Makrolis & NSW Trustee & Guardian

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Federal Circuit and Family Court of Australia

(DIVISION 1)

Makrolis & NSW Trustee & Guardian [2022] FedCFamC1F 688

File number(s): SYC 5658 of 2021
Judgment of: ALTOBELLI J
Date of judgment: 14 September 2022
Catchwords: FAMILY LAW – JURISDICTION – Where applicant sought to set aside binding financial agreement – Where the applicant’s wife died before institution of proceedings – Application dismissed for want of jurisdiction.
Legislation: Family Law Act 1975 (Cth) ss 39, 44, 79, 80, 90H, 90K
Cases cited:

Radney & Radney [2022] FedCFamC2F 53

Simonds (Deceased) & Coyle (2019) FLC 93-895; [2019] FamCAFC 47
Division: Division 1 First Instance
Number of paragraphs: 25
Date of hearing: 6 July 2022
Place: Sydney (via videoconference)
Counsel for the Applicant: Ms Picker
Solicitor for the Applicant: Otto Stichter & Associates
Counsel for the Respondent: Mr Wong
Solicitor for the Respondent: NSW Trustee & Guardian

ORDERS

SYC 5658 of 2021

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN:

MR MAKROLIS

Applicant
AND:

NSW TRUSTEE & GUARDIAN

Respondent

order made by:

ALTOBELLI J

DATE OF ORDER:

14 SEptember 2022

THE COURT ORDERS THAT:

1.The application is dismissed.

2.The matter is removed from the list of cases awaiting finalisation.

Note:   The form of the order is subject to the entry in the Court’s records.

Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).

Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Makrolis & NSW Trustee & Guardian has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

REASONS FOR JUDGMENT

ALTOBELLI J:

INTRODUCTION

  1. The discrete issue is whether, on the facts and circumstances of this case, the Court has jurisdiction to set aside a binding financial agreement dated 29 May 2019.  This Court does not have jurisdiction and, accordingly, the application is dismissed.

    Background

  2. The background facts are uncontentious.  Mr Makrolis (“the applicant”) is 44 years old.  Ms Makrolis, the applicant’s deceased former wife (“Ms Makrolis”) would have been 42 years old.  They commenced cohabitation in 2004 and married in 2006.  They had three children who are currently aged 15, 13 and nine.  The applicant and Ms Makrolis separated on a final basis on 1 October 2018.  They entered into a binding financial agreement on 29 May 2019.  They divorced in mid-2019.  In late 2019, Ms Makrolis died intestate.  In late 2020, letters of administration were granted to the NSW Trustee & Guardian (“the respondent”).

  3. On 25 August 2021, the applicant commenced proceedings to set aside the binding…

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Details
Case
[2022] FedCFamC1F 688
Decision Date

CaseChat Overview and Summary

The case before the court involved an application by Mr Makrolis to set aside a binding financial agreement he had entered into with his deceased former wife, Ms Makrolis. The court was asked to determine whether it had jurisdiction to do so. The background to the case was that Mr and Ms Makrolis had been in a relationship from 2004, married in 2006 and separated in 2018. They had three children together. They entered into a binding financial agreement on 29 May 2019, dividing their assets approximately 39 per cent to Mr Makrolis and 61 per cent to Ms Makrolis. Ms Makrolis passed away intestate in late 2019, leaving the estate, amounting to $746,349.09, in the hands of the NSW Trustee & Guardian, the respondent in these proceedings. Mr Makrolis applied to set aside the binding financial agreement, seeking to access Ms Makrolis’ estate to meet the family’s living expenses. The court was required to decide whether it had jurisdiction to set aside the agreement under s 90K(1)(d) of the Family Law Act 1975 (Cth).

The court considered whether Mr Makrolis had satisfied the jurisdictional requirements under s 90K(1)(d) of the Act, which allows a court to set aside a binding financial agreement if a material change in circumstances has occurred since the agreement was made and, as a result, a child of the marriage or a party with caring responsibility for the child will suffer hardship if the agreement is not set aside. The court found that the applicant had failed to demonstrate that a material change in circumstances had occurred since the making of the agreement that would result in hardship to the child or a party with caring responsibility for the child if the agreement was not set aside. The court held that the applicant had not demonstrated that the current financial circumstances were different from what the parties had contemplated at the time of making the agreement.

The court dismissed the applicant’s application, holding that it did not have jurisdiction to set aside the binding financial agreement. The court found that the applicant had failed to satisfy the jurisdictional requirements under s 90K(1)(d) of the Act. The court also noted that the applicant had not demonstrated that the current financial circumstances were different from what the parties had contemplated at the time of making the agreement. Accordingly, the court dismissed the application and held that it did not have jurisdiction to set aside the binding financial agreement.

Orders

Orders of the court

Full text does not contain this section.

Background

Background to the litigation

The discrete issue is whether, on the facts and circumstances of this case, the Court has jurisdiction to set aside a binding financial agreement dated 29 May 2019. This Court does not have jurisdiction and, accordingly, the application is dismissed.Background The background facts are uncontentious. Mr Makrolis (“the applicant”) is 44 years old. Ms Makrolis, the applicant’s deceased former wife (“Ms Makrolis”) would have been 42 years old. They commenced cohabitation in 2004 and married in 2006. They had three children who are currently aged 15, 13 and nine. The applicant and Ms Makrolis separated on a final basis on 1 October 2018. They entered into a binding financial agreement on 29 May 2019. They divorced in mid-2019. In late 2019, Ms Makrolis died intestate. In late 2020, letters of administration were granted to the NSW Trustee & Guardian (“the respondent”). On 25 August 2021, the applicant commenced proceedings to set aside the binding financial agreement. This matter came before me on 6 July 2022. Both parties were represented by experienced family law counsel. It is common ground that the net total assets held by the respondent amounts to $746,349.09. These funds are held on trust for the three children who currently live with the applicant. The applicant and the children live in rented accommodation. He cannot afford to purchase a permanent residence for the children and himself without accessing Ms Makrolis’ estate, which in turn can only be achieved by setting aside the binding financial agreement. That there is hardship for the applicant is not in dispute. He spends all of his income in meeting the expenses of his family. The applicant does not dispute that he could approach the respondent for financial assistance in relation to the care of the children, but he considers this unwieldy, unfair and an additional burden of hardship on him as father to the children. It is common ground that the binding financial agreement divided the property available for distribution between the applicant and Ms Makrolis as to approximately 39 per cent to him, and 61 per cent to her.The applicant’s case as to jurisdiction In terms of jurisdiction, the applicant relied on s 90K(1)(d) of the Family Law Act 1975 (Cth) (“the Act”) as empowering the Court to set aside the binding financial agreement. Section 90K states:90KCircumstances in which court may set aside a financial agreement or termination agreement(1)A court may make an order setting aside a financial agreement or a termination agreement if, and only if, the court is satisfied that:(a)the agreement was obtained by fraud (including non‑disclosure of a material matter); or(aa)a party to the agreement entered into the agreement:(i)for the purpose, or for purposes that included the purpose, of defrauding or defeating a creditor or creditors of the party; or(ii)with reckless disregard of the interests of a creditor or creditors of the party; or(ab)a party (the agreement party) to the agreement entered into the agreement:(i)for the purpose, or for purposes that included the purpose, of defrauding another person who is a party to a de facto relationship with a spouse party; or(ii)for the purpose, or for purposes that included the purpose, of defeating the interests of that other person in relation to any possible or pending application for an order under section 90SM, or a declaration under section 90SL, in relation to the de facto relationship; or(iii)with reckless disregard of those interests of that other person; or(b)the agreement is void, voidable or unenforceable; or(c)in the circumstances that have arisen since the agreement was made it is impracticable for the agreement or a part of the agreement to be carried out; or(d)since the making of the agreement, a material change in circumstances has occurred (being circumstances relating to the care, welfare and development of a child of the marriage) and, as a result of the change, the child or, if the applicant has caring responsibility for the child (as defined in subsection (2)), a party to the agreement will suffer hardship if the court does not set the agreement aside; or(e)in respect of the making of a financial agreement—a party to the agreement engaged in conduct that was, in all the circumstances, unconscionable; or(f)a payment flag is operating under Part VIIIB on a superannuation interest covered by the agreement and there is no reasonable likelihood that the operation of the flag will be terminated by a flag lifting agreement under that Part; or(g)the agreement covers at least one superannuation interest that is an unsplittable interest for the purposes of Part VIIIB.(1A)For the purposes of paragraph (1)(aa), creditor, in relation to a party to the agreement, includes a person who could reasonably have been foreseen by the party as being reasonably likely to become a creditor of the party.(2)For the purposes of paragraph (1)(d), a person has caring responsibility for a child if:(a)the person is a parent of the child with whom the child lives; or(b)a parenting order provides that:(i)the child is to live with the person; or(ii)the person has parental responsibility for the child.(3)A court may, on an application by a person who was a party to the financial agreement that has been set aside, or by any other interested person, make such order or orders (including an order for the transfer of property) as it considers just and equitable for the purpose of preserving or adjusting the rights of persons who were parties to that financial agreement and any other interested persons.(4)An order under subsection (1) or (3) may, after the death of a party to the proceedings in which the order was made, be enforced on behalf of, or against, as the case may be, the estate of the deceased party.(5)If a party to proceedings under this section dies before the proceedings are completed:(a)the proceedings may be continued by or against, as the case may be, the legal personal representative of the deceased party and the applicable Rules of Court may make provision in relation to the substitution of the legal personal representative as a party to the proceedings; and(b)if the court is of the opinion:(i)that it would have exercised its powers under this section if the deceased party had not died; and(ii)that it is still appropriate to exercise those powers;the court may make any order that it could have made under subsection (1) or (3); and(c)an order under paragraph (b) may be enforced on behalf of, or against, as the case may be, the estate of the deceased party.(6)The court must not make an order under this section if the order would:(a)result in the acquisition of property from a person otherwise than on just terms; and(b)be invalid because of paragraph 51(xxxi) of the Constitution.…(Emphasis in original)

Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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