

(3) The party ordered to pay into court shall pay the money to the Senior Master and within seven days of the payment serve on the party who obtained the order notice in writing of the payment.''

The basal provision in this scheme is sec. 60A. There are three relevant aspects of it, namely (a) that it relates to a ``proceeding'' in that Court (b) the proceeding is one in which a sum of money has been ``awarded to, recovered by, or agreed to be paid to or for a person'' and (c) that person is in the opinion of the Court ``incapable... of managing his or her affairs'' by reason of the matters referred to in that section.

In those circumstances the court may at any time order that the whole or part of the sum be paid into court to be ``invested by the Senior Master or transferred to such trustees as the Court directs'' or, as an alternative to payment into court be ``paid to trustees''. On the happening of any such event such money is to be ``held or applied on and for such trust and in such manner as the Court directs''. Section 60A(3) empowers the court at any time to ``revoke or vary'' any such order.

The components of that section are not without significance to the matter which we have to determine, in particular the following:

(a) The section may operate in a case where the amount has already been awarded to or recovered by the plaintiff, or it may operate (as it apparently did here) where there has been an agreement to settle the action but the moneys have not in fact been paid over.
In the former situation it would operate in a case where the money had already been received by or on behalf of the plaintiff in circumstances where one would readily conclude that at that point it was the ``property'' of the plaintiff.
(b) The court may make that order ``at any time'', that is, the section is not confined in its operation to the time when judgment in the action is entered.
(c) The order may apply to ``the whole or a part of'' the relevant sum.
(d) The section gives to the court a number of options, no doubt to be moulded to the particular circumstances of the individual case. Under subpara. (a) the court has two alternatives. It must in either event direct the money to be paid into court but thereafter it may order that the money be ``invested by the Senior Master'' or ``transferred to such (other) trustees as the Court directs''.
The other alternative is that it may, instead of ordering the money to be paid into court at all, order it to be paid directly to trustees, that is, trustees for the plaintiff.
(f) Whichever of those three courses the court elects to adopt, the money in question is, under the section, to be ``held or applied on and for such trust and in such manner as the Court directs.''
Section 113(1) might be thought to be inconsistent with one aspect of sec. 60A in that it provides that ``all money paid into Court under an order of the Court'' is ``to be held by the Senior Master''. One need not be concerned with that aspect here. In this case the order was that the money be paid into court ``on behalf of the plaintiff''.

Section 113 then operates and provides by subsec. (1) that (subject to sec. 66 of the Guardianship and Administration Board Act) ``all money paid into court under an order of the Court... is to be held by the Senior Master''. The legislative scheme provides in detail for the investment of such money, its administration, and the payment out of amounts to, or for the benefit of, the person concerned as thought to be appropriate. It is unnecessary to refer to the detail of that but the following aspects of sec. 113 appear especially relevant to the issues in this case:

1. Subsections (4) and (5) provide for the investment by the Senior Master in appropriate trustee investments.
2. Each of the Common Funds is composed of moneys which may come from orders relating to a number of different persons. Subsection (7) provides that ``investments made from money forming part of a Common Fund are not made on account of, and do not belong to, any particular person, estate or trust''.
3. On the other hand subsec. (8) provides that the Senior Master must cause to be kept an account ``showing at all times the current amount held... on behalf of or account of each person, estate or trust''.
4. Subsection (12) deals with the issue of any capital appreciation or depreciation of any investment (as to which see also subsec. (17)-(23)).
5. Subsection (14) requires interest at appropriate times to be ``allocated and paid... to the credit of the person, estate or trust entitled...''

It appears that pursuant to the order of 16 June 1987 the $300,000 has been invested by the Senior Master and that out of the interest from that sum the amount of $250 is paid to the husband each week.

Finally, and relevantly in these proceedings, regard should be had to O. 15 r. 9 of the Supreme Court Rules. That deals with a case where a person under a disability is ``required by judgment to pay money'' and there is money standing to the credit of that person in the Supreme Court. In those circumstances the Court may on the application of the judgment creditor ``order that the money in Court or so much thereof as is sufficient to satisfy the judgment be paid to that person''. Subrule (2) provides that in determining whether to make such an order the Court:

``shall have regard to the fact that the person liable under the judgment is a person under disability, the purpose for which payment of the money or funds in Court was made and the purpose for which the money or funds are held.''

The trial Judge, after referring in detail to these provisions, reached the conclusion that the interest of the husband in the fund was ``property'' of the husband to which sec. 79 applied. His Honour's reasons for reaching that conclusion appear in the following passage:

``It is noted that the Order of Gray J. provided that the $300,000 be invested by the Senior Master `on behalf of the plaintiff' (husband). This terminology would naturally indicate that the funds were the property of the husband. The provision of sec. 113 indicated that the funds are `held' by the Senior Master (see sec. 113(1)). Section 113(6) refers to the money being received by the Senior Master `on behalf of' any person, in this case the husband. Section 113 refers to the moneys being placed in a Common Fund and sec. 113(7) provides that `investments made from money forming part of a Common Fund are not made on account of, and do not belong to, any particular person, estate or trust'. (The emphasis is mine.) No similar provision exists relating to the capital moneys sourced from a particular person. Section 113(8) refers to actions by the Senior Master `on behalf or on account of each person'. It is apparent from all the provisions of sec. 113 that the Senior Master acts in relation to the husband's funds as a manager not as a proprietor. Indeed it is axiomatic that a statute intending to take away proprietary rights must be express and clear; no such provision exists in this case.

I am satisfied that the funds held by the Senior Master on behalf of the husband belong to the husband. True it is that the husband and any creditors he may have possess only limited rights against this fund such rights being restricted to making applications to the Supreme Court of the nature previously referred to. These limitations do not, however, detract from the basic proposition that the funds belong to the husband and on his death will fall into his estate. The amount in the fund is quantified, the funds are identifiable, the person on whose behalf the funds are held is identified as is the person who is holding them: there is certainty about all these facets. The person who holds the funds, the Senior Master is bound by statute as to his investments with the funds and as to his dealing with them: to that extent his discretion is bounded. The ways in which he may make payments out of the funds are also circumscribed. The Supreme Court will only revoke or vary the present status of the fund on application of the husband or on the application of a judgment creditor and then only in its discretion. The fund then is one which is protected in the interests of the husband in these ways. However, none of these restrictions to my mind, on the authorities and on a consideration of the relevant statutes and rules of the Supreme Court should detract from the proposition that the fund constitutes property and is property of the husband.''

It was the contention of counsel for the appellant husband that the trial Judge was in error in this conclusion.

At the outset of his argument counsel for the husband made a number of concessions. He agreed that the Senior Master was a trustee and that in ordinary circumstances property held on a bare trust for a person would be the ``property'' of that person within sec. 79. He submitted however that the situation here was analogous to that of the rights of a beneficiary under a discretionary trust which he submitted would not be the ``property'' of that person.

Counsel for the husband further recognised the force of the presumption that legislation would not normally be interpreted so as to terminate the right of a citizen to his or her property (see O'Brien and O'Brien (1983) FLC ¶91-316 at pp. 78, 144-78, 145), but submitted that the scheme of the legislation with which we are concerned was clear and that it had that effect.

Counsel for the husband also conceded that upon the death of the husband the fund would pass to his estate, although the machinery to achieve that would be an application under O. 15 r. 9. That concession may lead to the view that the interest of the husband was at least an interest ``in reversion'' within the definition in sec. 4(1).

The principal submission of counsel for the husband was that although the trustee and the fund were defined and the husband or his estate was the only actual or potential beneficiary, nevertheless the situation was that the husband's interest was akin to that of a beneficiary under a discretionary trust. Counsel for the husband submitted that the only current right of the husband was a right to require the Senior Master to properly administer the trust. He submitted that the husband had no right to any particular portion of the fund until the Supreme Court made an order to the effect. In that regard his only right was to seek a variation or revocation of the original order. He submitted that until then the legislation did not give the husband any right to any particular amount at any time. The Court had a discretion as to how much, when and to whom moneys within that fund may be paid and the only right of the husband was to make such an application to the Court.

Counsel for the husband submitted that the situation was similar to the superannuation cases such as Bailey (supra) and Crapp (supra). He conceded that his submissions appeared inconsistent with O'Brien (supra) and also with the decision of the Full Court in Public Trustee (S.A.) and Keays (1985) FLC ¶91-651, but argued that those cases were distinguishable.

Counsel for the respondent wife submitted that the fund constituted property of the husband. He pointed to the scheme of the legislation and in particular to the circumstance that the amount was paid to the Senior Master ``to be invested... on behalf of the plaintiff'' and that the Senior Master held the fund on trust for the plaintiff ``to be held or applied on and for such trust and in such manner as the Court directs'' (sec. 60A(1)). Counsel for the wife in particular relied upon the judgment of McGovern J. in O'Brien's case (supra). He submitted that here the fund was identified, the trustee was identified and the only possible beneficiary was identified and submitted that in those circumstances the analogy with the rights of a beneficiary under a discretionary trust or in the superannuation cases was inapt. He submitted that the fund was the husband's property but that, because of sec. 60A, he cannot insist on payment to him, and the only limitation on the husband was present access to the fund.

The legislative scheme with which we are concerned is common in Australia in one form or another. Its aim is to deal with a serious social and legal issue. Unfortunately accidental injury giving rise to severe impairment is an increasing feature of modern industrial society. The most common examples are injuries arising out of the use of a motor car or arising out of employment. Many of those events give rise to a right of action either at Common Law or otherwise. On the one side such actions have led to very substantial awards in recent times. On the other, the very nature of the injuries which gave rise to such awards may disable the person from properly managing his or her affairs and in particular properly managing the very substantial verdict. It would be undesirable both in the interests of the community as a whole and of the individual plaintiff that such amount (which is normally intended to meet inter alia future medical expenses and future economic loss) should be dissipated or that the person concerned might become the victim of the actions of other persons. In those circumstances the purpose of the legislative scheme is clear. It enables a disinterested but experienced third party as trustee to administer the award with a wide but controlled discretion as to the investment of the fund and the payment out of moneys to or on behalf of the plaintiff from time to time as is thought appropriate consistently with the interests of that person and the community. In addition it gives to the Court the wider power to direct the payment out of part or all of the capital sum if the circumstances are appropriate and (as O. 15 r. 9 demonstrates) a discretion to meet judgments by third parties in circumstances which the Court considers appropriate.

It appears to us that the scheme is not intended to take away property of the plaintiff but to provide for its management. We agree with the views expressed by McGovern J. in O'Brien's case at p. 78,145 (in relation to similar legislation in South Australia) that:

``... the intention of the legislature as expressed therein, is essentially to provide a means of protecting the property of persons in need of such assistance, and that the powers given by the Act to managers of protected estates and to the Supreme Court are the machinery provided to give effect to that purpose... I do not think that there is anything therein expressed or to be implied that would indicate an intention on behalf of the legislature to take away from protected persons their beneficial ownership of or proprietary rights in their protected estates.''

Those views were specifically adopted by the Full Court in Keays' case (supra) at p. 80,247. We think that it is a mistaken approach to attempt to ``squeeze'' the trust in this case into one or other of the more generally known categories of trusts. It is a matter of interpreting the legislation to determine the question whether this fund is ``property'' within the Family Law Act.

We conclude that it is his property in that sense. It was awarded to the husband by way of settlement of his Supreme Court action. For reasons of policy the Victorian legislature has determined that the money should not be paid direct to him but into court to be administered on his behalf. We think it is in the nature of a trust of a special kind aimed at protecting the husband and society against the misuse of that fund. It is really the property of the husband, but the use of it has been made by the legislation subject to an impediment. The Senior Master has, in effect, been appointed as a manager for the time being of the fund, with wide powers. It is a case where the trustee, the trust fund and the only beneficiary are clearly defined, but that beneficiary cannot call for the transfer of the corpus to him without an order of the Court. Further, the concession by counsel for the husband that the fund would pass to the husband's estate on his death supports this view.

This issue was determined by the Full Court in Keays' case (supra) and we adopt as relevant here the description employed in that case, namely:

``the role of the Public Trustee as administrator was that of handling and management of the husband's property and the appointment did not divest him (the husband) of any proprietary interest.''

We conclude that the trial Judge was correct in determining that the fund was ``property'' of the husband and therefore fell within sec. 79.

In a separate argument counsel for the husband submitted that if this view be correct, then this would constitute property within bankruptcy legislation and that upon the bankruptcy of the husband the fund would form part of the estate in bankruptcy, a conclusion which, he said, would make a mockery of the legislative scheme and could be readily the subject of misuse by a third party.

However, it appears to us that sec. 116(2)(g) of the Bankruptcy Act has since 1980 specifically dealt with that situation. That provides that property divisible amongst creditors in a bankruptcy does not include, inter alia, ``any damages or compensation recovered by the bankrupt (whether before or after he became a bankrupt) in respect of a claim for personal injuries''.

We turn back then to the argument of counsel for the husband which we had previously foreshadowed, namely, that in determining whether to make any order and also the amount of the order, the trial Judge failed to take into account the circumstance that an order under sec. 79 would only be effective to the extent that the Supreme Court made an order for the payment out of that sum, and that the order would have the effect of diminishing the fund of the husband.

It appears clear that an order under O. 15 r. 9 is required before the Family Court order can be enforced and that the Supreme Court has a discretion whether or not to do so. But the trial Judge was conscious of these circumstances. He referred specifically to the provisions of O. 15 r. 9 but nevertheless concluded that it was appropriate to make the order. In reaching that conclusion the trial Judge, it appears to us, took into account both the difficulty of enforcement and the circumstance that satisfaction of the order would reduce the fund and consequently the husband's rights in it.

Those reasons lead us to the conclusion that we should dismiss the appeal.

During the course of argument the question whether, if the conclusion that the fund constituted property of the husband was incorrect, the procedure provided under sec. 79(5) may have been appropriate. That provision, added to the legislation in 1983, provides an additional power to adjourn a proceeding under sec. 79 where, inter alia, ``there is likely to be a significant change in the financial circumstances of the parties to the marriage or either of them'' in the future. The potential relevance of that provision here is that it is possible that at some significant portion, of the fund may be paid out to the husband, either because he ceases to be under a disability or otherwise, but the dismissal of the wife's property proceeding would prevent her from making any subsequent claim.

This matter was not considered at the trial and neither party conducted their case in that way. In particular the question whether there was ``likely to be a significant change'' would largely depend upon evidence about the husband's future medical prospects and that was not investigated.

Had we concluded that the fund was not property of the husband, then we think it would have been appropriate to have remit to the trial Judge the question whether an order under sec. 79(5) was appropriate. In the event, of course, it is unnecessary for us to do so.

At the conclusion of argument on the substantive issue we heard both counsel on the issue of costs. The appellant has been unsuccessful in his appeal and we consider in the circumstances that he should pay the wife's costs to be agreed upon or taxed.

The orders are:

1. The appeal is dismissed.
2. The appellant is to pay the respondent's costs of the appeal to be agreed upon or taxed.