Latorre v Maddock
[2012] FMCAfam 97
•6 February, 2012
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| LATORRE & MADDOCK | [2012] FMCAfam 97 |
| FAMILY LAW – Property Adjustment and Spousal Maintenance – application for injunction – application for order to set aside instrument – binding death nomination under superannuation trust deed – cross application to strike out summarily – no reasonable prospect of success. |
| Family Law Act 1975, s.106B Federal Court of Australia Act 1976, s.31A Federal Magistrates Act 1999, s.17A Federal Magistrates Courts Rules 2001, rule 13.10(a) |
| Spencer v Commonwealth of Australia (2010) 241 CLR 118 George v Fletcher (Trustee) [2010] FCAFC 53 |
| Applicant: | MS LATORRE |
| Respondent: | MR MADDOCK |
| File Number: | BRC 2210 of 2011 |
| Judgment of: | Jarrett FM |
| Hearing date: | 30 January, 2012 |
| Date of Last Submission: | 30 January, 2012 |
| Delivered at: | Brisbane |
| Delivered on: | 6 February, 2012 |
REPRESENTATION
| Counsel for the Applicant: | Mr B Thiele |
| Solicitors for the Applicant: | Baker O'Brien & Toll |
| Solicitor for the First Respondent: | Mr Zufic |
| Solicitors for the First Respondent: | Client Care Solicitors |
| Counsel for the Second Respondent: | Ms C Carew |
| Solicitors for the Second Respondent: | QBM Lawyers |
ORDERS
Orders 2 and 3 of the application in a case filed on 8 December, 2012 are dismissed;
Otherwise the application in a case filed on 8 December, 2012 is adjourned for directions to 9.30am on 1 March, 2012.
IT IS NOTED that publication of this judgment under the pseudonym Latorre & Maddock is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT BRISBANE |
BRC 2210 of 2011
| MS LATORRE |
Applicant
And
| MR MADDOCK |
Respondent
REASONS FOR JUDGMENT
By an application filed on 20 April, 2011 Ms Latorre applies for property adjustment and spousal maintenance orders against Mr Maddock. Ms Latorre and Mr Maddock were in a de facto relationship between February, 2005 and September, 2008.
On 10 October, 2011 I made orders for interim spouse maintenance whereby Mr Maddock was required to pay a periodic sum to Ms Latorre. I made some other procedural orders. Soon after the making of the orders for interim spouse maintenance, on 14 October, 2011 Mr Maddock passed away.
At the time of his death Mr Maddock held a superannuation policy with AMP Superannuation Limited. Pursuant to that policy, Mr Maddock was able to direct the payment of a death benefit to a nominated beneficiary. Prior to his death, Mr Maddock nominated a beneficiary to receive the death benefit payable under his superannuation policy in the event of his death. The nominated beneficiary is Ms G.
By an application in a case filed on 8 December, 2011 Ms Latorre seeks orders that:
“2. Pursuant to s 90TA and s 90SS of the Family Law Act 1975, until further order (or with the express written consent of the applicant), AMP Superannuation Limited … be restrained and an injunction be granted, restraining AMP from making any payment to any person out of the proceeds of the deceased respondent’s interest in the AMP Flexible Lifetime Superannuation Plan No. (omitted).
3. In the alternative, that the binding death nomination made by the deceased Respondent De Facto Husband, on 15 April 2011, and in connection with AMP policy (omitted), be set aside pursuant to s 106B of the Act.
4. As a consequence of the death of the Respondent, that the Court make procedural orders in relation to the future conduct of the case.”
By an application in a case filed on 24 January, 2012, Ms G applies for orders that the application in a case by Ms Latorre filed on 8 December, 2011 (set out above) be dismissed and that Ms Latorre pay her costs of and incidental to that application.
The application and cross-application are made against the background that I have set out above and the following further matters:
a)Mr Maddock was the holder of AMP Flexible Lifetime Superannuation Account No. (omitted).
b)The rules of the superannuation account are contained in the AMP Superannuation Savings Trust Deed of Amendment dated 1 June, 2011 (exhibit 2 in these proceedings);
c)Pursuant to the rules of the Fund, upon Mr Maddock’s death a death benefit was payable equal to his Account Balance (cll.A2.4, B7.5, C4.5, D3.5, F2.1(a) or G8.2 of the Rules depending upon the category of membership held by Mr Maddock at the time of his death);
d)“Account Balance” for the purposes of the Fund was, at the time of Mr Maddock’s death, the balance of all Benefit Accounts maintained for Mr Maddock at that time;
e)At the time of his death, Mr Maddock had an Account Balance which comprised:
i)The value of an superannuation (accumulation) interest which, at the time of his death had an approximate value of $43,155.65;
ii)The proceeds of AMP Life Insurance Policy No. (omitted) worth $434, 389.69;
f)The Death Benefit must be paid in accordance with a Binding Nomination made by the member current at the date of the member’s death: cl.7.8 of the Fund Rules, except where there is a Court order restraining the Trustee from doing so: cl.7.8A of the Fund Rules.
g)In the event that there is no Binding Nomination the Trustee must pay the Death Benefit as follows:
i)where the Member’s estate is insolvent and there is no Legal Personal Representative appointed to the Member’s estate within a reasonable time following the member’s death, to any of the Member’s Dependants, or if the Member has no Dependants to any other person; otherwise
ii)To the Member’s Legal Personal Representative.
(cll.7.11 (a) and 7.11(b))
h)On 15 April, 2011 Mr Maddock executed a Binding Nomination for the purposes of his AMP policy naming Ms G as the beneficiary of any death benefit under the policy.
i)Mr Maddock’s estate is insolvent;
j)There is, as yet, no Legal Personal Representative willing to control Mr Maddock’s estate and his executors have renounced their executorships.
Ms Latorre's Counsel asks me to approach this application on the basis that it is an application by Ms G to summarily dismiss his client’s application pursuant to s.17A of the Federal Magistrates Act 1999.
Summary dismissal
Relevantly, rule 13.10(a) of the Federal Magistrates Courts Rules 2001 states:
Disposal by summary dismissal
The Court may order that a proceeding be stayed, or dismissed generally or in relation to any claim for relief in the proceeding, if the Court is satisfied that:
(a) the party prosecuting the proceeding or claim for relief has no reasonable prospect of successfully prosecuting the proceeding or claim.
I observe that the above rule follows s.17A of the Federal Magistrates Act 1999 which is in the same terms as s.31A of the Federal Court of Australia Act 1976. That rule and those sections provide for the Court to give summary judgment in an appropriate case. Relevantly, s.17A of the Federal Magistrates Act 1999 is set out in the following terms:
Summary judgment
…
(2) The Federal Magistrates Court may give judgment for one party against another in relation to the whole or any part of a proceeding if:
(a) the first party is defending the proceeding or that part of the proceeding; and
(b) the Court is satisfied that the other party has no reasonable prospect of successfully prosecuting the proceeding or that part of the proceeding.
(3) For the purposes of this section, a defence or a proceeding or part of a proceeding need not be:
(a) hopeless; or
(b) bound to fail;
for it to have no reasonable prospect of success.
The approach taken in cases dealing with s.31A of the Federal Court Act 1976 are generally seen as apposite in cases dealing with s.17A of the Federal Magistrates Act 1999: George v Fletcher (Trustee) [2010] FCAFC 53 at [75] and [105].
The words of s.31A mean what they say and there is little point in attempting to formulate other phrases to encapsulate their meaning: Spencer v Commonwealth of Australia (2010) 241 CLR 118, per Hayne, Crennan, Kiefel and Bell JJ at [58] – [59]. The Court must embark upon a “practical judgment…as to whether the applicant has more than a ‘fanciful’ prospect of success”: per French CJ and Gummow J at [25]. What is required by the section is set out by the Hayne, Crennan, Kiefel and Bell JJ as follows at [60]:
… The Federal Court may exercise power under s 31A if, and only if, satisfied that there is "no reasonable prospect" of success. Of course, it may readily be accepted that the power to dismiss an action summarily is not to be exercised lightly. But the elucidation of what amounts to "no reasonable prospect" can best proceed in the same way as content has been given, through a succession of decided cases, to other generally expressed statutory phrases, such as the phrase "just and equitable" when it is used to identify a ground for winding up a company. At this point in the development of the understanding of the expression and its application, it is sufficient, but important, to emphasise that the evident legislative purpose revealed by the text of the provision will be defeated if its application is read as confined to cases of a kind which fell within earlier, different, procedural regimes.
Consideration
I am satisfied that Ms Latorre’s application, insofar as she claims injunctive relief against AMP and that the Binding Nomination be set aside, has no reasonable prospects of success. I am satisfied that she has no reasonable prospects because:
The binding death nomination
a)Section 106B of the Family Law Act1975 permits the Court to set aside an instrument or disposition by or on behalf of a party which:
i)is made, or proposed to be made, to defeat an existing or anticipated order in proceedings under the Act; or
ii)irrespective of intention, is likely to defeat any such order.
b)The Binding Nomination, whilst probably an instrument for the purposes of the Family Law Act 1975, is not a disposition of any interest held by Mr Maddock in the nature of property. According to the terms of the Fund, the death benefit is only payable upon Mr Maddock’s death. He would have never become entitled to the insurance component of the death benefit.
c)Moreover, there is no evidence that he was entitled to the superannuation component of his death benefit at the time of his death. Nothing suggests that his superannuation entitlement had vested prior to his death.
d)According to the terms of the Fund, the Trustees are bound to pay the death benefit in accordance with any Binding Nomination. Thus, unless the Binding Nomination directs payment to Mr Maddock’s estate, the death benefit is not, and cannot be property that might be the subject of a property adjustment order.
e)Even if Ms Latorre successfully argued that the Binding Nomination should be set aside, according to the terms of the Fund, the death benefit is nonetheless payable according to an exercise of the discretion of the Trustee because Mr Maddock’s estate is insolvent: clause 7.11(b) of the Fund Deed.
f)In the event that the Binding Nomination is set aside (and so there is no Binding Nomination) and Mr Maddock’s estate is insolvent (as the parties agree that it is), then pursuant to cl.7.11 (b) of the Fund Deed the Trustee must pay the death benefit to any of Mr Maddock’s dependants (as that term is defined in the Fund Deed), or if there are no dependants, to any other person. But whatever be the case, the payments will be an exercise of discretion by the Trustees of the Fund.
g)By reason of the spousal maintenance order made in October, 2011 it is arguable that Ms Latorre was dependant on Mr Maddock and so falls within the definition of “dependant” for the purposes of cl.7.11(b). But whether she receives a payment is a matter entirely for the trustee of the superannuation fund. It was not suggested that this Court could, or should, interfere with the Trustees’ exercise of the relevant discretion.
The accumulation benefit
h)For the reasons expressed above, there is no serious issue to be tried as between Ms Latorre and Ms G or the Trustees of the Fund. How the funds are paid by the Trustees is entirely a matter for the Trustees according to the terms of the Fund Deed. Whether an amount is paid to Mr Maddock’s estate (which seems impossible in the circumstances) is a matter entirely for the Trustees.
Conclusion
The existence of the binding death nomination is not likely to defeat any anticipated property adjustment order in these proceedings because it does not remove any of Ms Latorre’s or Mr Maddock’s property from the reach of the Court in the pending property adjustment proceedings. The death benefit payable according to the terms of the AMP Superannuation Savings Trust Deed will be paid in accordance with the terms of the Fund Deed. It might be paid to Ms Latorre if the Binding Nomination is set aside, but:
a)whether the Binding Nomination ought to be set aside; and
b)in the event that it is, whether Ms Latorre receives a payment from the Trustees
is not a matrimonial cause as defined in s.4 of the Family Law Act 1975.
In my view, there is no reasonable prospect of Ms Latorre successfully arguing that the Binding Nomination should be set aside pursuant to s.106B of the Family Law Act1975 in these proceedings.
Further, in my view, Ms Latorre has no reasonable prospect of securing an injunction against the Trustees of the Fund restraining it from exercising its powers under the AMP Superannuation Savings Trust Deed in this Court.
For those reasons Ms Latorre’s application for orders 2 and 3 set out above will be dismissed.
The application will otherwise be adjourned to 9.30am on 1 March, 2012 at which point I will hear Ms Latorre as to the further directions to be made in this matter.
I certify that the preceding seventeen (17) paragraphs are a true copy of the reasons for judgment of Jarrett FM
Date: 6 February 2012
3
2
4