Hopkinson and Hopkinson

[2011] FMCAfam 1289

FEDERAL MAGISTRATES COURT OF AUSTRALIA

HOPKINSON & HOPKINSON [2011] FMCAfam 1289

FAMILY LAW – Application pursuant to s.79A to reopen property settlement on the basis of a miscarriage of justice or any other circumstance – non-disclosure of small superannuation fund – revision of property settlement would only advantage bankrupt to the disadvantage of creditors – no other party joins with bankrupt in his application.

Family Law Act 1975 (Cth), ss.75(2), 79A, 79(4)(e)
Federal Magistrates Act 1999 (Cth), s.17A(2)
Bankruptcy Act 1966 (Cth), s.116(2)(d)(iii)(A)

In the Marriage of Morrison & Morrison (1994) 18 Fam LR 519
Pacelli & Hopkinson [2010] FMCAfam 1248

Applicant: MR HOPKINSON

Respondent: MS HOPKINSON

Trustee: MR PACELLI AS TRUSTEE FOR THE BANKRUPT ESTATE OF MR HOPKINSON

File Number: BRC 4362 of 2007

Judgment of: Burnett FM

Hearing date: 21 October 2011

Date of Last Submission: 21 October 2011

Delivered at: Brisbane

Delivered on: 21 October 2011

REPRESENTATION

Counsel for the Applicant: Mr Page of Senior Counsel

Counsel for the Respondent: Mr Cameron

Solicitors for the Respondent: Nathan Lawyers

Counsel for the Trustee: Ms Julian-Armitage

Solicitors for the Trustee: Gregg Lawyers

ORDERS

1. That the application is dismissed.

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

FEDERAL MAGISTRATES
COURT OF AUSTRALIA
AT BRISBANE

BRC 4362 of 2007

MR HOPKINSON

Applicant

And

MS HOPKINSON

Respondent

REASONS FOR JUDGMENT

(Revised from Transcript)

1. This application concerns Mr Hopkinson, a bankrupt, a former [occupation omitted]. He is, from my observation, querulous. It may be his personality or it may just be the subject matter of the dispute. Irrespective, his dispute concerns a relatively trifling amount, in comparative terms, and is maintained in the face of an attitude of retreat and desire to compromise expressed by the other parties. I previously determined the issue of the standing of the bankrupt – see [2010] FMCAfam 1248. I initially ruled he had no standing in the dispute particularly because his estate had been vested in his trustee who sought to prosecute matters, for the interests of his creditors.

2. However, at a hearing since those orders of 3 July 2009, a further matter has come to light. On the material before the court in July 2009, it appeared all the bankrupt’s assets had been disclosed to and had formally vested in the hands of the trustee in bankruptcy. However, in November 2009 the prospect of a superannuation fund vested in the bankrupt’s favour came to light. There was no explanation for why this was not earlier discussed. Perhaps he did not disclose it believing he did not have to because the superannuation fund was not included within the bankrupt’s divisible property, as provided for by s.116(2)(d)(iii)(A) of the Bankruptcy Act1966 (Cth).

3. In any event, the reason is immaterial. It has subsequently transpired that the bankrupt has a superannuation fund with a value of about $13,000.00. This sum was never disclosed or debated prior to the time after the order for removing the bankrupt from the proceeding. That matter now having come to light, the bankrupt seeks for the earlier orders to be vacated so he might prosecute a s.79A application.

4. The wife has expressly abandoned any claim to that fund in the context of her matrimonial dispute. Despite that, the bankrupt still seeks to be joined as a party and to apply for orders pursuant to s.79A of the Family Law Act 1975 (Cth), to set aside the property settlement agreement which was concluded between his former wife and the trustee in bankruptcy in respect of all other matrimonial property.

5. In essence, the bankrupt wishes to reopen the property proceedings and agitate those matters again. The principal reason advanced to justify a reopening, under s.79A, is a contention that there has been a miscarriage of justice which was occasioned because the bankrupt could not negotiate in respect of an asset of the marriage, namely the wife’s superannuation, the division of which he says could have been structured for payment to him and to be received by him as protected moneys. That is to say if a superannuation splitting order was made, any funds subsequently received pursuant to such an order into his superannuation account would have maintained that protective status.

6. The result would have provided a more personally favourable outcome for the bankrupt, irrespective of how much of the estate was to be apportioned to him under s.79 principles.  That is because those funds would not have been available for his creditors but, rather, applied to his protected superannuation fund.  It is to be noted that he is of a vesting age.

7. While conceptually arguable, the argument appears to me to have only superficial attraction.  In this case the wife has settled with the trustee.  She has no interest in having the agreement reopened and, to that extent, incurring additional costs to simply have the bankrupt seek to have her make a superannuation splitting order to favour the bankrupt over his creditors.

8. Section 75(2) of the Family Law Act 1975 introduces considerations which need to be considered by operation of s.79(4)(e). They require a consideration in terms of any s.79 order in relation to the vested bankruptcy property in relation to a bankrupt party, as well as the effect of any proposed order on the ability of a creditor of a party to recover the creditor’s debt, so far as that effect is relevant. There appears to be nothing in the Family Law Act 1975 which appears to suggest that the denial of a party’s right to encourage another party to structure a property settlement to defeat a creditor’s interests is consistent with the policy of the Family Law Act 1975.  In fact, by reason of the matters just noted the contrary appears to be the case.

9. Accordingly, in the peculiar circumstances of this case, that is in circumstances where the bankrupt, while he was not a bankrupt and still a party and after he became a bankrupt and was then removed as a party; who failed to disclose his small superannuation fund, a fund protected from his creditors; and where he now seeks to pursue rights under s.79A to reopen the property settlement on the basis of a miscarriage of justice or any other circumstance; and where another circumstance was the loss of opportunity to negotiate with his former wife and the trustee in bankruptcy for a property settlement structured such as to see him receive his interest in the former matrimonial estate by way of a superannuation splitting order to, in effect, vest the fund into his hands as protected funds and thereby deprive his creditors of access to those funds; and where the wife abandons any claim to an interest in his superannuation fund, she being the only person who would suffer from any such apportionment, as she receives a significant percentage of a diminished estate; and where the trustee in bankruptcy has no interests funds in the superannuation funds in the wife’s hands but an interest in the bankrupt’s interest in the estate to receive moneys to apply to the discharge of the bankrupt’s creditors; it appears to me that such application is doomed to fail and would be summarily dismissed as, in my view, there is no reasonable basis or prospect of the application succeeding as such circumstances do not give rise to a miscarriage of justice enlivening the rights under s.79A.

10. To that end I am mindful of the court’s powers under s.17A(2) of the Federal Magistrates Act 1999 (Cth), to intervene and summarily determine in such circumstances.

11. In any event, even if I were wrong in my conclusion that the circumstances did not give rise to a miscarriage of justice, I do not consider the orders for property settlement ought to be set aside for the reasons that I have earlier stated and in such circumstances it is appropriate to adopt that course.  See generally: In the Marriage ofMorrison & Morrison (1994) 18 Fam LR 519.

I certify that the preceding eleven (11) paragraphs are a true copy of the reasons for judgment of Burnett FM

Date:  30 November 2011