Norton and Norton
[2009] FamCA 359
•8 May 2009
FAMILY COURT OF AUSTRALIA
| NORTON & NORTON | [2009] FamCA 359 |
| FAMILY LAW – PROPERTY – Whether financial agreement valid |
| Family Law Act 1975 (Cth) |
| Black and Black (2008) FLC 93-357 J and J [2006] FamCA 442 Meggitt Overseas Limited and Ors v Grdovic (1998) 43 NSWLR 527 Ramsay v Aberfoyle Manufacturing Co (Aust) Pty Limited (1935) 54 CLR 230 at 253 |
| APPLICANT: | Ms Norton |
| RESPONDENT: | Mr Norton |
| INDEPENDENT CHILDREN’S LAWYER: |
| FILE NUMBER: | DGC | 2718 | of | 2007 |
| DATE DELIVERED: | 8 May 2009 |
| PLACE DELIVERED: | Melbourne |
| PLACE HEARD: | Melbourne |
| JUDGMENT OF: | THE HONOURABLE JUSTICE CRONIN |
| HEARING DATE: | 14 April 2009 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | MR WILSON |
| SOLICITOR FOR THE APPLICANT: | RYAN CARLISLE THOMAS |
| THE RESPONDENT: | IN PERSON |
| COUNSEL FOR THE INDEPENDENT CHILDREN’S LAWYER: | MS DELLIDIS |
| SOLICITOR FOR THE INDEPENDENT CHILDREN’S LAWYER: | SEPTIMUS JONES & LEE |
Orders
IT IS DECLARED
That the financial agreement executed by the parties and dated 30 June 2003 is not a financial agreement for the purposes of Part VIII of the Family Law Act 1975 (Cth) (“the Act”) and the provisions of s 71A of the Act do not apply.
IT IS ORDERED:
That all outstanding applications be adjourned for final hearing before Justice Monteith as the first case (as at this time) in the list of defended matters for the period of five days commencing on 17 August 2009 at 10.00am as a three day matter.
That the matter be listed for mention before me at 9.00am on 7 August 2009.
That unless otherwise impracticable Registrar Kaur be appointed as the docketed registrar responsible for the management of the case.
That by 4 pm on 13 July 2009 the applicant file:
(a)an amended application setting out with precision the orders to be sought;
(b)the affidavits of evidence in chief of all witnesses relied upon, such affidavits being confined to the issues in dispute as discussed this day; and
(c)a financial statement that complies with chapter 13 of the Family Law Rules.
That unless the applicant obtains a waiver of the relevant fee, the applicant pay the trial fee by 4 pm on 13 July 2009.
That by 4 pm on 27 July 2009 the respondent file:
(a) an amended response setting out with precision what orders are being sought;
(b) the affidavits of evidence in chief of all witnesses relied upon, such affidavits being confined to the issues in dispute as discussed this day;
(c) a financial statement that complies with chapter 13 of the Family Law Rules.
That by 4 pm on 3 August 2009 the Independent Children’s Lawyer file and serve upon all other parties, the affidavit material relied upon.
That all parties have liberty to approach the registrar responsible for the management of the court file to vary the obligations under these orders to ensure readiness for trial.
Should any party fail to comply with these orders or the ensuing amending directions of the registrar responsible for the file, that registrar shall:
(a)If both parties are in default, be at liberty to move the case from the rolling list in its allocated place and either strike the case out of the list with a right of reinstatement upon conditions to be determined by the Registrar; or
(b)refer the case to the trial judge for directions as to its future management; or
(c)if the trial judge is unavailable, refer the case to the Case Management Judge for directions and determination; or
(d)return the case to the Registrar’s docket on a date to be fixed for further management
AND IT IS NOTED THAT all parties have been advised that a failure by one party to comply with these orders and those of the registrar responsible for the file may lead to the complying party seeking from the trial judge leave to proceed on an undefended basis.
That the practitioners for the parties file and serve electronically to my Associate by 4 pm on 13 August 2009 the following:
(a)a concise set of orders to be sought if different from those already filed;
(b)a list of the affidavits to be read and, if not the whole affidavit, the relevant paragraphs relied upon;
(c)a list of assets and liabilities; and
(d)a bullet-point summary of argument in relation to the issues in dispute.
That each party provide to the court at the commencement of the hearing, a statement setting out the costs incurred to that date and from what source those funds have been paid and what costs are expected to be incurred until the completion of the hearing.
AND THE COURT NOTES
A.That although this case has been allocated a number in the defended list referred to, all parties have been advised that that place may change as the list evolves and all parties are to monitor the progress of the list to be ready to start at any time during the defended period referred to in the order.
IT IS NOTED that publication of this judgment under the pseudonym Norton & Norton is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth)
| FAMILY COURT OF AUSTRALIA AT MELBOURNE |
FILE NUMBER: DGC 2718 of 2007
| MS NORTON |
Applicant
And
| MR NORTON |
Respondent
INDEPENDENT CHILDREN’S LAWYER
REASONS FOR JUDGMENT
An agreement dated 30 June 2003 was executed by the husband and wife in these proceedings. It is attached to a page bearing two certificates signed by Alan Prasad and Francis Rutherford who respectively said they were solicitors. The former dated the certificate 17 July 2003 and the latter, 30 June 2003.
The husband says this document is a financial agreement for the purposes of Part VIII A of the Family Law Act 1975 (Cth) (“the Act”) binding on the parties and, by virtue of s 71A of the Act, excludes the jurisdiction of any court from exercising powers under Part VIII of the Act.
The wife says that the agreement is not an agreement that satisfies the provisions of Part VIII of the Act. She seeks an order that it be set aside and that there be a property settlement although she does not set out what precise orders she would seek.
The issue for determination is whether the agreement is valid for the purposes of Part VIII A.
By way of background, the wife is 43 years of age and the husband 45. The wife is engaged in home duties and the husband is employed.
The parties commenced living together in November 2002, married in March 2003 and their only child was born in November 2004. There is a significant dispute between the parties about what time each should spend with the child.
The relationship came to an end and the parties separated on 20 February 2007.
The first point to notice is that the agreement was executed just after the marriage of the parties.
The parties came before me for the first day of a less adversarial trial on 14 April 2009. The wife who is the applicant was represented by counsel. The husband represented himself.
The parties made the position concerning the financial issues clear as I have set them out above. They each agreed that as the question of the effectiveness of the financial agreement in so far as it affected jurisdiction was concerned, I could determine that issue on submissions in chambers.
Counsel for the wife wanted the preliminary issue determined there and then but as the husband was not represented and not as well prepared on that subject, I gave the parties the opportunity to do their submissions in writing. The husband indicated that he would be drawing on his legal assistance which I have noted from amongst documents on the file, he has previously had.
The wife’s written submission was filed on 17 April 2009.
The husband’s written submission was filed on 4 May 2009.
The wife says that the approach of the Full Court in Black and Black (2008) FLC 93-357 means that the agreement in this case is not binding. Counsel pointed out that s 90G(1) of the Act provided that a financial agreement was binding on the parties to the agreement if and only if, the various requirements of the sub-section were met. He drew attention to the fact that the Full Court pointed out in Black and Black that although the relevant provisions of s 90G(1)(b) of the Act were amended in 2003, the question had to be answered in the light of the legislation prior to the amendments.
The submission then set out the provisions of s 90G as it was at the time that the agreement was signed.
Counsel for the wife then submitted that the agreement did not comply with the requirements of s 90G(1)(b) because it did not contain the necessary statements about each party having been provided with independent legal advice as set out clearly in that section of the Act.
Counsel then submitted that the certificates of the solicitors annexed to the agreement were in fact required by s 90G but the recital to the agreement did not purport to incorporate the certificates into the agreement and in fact did not make reference to them at all.
Finally, the submission said:
Even if the certificates had correctly stated the advice required by the legislation, and the agreement purported to incorporate the certificates into the agreement, the result would still be that the requirements had not been met. In Black v Black, the solicitor’s certificates did have the appropriate wording and the recital question made specific reference to the certificates. The trial judge had concluded that this was sufficient. Of this the Full Court said at paragraph 39:
His Honour went on to say at paragraph 115 that in the event his analysis was incorrect then the statement required under s 90G(1) was imported into the main body of the agreement by virtue of recital R of the agreement. With respect to his Honour, we do not agree.
Although at the hearing, the husband indicated that he was confident that his advice was right about the validity of the agreement, in his written submission filed 4 May 2009, the husband said the following:
If the solicitors for the applicant wife are now claiming that the agreement is not correctly drawn up in strict accordance with the law, and require the principles and requirements of the law to be applied exactly and precisely, then I cannot argue with that.
All I ask is that if the law and legal principles are to be applied exactly and precisely to the Binding Financial Agreement, then all other legal principles and rules are adhered to and observed in just as precise a manner.
The written submission of the husband contains what appears to be two complaints. The first is that the lawyer who drew up the agreement should not have acted for him on the basis that there was some conflict of interest. The second is that the lawyers involved (and I am not entirely sure to whom the husband is referring) had not complied with the Professional Conduct and Practice Rules of the Law Institute of Victoria Limited.
I do not know what the relevance of those statements might be but they do not affect the outcome of this determination. In case the husband is indicating to me that he does not agree formally, I propose to continue to set out my reasons for setting aside the agreement.
There is no evidence here upon which the dispute can be determined as the document speaks for itself. It is to that document that I turn before dealing with the legal issue in dispute.
The relevant recitals to the agreement are as follows:
A.The parties married on […] March, 2003 and wish to enter into a financial agreement during marriage to preclude claims of any nature relating to financial matters that either party has or may have against the other pursuant to:
(i) the Family Law Act 1975; and
(ii) Part IV Administration and Probate Act 1958.
in the event that the relationship ends, the parties separate or one of the parties dies.
B.This deed relates to all property and financial resources of either of the parties and relates to spouse maintenance of both of the parties both during and after the relationship or marriage. It is an agreement pursuant to s 90C of the Family Law Act.
…
E.Each of the parties has separate legal advice before executing this agreement concerning the following matters:
(a)the effect of this agreement upon the rights of the parties to apply for orders under the Family Law Act and the Administration and Probate Act 1958 in respect of property and spousal maintenance and the effect of this agreement upon the rights of each party to make an application in relation to the other party’s estate upon the death of the other;
(b)whether or not it is to the advantage, financially or otherwise, of each party to enter into this agreement;
(c)whether or not in the light of their present circumstances, that the provisions of this agreement are fair and reasonable.
F.The parties have decided to finalise all financial matters which may cause a dispute in the future and have reached agreement as set out below.
GBefore executing this agreement, each party has had regard to the possibility that one or both of them may be subject to a change of circumstances inclusive of any or all of the following:
(a) separation;
(b)divorce;
(c) reconciliation;
(d) the birth of a child or children;
(e) serious illness or injury;
(f) death;
(g)the loss of any or all of the assets listed in the schedules attached to this agreement;
(h)significant increase or decrease in the value of the assets referred to in the schedule attached to this agreement
The agreement itself then provides:
1.This agreement shall be binding upon the heirs, executors, administrator and assigns of each party respectively.
2.This agreement shall commence as and from the date of its execution by both parties and it will continue until it is terminated by the written agreement of both parties.
…
16.(a) [The husband] and [the wife] each releases his or her rights to make an application in relation to the estate of the other after the death of the other pursuant to the Administration and Probate Act 1958;
(b)[The husband] and [the wife] each gives that release in consideration of the other terms of this agreement;
(c)[The husband] and [the wife] acknowledge that it is to his and her advantage in the light of the terms of this agreement to grant the release;
(d)[The husband] and [the wife] acknowledge the terms of this agreement and that they have taken into account the position of the other in the event of the death of the other;
(e)[The husband] and [the wife] accept that the provisions of this agreement including this release are fair and reasonable.
There are then the two certificates to which I earlier referred. Leaving aside the solicitors’ names and the execution dates, the contents are otherwise the same. The certificates read:
…………..of………………………………………………………... Solicitor hereby certify that in relation to an agreement in writing proposed to be entered into between [the husband] and [the wife] (“the parties”) I advised …………(“my client”) independantly (sic) of the other party and before the time at which my client signed the agreement, as to the following matters:
1.The effect of the agreement on the rights of the parties to apply for an order under PtVIII of the Family Law Act 1975.
2.Whether or not at the time it was to the advantage, financially or otherwise of my client to enter into the agreement.
3.Whether or not at the time it was prudent for my client to enter into the agreement.
4.Whether or not at the time and the light of such circumstances as they were at the time reasonably foreseeable, the provision of the agreement were (sic) fair and reasonable.
Section 90G of the Act as it was in June 2003 when the agreement was signed then read:
90GWhen financial agreements are binding
(1)A financial agreement is binding on the parties to the agreement if, and only if:
(a)the agreement is signed by both parties; and
(b)the agreement contains, in relation to each party to the agreement, a statement to the effect that the party to whom the statement relates has been provided, before the agreement was signed by him or her, as certified in an annexure to the agreement, with independent legal advice from a legal practitioner as to the following matters:
(i)the effect of the agreement on the rights of that party;
(ii)whether or not, at the time when the advice was provided, it was to the advantage, financially or otherwise, of that party to make the agreement;
(iii)whether or not, at that time, it was prudent for that party to make the agreement;
(iv)whether or not, at that time and in the light of such circumstances as were, at that time, reasonably foreseeable, the provisions of the agreement were fair and reasonable; and
(c)the annexure to the agreement contains a certificate signed by the person providing the independent legal advice stating that the advice was provided; and
(d)the agreement has not been terminated and has not been set aside by a court; and
(e)after the agreement is signed, the original agreement is given to one of the parties and a copy is given to the other.
Note:For the manner in which the contents of a financial agreement may be proved, see section 48 of the Evidence Act 1995.
(2)A court may make such orders for the enforcement of a financial agreement that is binding on the parties to the agreement as it thinks necessary.
Section 90G was amended by the Family Law Amendment Act 2003 (Cth). The changes brought about by the amending Act did not have retrospective application. Accordingly, the provision that I have set out above applies.
I have already referred to the Full Court decision in Black and Black. The Full Court adopted the approach of Collier J in J and J [2006] FamCA 442 in which Collier J said:
To my mind, the words that appear in section 90G(1) ‘if and only if’, are words of real significance. They have a meaning. They import a requirement for a level of compliance, if the agreement is to be binding, that is clearly a standard or level above and beyond what might be described as substantial compliance. Those words ‘if and only if’ make it clear that each of the parties must ensure that that which is required to be contained and dealt with in the agreement, and the annexures to it, is in fact contained, appropriately and completely. Compliance must therefore be a full compliance, satisfying the statutory requirements.
Faulks DCJ, Kay and Penny JJ said:
the Act permits parties to make an agreement which provides an amicable resolution to their financial matters in the event of separation. In providing a regime for parties to do so the Act removes the jurisdiction of the court to determine the division of those matters covered by the agreement as the court would otherwise be called upon to do so in the event of a disagreement. Care must be taken in interpreting any provision of the Act that has the effect of ousting the jurisdiction of the Court. The amendments to the legislation that introduced a regime whereby parties could agree to the ouster of the court’s power to make property adjustment orders reversed a long held principle that such agreements were contrary to public policy” at 40.
The underlying philosophy that had guided the courts in enunciating that principle was seen to place too many restrictions on the right of parties to arrange their affairs as they saw fit. The compromise reached by the legislature was to permit the parties to oust the court’s jurisdiction to make adjustive orders but only if certain stringent requirements were met” at 42.
We are of the view that strict compliance with the statutory requirements is necessary to oust the court’s jurisdiction to make adjustive orders under s 79” at 45.
The agreement therefore does not satisfy the requirements of the relevant provisions of Part VIII A because it does not contain a statement to the effect that the parties were given legal advice about the advantages and disadvantages of making the agreement.
In so far as it might be thought that parliament’s intention has or will ameliorate that position, the proposed Bill, the Federal Justice System Amendment (Efficiency Measures) Bill (No 1) 2008 which is currently before the Senate does not assist.
In Ramsay v Aberfoyle Manufacturing Co (Aust) Pty Limited (1935) 54 CLR 230 at 253, Starke J said:
Courts of law, however, can only act upon the law as it is, and have no right to, and cannot, speculate upon alterations in the law that may be made in the future.
That comment has been supported on a number of occasions since then including for example in Meggitt Overseas Limited and Ors v Grdovic (1998) 43 NSWLR 527.
It follows therefore that I have no choice but to declare that the agreement annexed to the affidavit of the wife is not an agreement for the purposes of Part VIII A of the Act and accordingly the provision of s 71A does not apply and that Part VIII jurisdiction has not been ousted.
I now propose to make orders in relation to the readiness for trial.
I certify that the preceding thirty four (34) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Cronin
Associate:
Date: 8 May 2009
3
1