M and M
[2003] FMCAfam 307
•29 August 2003
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| M & M | [2003] FMCAfam 307 |
| FAMILY LAW – ENFORCEMENT SUMMONS – Whether appropriate method to ascertain obligation of parties in respect of lump sum superannuation – discussion whether “money order” to which Order 33 rule 2 applies. Family Court Rules, Order 33 rule 2, Order 33 rule 3 Codelfa Construction Pty Ltd v The State Rail Authority of New South Wales 149 CLR 337 |
| Applicant: | M K M |
| Respondent: | B M |
| File No: | ADM 1222 of 2003 |
| Delivered on: | 29 August 2003 |
| Delivered at: | Darwin |
| Hearing date: | 25 July 2003 Written submissions delivered 1 & 11 August 2003 |
| Judgment of: | Brown FM |
REPRESENTATION
| Counsel for the Applicant: | Mr Holland |
| Solicitors for the Applicant: | Angela Ferdinandy |
| Counsel for the Respondent: | Mr Lindsay |
| Solicitors for the Respondent: | Austen Brown, Boog |
ORDERS
The enforcement summons filed the 3rd of June 2003 is dismissed.
The matter be re-listed on the parties giving reasonable written notice.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT ADELAIDE |
ADM 1222 of 2003
| M K M |
Applicant
And
| B M |
Respondent
REASONS FOR JUDGMENT
Introduction
The parties to these proceedings are M K M “the applicant” and B M “the respondent”.
The applicant brings these proceedings for enforcement of an order made by consent in the Family Court of Australia at Adelaide on the 27th of October 1995 pursuant to Order 33 Rule 3 of the Family Court Rules. Order 33 rule 3 provides a summary procedure for the issue of a summons requiring a person said to have failed to satisfy an obligation pursuant to one of a number of specifically defined orders to appear at court to be examined on all matters related to the alleged failure to comply with such an obligation. The summons so issued is in form 46 of Schedule 1 of the Family Court Rules.
The rule envisages that a person who seeks to enforce such an obligation may file an affidavit requesting a Registrar of the Court to issue an enforcement summons in form 46. In this case such a form 46 enforcement summons was issues on the 3rd of June 2003. The summons read as follows:
(1)An order was made on 27 October 1995 requiring that you pay a sum calculated pursuant to a formula for the benefit of M K M.
(2)Payments under the order or agreement are in default or in arrears in an amount to be ascertained.
In the form 46 the wife also indicated that she sought the following additional orders from the Court:
(1)That pursuant to paragraph 1(f) of the order made on the 27th of October 1995 the husband do forthwith do (sic) all such things and execute all such documents as shall be necessary to pay the wife her entitlement calculated pursuant to that order.
(2)That the husband do forthwith give discovery and production of all documents in relation to his superannuation, termination, redundancy, invalidity, resignation or other documents in relation to his employment or the termination thereof with the Sate Rail Authority within 7 days.
(3)That this application be listed as a matter or urgency.
(4)Such further or other orders as this Court deems fit.
(5)Costs.
The dispute between the parties involves the interpretation of order 1(f) of the consent orders that were made on the 27th of October 1995 and whether the procedure as adopted by the applicant are the appropriate means of resolving that dispute. On the 27th of October 1995 Her Honour Justice Bulbeck made orders that purported to be in full and final settlement of any claim that either party had against the other in respect of matters pertaining to matrimonial property and spousal maintenance. The order that is at the centre of the dispute between the parties was in the following terms:
“1(f)the husband shall forthwith do all things and execute all documents necessary to ensure that in the event of the termination of his employment with the State Rail Authority, whether by way of his redundancy, retirement, invalidity, resignation or death the wife shall be entitled to receive a sum calculated in accordance with the following formula:
A x B x 0.5
C
where:-
A = the lump sum net of taxation payable to the husband:-
(i) upon the termination of his employment as outlined above by way of redundancy payment (including accrued long service leave, sick leave and holiday pay); and
(ii) as a lump sum upon the termination of his employment as outlined above by virtue of his being a member of the State Superannuation Investment and Management Corporation (NSW).
B = 22.5
C = years lapsed (calculated to nearest six (6) months between 26th December, 1967 and the date the husband resigns, is retrenched or invalided or retires.”
Essentially it is the respondent’s position that this order is not amenable to enforcement through the mechanism of a form 46 enforcement summons. The applicant takes a contrary view. In order to explain why this has become an issue between the parties, it is necessary to outline some background circumstances, which are not generally in dispute between the parties.
Background
The respondent has been employed by the State Rail Authority (and it seems its successor Pacific National) as a locomotive driver for many years. He was employed as such during his years of marriage to the applicant. He contributed to the State Authorities Superannuation Scheme during his period of employment. On the 24th of May 2001, he injured himself at work. He has been unable to return to work. Doctors retained by his employers are of the view that he is unlikely to be able to return to his employment. Accordingly, his employment has been terminated, although he remains in receipt of a weekly payment of Worker’s Compensation of $253.00. Accordingly, his superannuation is now in a position to vest with him. In a statement of financial circumstances filed with the Court on the 24th of July 2003, the respondent gives as the value of this superannuation the sum of $357,214.00. It does not seem to be in dispute between the parties that the respondent is entitled, at least ostensibly, to an election as to how this sum is to be paid to him. He may elect to take it as a lump sum or in the form of a part lump sum and pension.
The solicitor for the applicant has sworn an affidavit to which is attached a document headed “Benefit Estimate” in respect of the respondent’s superannuation. This form includes calculations as to the immediate cash benefit and fortnightly pension that the respondent might receive in future. Attached to the same affidavit is a letter from the respondent’s accountant which indicates that the accountant has calculated that the applicant would be entitled to the sum of $39,859.41 if the respondent took the benefit payable pursuant to the “total invalidity under the immediate cash benefit and pension option” available to him through the superannuation scheme. Needless to say it is the applicant’s position that the orders of the 27th of October 1995 by necessary implication restrain the husband from making the election implicit in the accountant’s letter or otherwise dealing with his superannuation otherwise than by taking steps to secure the maximum lump sum to which he is entitled to which the formula set out in order 1(f) of the orders of 27 October 1995 could be applied. This would necessarily prevent him taking any portion of the superannuation in a recurrent pension.
The other relevant orders of the orders of the 27th of October 1995 are as follows:
“1(g)the husband shall within 28 days of the date hereof provide a sealed copy of this order to the Trustees of the State Superannuation Investment and Management Corporation (NSW)
(h) the husband be and is hereby restrained from dealing with or disposing of any of his entitlements to redundancy pay or superannuation as a member of the State Superannuation Investment and Management Corporation (NSW) other than in accordance with these orders.”
The submissions of the parties
This matter was argued by the parties on the 25th of July 2003 in Adelaide. At the conclusion of argument, I indicated to counsel for each of the parties that I would deliver judgment in the matter on the 30th of July 2003. However on that date, Mr Holland, counsel for the applicant indicated that he had been taken somewhat by surprise by the respondent’s arguments in respect of the application of the procedures available under order 33 to the current circumstances. As a result, he believed that he had not done sufficient justice to those arguments and wished to be in a position to put further submissions in writing before the Court regarding the matter. Mr Lindsay, counsel for the respondent, did not resist this application. Accordingly the matter was further adjourned and in due course both parties filed additional written submissions.
It is appropriate to deal with the respondent’s submissions first as he seeks to strike out the enforcement summons. It is the respondent’s position that the relevant orders do not specifically direct him to take his superannuation in the form of the maximum permissible lump sum or specifically prohibit him from taking a portion of his superannuation in the form of a pension. Counsel for the respondent, Mr Lindsay, submits that the appropriate mechanism through which to clarify the meaning of the order is to seek a declaration from the Family Court. Such a process may involve the calling of parol evidence from the parties themselves and indeed from those advising them at the time the orders were made, as to their understanding of their meaning. Mr Lindsay submitted that in this case there is a genuine dispute between the parties as to the interpretation of the order and it was not a case where his client was being recalcitrant in respect of his obligation to pay a specific monetary amount to the applicant. This latter situation being the situation to which the mechanism of a form 46 enforcement summons was designed to apply. Accordingly, it was his position that the enforcement summons should be summarily dismissed.
Mr Lindsay submits that essentially what the applicant is attempting to do is to vary the substantive terms of the orders made by Justice Bulbeck on the 27th of October 1995. It is his position that this is simply not a remedy available to her under the provisions of order 33 of the Family Law Rules. In those circumstances there is no alternative other than that the enforcement summons should be dismissed.
It is the applicant’s position that this is a matter that comes within the scope of order 33. Although Mr Holland, counsel for the applicant, concedes that order 1(f) does not provide a specific sum that is to be paid to the applicant, in his submission the ambit of order 33 is sufficiently broad to allow the Court, in enforcement proceedings, to perform the necessary interpretation of the order concerned so as to calculate the specific sum sought. In certain circumstances, it would be open to the Court to receive parol evidence in respect of the issue in dispute. In Mr Holland’s submission, the present situation was analogous to the situation of a property order which called for the proceed of sale of a piece of property to be paid to a party less the “reasonable costs of sale”. If a party to such an order sought its enforcement, it may be necessary for some evidence to be led as to what was reasonable in respect of the sale costs in the circumstances, to arrive at an exact monetary figure to enforce.
I do not agree. In such a case the wording of the order itself is unambiguous. It is not capable of having two different consequences, although there may be dispute between the parties concerned about what constitutes a reasonable expense. However, the phrase “reasonable expense” is an expression capable of being defined. The Court itself can ascertain what is reasonable without an interpretation of the order itself and so reach a definite monetary amount to be enforced. That is not the case here. Order 1(f) does not definitively define what is meant by the expression “lump sum” or more importantly what obligations fell on the husband in respect of its calculation. In particular whether he had any obligation to maximise the payment of the lump sum due to him pursuant to the superannuation scheme or whether it was open to him to take part in a pension scheme. Order 1(h) in my view does not clarify the difficulty in any way. Accordingly, to ascertain what was meant in the orders by the expression “lump sum” and so arrive at a specific monetary figure to be enforced, it would be necessary for the Court to look to sources of evidence extraneous from the strict wording of the orders themselves. Although it was not specifically argued before me, I do not believe “lump sum” is a term of art.
In this case, it is clear that there is a dispute between the parties as to what was the import of the orders of the 27th of October 1995. The question is whether these enforcement proceedings are the appropriate mechanism for that dispute to be resolved. The parties each concede that the only way for the dispute to be determined will be by each of them calling parol evidence, which may include evidence from their then legal advisers. Traditionally, for obvious reasons, courts have been cautious about the admission of such evidence in both situations such as this one and those surrounding the interpretation of contracts.
The parol evidence rule in its application to contracts was expressed by Mason J in Codelfa Construction Pty Ltd v The State Rail Authority of New South Wales[1] as follows:
“The true rule is that evidence of surrounding circumstances is admissible to assist in the interpretation of the contract if the language is ambiguous or susceptible of more than one meaning. But it is not admissible to contradict the language of the contract when it has a plain meaning. Generally speaking facts existing when the contact was made will not be receivable as part of the surrounding circumstances as an aid to construction, unless they were known to both parties, although, as we have seen, if the facts are notorious knowledge of them will be presumed.”
[1] 149 CLR 337 at 352
It is Mr Holland’s position that the fact that a particular order is ambiguous or needs to be interpreted by the Court is not a proper basis for a summary dismissal of an enforcement summons such as the one in this case. He argues that the authority for the Court to summarily dismiss such a summons is strictly circumscribed and limited to situations such as frivolous or vexatious applications or those destined to fail.[2] He argues that this is not the case in this matter, there being a genuine dispute between the parties as to the application of the orders in this case and that being so, the Court must interpret the order as a precursor to enforcing it.
[2] See Bigg v Suzi (1998) FLC 92-799
In general terms, it is Mr Holland’s position that order 1(f) of the orders of the 27th of October, 1995 requires the husband to pay a sum of money to the wife on the occurrence of certain events and the Court is duty bound to embark on an inquiry to ascertain the true meaning of the order and resolve any ambiguity or uncertainty implicit in the order. It is his position that such an inquiry is one encompassed within the scope of order 33. In essence, the Court should gather the necessary evidence from the parties and any other relevant witnesses to ascertain how the order is to be interpreted, including presumably the insertion into it of any necessary additional orders and so reach a conclusion as to the exact sum to be paid to the applicant, the payment of which is then to be enforced. The mechanism to ensure enforcement is to require the respondent to preform certain actions, specifically the execution of documents or the issue of directions to the trustee of the superannuation fund of which he is a member.
Mr Holland referred to a number of cases in support of his position. These included Stevenson v Hughes,[3] which dealt with a contact order and the implied obligations that should be read into it in respect of the requirement for a custodial parent to ensure that the contact ordered did in fact take place; English & English,[4] which dealt with the Court’s interpretation of an undertaking “not to annoy, interfere with, assault, molest or harass” another person.
[3] (1993) FLC 92-363
[4] (1986) FLC 91-729
In my view, neither of these cases provides a situation analogous to the present one. In neither case was the order or undertaking in question unclear or ambiguous by means of its particular wording of phraseology. The question rather was the application of the order or undertaking to the behaviour or omission complained of by the applicant in each case.
The difficulty in this case is that order 1(f) of the order of the 27th of October 1995, leaves out at least one essential step to determine the calculation of the sum to which the wife is entitled. The issue therefore is whether enforcement proceedings such as these and the application to them of parol evidence are the appropriate mechanism to fill that lacuna in the orders.
Mr Holland also referred to Javes & Dwyer[5] where the Full Court of the Family Court said as follows:
“It is trite law that once an order has been passed and entered and there is no application for variation of it, whether under the slip rule by way of appeal or by way of action for deceit, then the meaning of the order must be gleamed from the order itself, and extraneous evidence may be looked at to interpret the order only if that meaning is not clear from the words of the order itself.”
[5] (1979) FLC 90-675 at page 78,602
Conclusions
Order 33 rule 2(1) sets out various types of obligations to which order 33 applies. In the context of this case, the relevant sub-rule is order 33 rule 2(1)(b) which reads as follows:
“(b)an order that a party pay maintenance or other money for the benefit of the other party, or if of a child, made under:
(i)the Act; or
(ii)the Child Support (Registration and Collection) Act 1998”
It is Mr Holland’s position that the sum due to his client pursuant to the orders of the 27th of October 1995 is an order for the respondent to pay money to the applicant. He further argues that the orders that the court is empowered to make under order 33 rule 3(9) to enforce such a money order have application in this case. Those powers are as follows:
If a court is satisfied that a person appearing before it, whether in person or represented by a lawyer, has failed to satisfy an obligation, the court may:
a)order the payment of the amount found to be owing under the obligation; and
b)enforce the obligation by any of the following means:
i) a garnishment order under rule 4;
ii) an order under rule 5 for the seizure and sale of personal property belonging to a person;
iii) an order under rule 6 that the estate of the person be sequestrated;
iv) an order under rule 7 for the sale of an interest in real property belonging to the person;
v) any order it considers necessary to enable enforcement of the obligations or to prevent the dissipation of property or the wasting of assets.
The nature of enforcement proceedings under order 33 is to provide a summary mechanism for the oral examination of the respondent to such an application, prior to orders being made to allow for the specific enforcement of a money debt, usually by an order for the seizure or sale of property or by garnishment of monies standing in the respondent’s name. The purpose of the oral examination being to allow the applicant to ascertain what means are available to satisfy the debt, both through cross-examination and examination of specific financial records.
In this case, in the enforcement summons, the applicant seeks orders that the husband “do forthwith all such things and execute all such documents as shall be necessary to pay the wife her entitlement calculated pursuant to that order.” Presumably this includes the husband executing a direction to the superannuation fund concerned that he will not elect to take a part of his superannuation entitlements in a pension. In essence, this is an action designed by the applicant to define the sum which is to be payable to her prior to its enforcement. Mr Holland concedes that his client and indeed others will have to give evidence to ascertain the intention of the parties when the orders by consent were made. In my view, this is a process far from that envisaged in an oral examination, as provided by order 33.
In my view, the order which the applicant seeks to enforce in this way is not an obligation to pay money within the terms of order 33 rule 2(1)(b). The scope of the inquiry is altogether different. The expression “obligation” is strictly defined by the provision of order 33 rule 1. I do not believe that order 33 rule 2(4B) assists the applicant. In this regard, I adopt the learned authors of the CCH commentary, Australian Family Law and Practice from its section which deals with enforcement as follows:[6]
“Order 33 was amended to make it clear that “it is an obligation to pay money” (not merely a court order) which can be enforced by way of enforcement summons, and the definition of “obligation” (by reference to rule 2) includes all the debts intended to be enforced under the procedure prescribed, including a registered child support liability. The changes were made to ensure the rules clearly made the enforcement summons procedure available to enforce debts due to the Commonwealth under the Child Support (Registration and Collection) Act 1988 where such debts have arisen by means of a registered administrative assessment.
Order 33 rule 2(4B) was also inserted to clarify that where an obligation is not an order of a court (eg, where a liability has been administratively assessed but not registered for collection by a Child Support Agency, such as in the case where the payee privately collects their child support) the person (payee) can apply to the court for an order declaring the amount of the obligation and a second order that the obligation be paid.”
[6] Australian Family Law and Practice (CCH) Volume 2 at paragraph 55-200
The essence of this case is that although ultimately the applicant seeks payment to her of a sum of money, what in reality she seeks are orders that would compel the respondent to perform certain actions, which are not explicitly required of him pursuant to order 1(f) as it presently stands. The order itself is not ambiguous nor are there any terms in it that require interpretation, rather it is defective by reason of omission. No mechanism is provided to allow the calculation of that sum. Because of the defect in the order, the respondent contends that he cannot comply with it and it is therefore inappropriate to bring these current proceedings to enforce his compliance to such a defective order. The actions which the applicant seeks that the respondent perform flow from her view as to the import of the orders of
27 October 1995 and would result in payment to her of the largest possible amount of money. However the respondent disputes her interpretation of the order. Accordingly, I do not believe that she is seeking to enforce an obligation to pay money within the strict meaning of order 33 rule 2. Rather what she seeks is a variation of the order so as to import to it the necessary machinery provisions to allow for the calculation of the sum due to her. In that sense she is not seeking, in a strict sense, to enforce a money order in the sense envisaged by order 33 rule 2 and pursuant to the procedures which the order provides. It follows therefore that the enforcement summons and the summary mechanism for the collection of a specific debt is not open to her in this case. I have therefore reached the conclusion that the enforcement summons must be dismissed. Further I do not believe that it is open to me to adopt a pragmatic approach to the application of the order 33 procedure to the circumstances of this particular case by embarking on what really amounts to an application to vary the orders by means of the taking of evidence from both the parties. That must be done in a formal manner by substantive application.
Costs and consequential orders
Justice demands that the positions of each of the parties be safeguarded until the applicant commences other proceedings in either this Court or the Family Court in respect of the matter. There are also competing applications for costs arising out of the enforcement summons itself.
The applicant has also filed an application on the 3rd of July 2003, in which she seeks the following order:
(1)That the Trustee of State Super (SAS Trustee Corporation) be restrained and injunctions be granted restraining it from making a determination, accepting an election of the husband or in any way allocating the entitlement of the husband in the SAS Trustee Corporation State Super Scheme to a pension pending the making of further orders in this Honourable Court.
(2)That this application be dealt with as a matter of urgency.
(3)Such further or other orders as this Honourable Court deems fit.
The Trustee of the superannuation fund concerned is not a party to these proceedings. I am told that he has had notification of the proceedings. The respondent has indicated that he would be prepared to undertake to the Court, for a finite period of time, not to deal with his superannuation entitlements. The difficulty from his point of view is that he is presently in receipt of a limited weekly income in the form of his Worker’s Compensation payments.
Having determined the principle issue before me, which concerned the application of the enforcement summons to this situation, it will be necessary for me to hear from the parties as to the need for any consequential orders that flow from the decision. I had hoped that this could occur on 30 July 2003 but that was not possible due to Mr Holland’s request to make further written submissions. It will be necessary for the matter to be re-listed at some convenient time to allow me to hear from the parties as to what further orders should be made. This hearing may include discussion about what orders should be made regarding the hearing of the parties’ future applications in respect of the orders of 27 October, 1995.
For all these reasons the orders of the Court will be as set out at the commencement of these reasons for judgment.
I certify that the preceding thirty-two (32) paragraphs are a true copy of the reasons for judgment of Brown FM
Associate: Lynnette Chin
Date: 29 August 2003
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