PAJ & GMJ
[2003] FamCA 751
•26 June 2003
[2003] FamCA 751
FAMILY LAW ACT 1975
FAMILY COURT OF AUSTRALIA
AT DANDENONG
No. DGF 3604 of 2001
IN THE MARRIAGE OF:
PAJ
(Husband)
and
GMJ
(Wife)
EX TEMPORE JUDGMENT DELIVERED BY
THE HONOURABLE JUSTICE YOUNG
Date of Hearing: 26 June 2003
Date of Judgment: 26 June 2003
Appearances: Ms Ristevski, solicitor appeared for the Applicant Husband
No appearance by the Respondent Wife
FACTS
In this matter Ms Ristevski, solicitor, appears for the husband. There was no appearance by or on behalf of the wife. The wife was called out of court and did not appear. I am satisfied from the extensive affidavits of attempted service that have been filed in the children’s proceedings that the wife has either evaded service or not interested and involved herself in any of the matters before this Court.
The wife was previously represented by a solicitor but that solicitor’s office has subsequently filed a Notice of Discontinuing to act for the wife.
On 15 July 2002 consent orders were presented to the Family Court Australia at Dandenong purporting to resolve, on an interim basis, questions of settlement of property as between the husband and wife.
The former matrimonial home in the State of Victoria had previously been sold and the moneys were then held in trust by solicitors for the parties.
The husband had certain superannuation entitlements arising from his previous employment. The wife had modest superannuation entitlements, of approximately $1,400.00 with HESTA.
There are two children of the marriage:
¨ K.J.J. born in November 1991; and
¨ M.V.J. born in March 1998.
There were final children’s orders agreed whereby the children resided with the husband and were to enjoy contact with the wife. Unfortunately the wife does not currently exercise contact with the children and has not seen them, face to face, for approximately twelve months.
An order was made pursuant to section 79(5) of the Family Law Act 1975 adjourning the further hearing of the wife’s application for settlement of property filed 4 December 2001 and the husband’s response to that application filed 19 December 2001 to a Trial Notice List for listing on or after 1 January 2003 “or such other date upon the commencement of the Family Law Legislation Amendment (Superannuation) Act 2001”. This was referred to in the order as the “Final Hearing Date”.
Unfortunately the manner in which the property assets and financial resources of the parties were dealt with in those orders dated 15 July 2002 was both inaccurate and somewhat confusing.
THE ORDERS 15 JULY 2002
The orders are headed “FINAL PROPERTY ORDERS”. The solicitor who appeared for the husband this day argued that the heading was misleading and, in itself, inaccurate.
The orders thereafter provided for the division, equally between the parties, of the net proceeds of sale of the home.
The orders further provided for each of the parties to retain furniture, personal possessions and chattels with the husband retaining the contents of the former matrimonial home to the benefit of himself and the children.
Paragraph 4 provided as follows:
“That paragraphs 2 and 3 of these orders are an interim distribution of the property forever finalising real and personal property matters between the parties, the final distribution of the property to be a distribution of the superannuation entitlements belonging to or earned by the parties as at the date of these orders”.
Immediately there is a real difficulty in the drafting in that certain of the property orders are described as interim but however finalise real and personal property matters.
Thereafter an order is pronounced pursuant to section 79(5) of the Family Law Act in the terms outlined above in paragraph 6 hereof.
Paragraph 6 then provided:
“That on or before the final hearing date the husband and wife shall sign all such necessary documents to transfer to or roll over to a superannuation fund nominated by the wife …and in default of nomination within 30 days of these orders to a fund nominated by the husband … one half of the husband’s entitlement to superannuation as at 9 September 2001”.
Significantly paragraph 10 provided:
“That there be general liberty to apply to reinstate the proceeding if the Family Law Legislation Amendment (Superannuation) Act 2001 does not come into operation”.
Notation A to the order provided:
That save for the superannuation division between the parties, each intends these orders and the final agreement made this day between them pursuant to Part VIIIA of the Family Law Act 1975 and these notations shall as far as practicable, finally determine the financial and other relationships between them to avoid further proceedings”.
Notation C then provided:
“That the parties intend and agree that upon the commencement of the Family Law Legislation Amendment (Superannuation) Act 2001, to effect a transfer or splitting to the wife of the entire benefit or entitlement of the husband and so determine the only outstanding superannuation issue between them by the completion of the superannuation agreement as defined in the proposed section 90MD of the said Act, and not to share any other contributions to any superannuation fund either party may make or earnings of any other Fund.”
Notation D provided:
“That each party may continue to contribute to any other Fund or commence another fund and such contributions and it is intended and agreed that to the extent that the law permits such contribution shall not be taken into account in any future division of assets or superannuation”.
Notation F provided:
“That in the event that the parties are unable to reach agreement on a superannuation agreement as so defined, they intend and agree that they will seek an order under section 79 of the Family Law Act as proposed to be amended by the provisions of section 90MT(1)(a) and (b) to effect a transfer or splitting to the wife of the entire benefit or entitlement of the husband or the wife in the new fund and so determine the only outstanding superannuation issue between them by the completion of superannuation agreement as defined in the proposed section 90MD of the said Act.”
Notation G provided:
“That in the event there are practical difficulties implementing the intention of the parties because of the superannuation issue above each party has liberty to apply to the court”.
Finally Notation H provided:
“That notwithstanding these orders are made pursuant to section 79 of the Family Law Act and it is the intention of the parties to adjourn the proceedings under section 79(5) upon any subsequent hearing and each agrees as at this date and as far as is practicable to do so to seek to implement the division of property and superannuation as is set out in these orders and in this notation agreement”.
It is very difficult to understand from reading the orders what the parties meant and intended by these conflicting notations. Indeed I have expressed to the solicitor appearing for the husband my very strong opinion that the orders are poorly drafted, confusing and misleading.
Accordingly I must evaluate, understand and interpret the orders pronounced 15 July 2002 and determine whether, they were intended to be made a interim or final orders.
RELEVANT STATUTE LAW
The Family Law Legislation Amendment (Superannuation) Act 2001 received Royal Assent on 28 June 2001. That legislation is inserted within Part VIIIB of the Family Law Act 1975.
The Superannuation Legislation came into effect on 28 December 2002. There is no retrospectivity. The new legislation does not apply to property settlements that were finalised prior to the operative date of 28 December 2002.
The Family Law (Superannuation) Act 2001 states that:
5(2) Subject to subsections (3) and (4), the superannuation amendments do not apply to a marriage if a section 79 order, or a section 87 agreement, is in force in relation to the marriage at the startup time.
5(3) If a section 79 order that is in force at the startup time is later set aside under paragraph 79A(1)(a), (b), (c) or (d) of the Family Law Act, then the superannuation amendments apply to the marriage from the time the order is set aside.
5(4) If an approval of a section 87 agreement that is in force at the startup time is later revoked on a ground specified in paragraph 87(8)(a), (c) or (d) of the Family Law Act, then the superannuation amendments apply to the marriage from the time the approval is revoked”.
Accordingly the superannuation amendments will not apply if a property settlement has been concluded by court order, pursuant to section 79 of the Family Law Act prior to the commencement of the superannuation amendments.
INTERIM PROPERTY ORDER
The Family Law Act 1975 was amended in 1983 to expressly provide for an interim property order.
The Family Law Amendment Act 1983 inserted sub-sections 79(5), (6) and (7) which provide as follows:
79(5) [Adjournment of proceedings] Without limiting the power of any court to grant an adjournment in proceedings under this Act, where, in proceedings with respect to the property of the parties to a marriage or either of them, a court is of the opinion –
(a)that there is likely to be a significant change in the financial circumstances of the parties to the marriage or either of them and that, having regard to the time when that change is likely to take place, it is reasonable to adjourn the proceedings; and
(b)that an order that the court could make with respect to the property of the parties to the marriage or either of them if that significant change in financial circumstances occurs is more likely to do justice as between the parties to the marriage than an order that the court could make immediately with respect to the property of the parties to the marriage or either of them,
the Court may, if so requested by either party to the marriage, adjourn the proceedings until such time, before the expiration of a period specified by the court, as that party to the marriage applies for the proceedings to be determined, but nothing in this sub-section requires the court to adjourn any proceedings in any particular circumstances.
79(6) [Interim orders] Where a court proposes to adjourn proceedings as provided by sub-section (5), the court may, before so adjourning the proceedings, make such interim order or orders or such other order or orders (if any) as it considers appropriate with respect to any of the property of the parties to the marriage or of either of them.
79(7) [Superannuation and trust property] The court may, in forming an opinion for the purposes of sub-section (5) as to whether there is likely to be a significant change in the financial circumstances of either or both of the parties to the marriage, have regard to any change in the financial circumstances of a party to the marriage that may occur by reason that the party to the marriage –
(a)is a contributor to a superannuation fund or scheme, or participates in any scheme or arrangement that is in the nature of a superannuation scheme; or
(b)may become entitled to property as the result of the exercise in his or her favour, by the trustee of a discretionary trust, of a power to distribute trust property,
but nothing in this sub-section shall be taken to limit the circumstances in which the court may form the opinion that there is likely to be a significant change in the financial circumstances of a party to the marriage.
These sub-sections were introduced into the Family Law Act following the report of the Joint Select Committee on the Family Law Act 1975. Recommendation 33 of that report stated:
“That the Family Law Act be amended to give a discretionary power to the Court to defer the making of a final order in property proceedings until superannuation benefits have been received, and where necessary to make an interim order” (emphasis added).”
The learned authors Watts, Bourke and Taussig QC in their publication ‘Super Splitting On Marriage Breakdown’ Chapter 5, have conveniently examined the issue of the operation of the new super splitting laws.
At paragraph 5–210 they observe that three distinct categories are distinguishable and they comment:
Finalised Cases
Where section 79 proceedings have been finalised by the making of an order no advantage can be taken of the superannuation amendments.
Pending Cases
Where proceedings have been commenced but not finalised and no order has been made under section 79 the superannuation amendments will apply.
Interim Orders
“The more difficult cases is where the court may have dealt with some of the property but not all and, in so doing, has made an order under sec 79. This would include those cases where the court may have dealt with all the matrimonial property save and except any superannuation having regard to the fact that the superannuation amendments were imminent. The definition of a section 79 order in the amendments carefully restricts interim orders. Provided it can be shown that the way the court has dealt with the other property is by way of an interim order, then there is a case that the new super splitting laws apply.
However, an interim order is made under sec 79 and is subject to all the requirements under that section, including the requirements under sec 79(2) that an order should not be made unless it is just and equitable to do so. Further, the court will also need to bear in mind that there needs to be sufficient other property after the making of an interim order that, in the final proceedings, the court is able to make an order which in a global sense does justice and equity between the parties.”
RELEVANT CASE LAW
In Harris and Harris (1993) FLC ¶92-387, the Full Court comprising Nicholson CJ, Fogarty and Moore JJ said “We do not consider that it is necessary to draw a distinction in terminology between an “interim” and a “partial” order.” (Pg 79,929) In exercising the power to deal with some property in an interim fashion a court should have regard to:
“(1)…cases where the circumstances presented at that time are compelling. As a generality, the interests of the parties and the Court are better served by there being one final hearing of s. 79 proceedings. However, circumstances may arise before there can be a final hearing which dictate some part of the property of the parties should be the subject of orders. …
“(2) It is an exercise of the s. 79 power. Consequently it must be performed within those parameters. Since it is not the final hearing the Judge is unlikely to have final findings, but the exercise must fall within that general framework of material available at that time.
“(3) Of necessity it is likely to be a somewhat imprecise exercise. Consequently, it must be exercised conservatively and the Judge must be satisfied that the remaining property will be adequate to meet the legitimate expectations of both parties at the final hearing, or that the order which is contemplated is capable of being reversed or adjusted if it is subsequently considered necessary to do so. It is for this reason that we doubt whether the distinction which Nygh J drew between interim and partial orders is necessary or desirable.” (Pages 79,929-79,930)
The Full Court decision in Bassi and KD Sales Force Specialists Pty Ltd v Maas (1999) FLC ¶92-864 indicated that at times it is useful to draw the distinction between “partial” and “interim” orders, even though Harris and Harris (1993) FLC ¶92-378 had made it clear their was no distinction (see below). Lindenmeyer, Finn and Holden JJ noted:
“Whilst the Full Court in Harris and Harris (1993)FLC ¶92-378 at 79,929 considered it unnecessary to draw the distinction which Nygh J drew between “interim” and “partial” orders in Burridge and Burridge (1980) FLC ¶90-902, it did not decide that there is no such distinction, or that it is inappropriate to draw it in a proper case.”
The case before them, they found, was just such a case where drawing the distinction was warranted. The trial judge in Bassi indicated that the husband’s superannuation entitlement should be considered at a later time. The Full Court at paragraph 54-55 found:
“…it is clear from several passages that his Honour’s intention was to make final orders in respect of everything except the husband’s superannuation entitlement, and to adjourn only so much of the proceedings as related to the wife’s claim to receive further provision out of that entitlement. That intention is confirmed by the notation on the formal orders appearing immediately after order 20, in the following terms:-
“(ii) That the property orders made are a partial settlement of property under Part VIII of the Act as matters relating to superannuation remain outstanding.”
“55. The Court’s power under s 79(6), to make property orders where it makes an order under s 79(5) adjourning proceedings to await the occurrence of a significant financial event such as the receipt of superannuation, is not confined to making “interim” orders. By that sub-section it may make “such interim order or orders or such other order or orders (if any) as it considers appropriate with respect to any of the property of the parties to the marriage or either of them”.”
The recent superannuation decision in Hickey & Hickey & Anor [2003] FamCA 395 decided by Nicholson CJ, Ellis and O’Ryan JJ noted that there may be cases where partial or interim orders are made. They did not draw a distinction between these two types of orders, noting (at par 48):
“Although there may be partial or interim orders (s.79(6) of the Act) ultimately there is only one exercise of power under s.79 in respect of the property of the parties, even though that single exercise of power may be reflected in a complex order of many paragraphs or clauses, each dealing with a different item of property and some dealing with questions of implementation. It may be that some items of property are not dealt with in paragraphs or clauses of the order as it is not proposed that there be an alteration of interest in such property. However, the single exercise of power prevents a further application in relation to both specified and non specified items of property except pursuant to the provisions of s.79A.”
CONSIDERATION AND EVALUATION OF THE ORDERS
I turn now to consider and evaluate the orders of 15 July 2002 and determine whether they were pronounced pursuant to section 79 of the Family Law Act as an alteration of the property interests of the parties.
I conclude that, on balance the orders were intended by the parties to be and are interim orders pending a final determination of the section 79 power as to property.
Upon a close examination of the orders, as pronounced, my reasons for so finding are:
¨Paragraph 4 of the orders defines the alteration of interests in the home chattels and personal items as being an interim distribution of property;
¨There is a specific order made pursuant to section 79(5) set forth in paragraph 5 of the orders.
I have balanced each of the above paragraphs with paragraphs 6 and 10 of the orders and the confusion created thereby where they endeavour to convey some finality to the orders, excluding financial resources (superannuation).
Notations are not orders made by the court but a statement of the then wishes and intentions of the parties and an aid to the court, if required, to properly interpret the orders pronounced.
Each of the notations are themselves somewhat confusing but again on balance they reinforce my concluded opinion that the orders are of an interim nature and it was not a final and complete exercise of the power of the court under section 79 to alter interests in property.
Finally the parties do not seek to vary or set aside the existing property orders. What is sought is an equal adjustment of superannuation available to the parties as at the date of separation. This fact in itself may, on an initial view highlight the further difficulties with the order in that the parties are now, under recently introduced superannuation legislation completing the final settlement process which they, as at the date of the orders, were unable to conclude. I balance this issue but I do so in the circumstances that there is no appearance by, or seemingly any interest on behalf of the wife, the husband has the care and responsibility for the children of the marriage with no financial or physical assistance from the wife and it is overwhelmingly the obligation of the court to determine a just and equitable settlement of property.
I find that the orders of 15 July 2002 were intended to be and are interim orders and I propose to make such a declaration, to set aside the interim orders and to pronounce orders that are just and equitable pursuant to section 79 of the Family Law Act 1975.
SECTION 79A
The solicitor for the wife urged upon me, if I were to determine that the above orders were not interim that I should consider her alternative argument to set aside those orders pursuant to section 79A(1)(b):
“In the circumstances that have arisen since the order was made it is impracticable for the order to be carried out or impracticable for a part of the order to be carried out”.
Kay J in La Rocca and La Rocca (1991) FLC ¶92-222 set out the definition of “impracticability”. This has received Full Court approval in Cawthorn v Cawthorn (1998) FLC ¶92-805 (per Ellis, Lindenmeyer and Joske JJ).
At page 85059 Kay J expressed the view that:
“…s 79A(1)(b) should be narrowly interpreted …
“My own view is that the concept of impracticability, as referred to in this section, is akin to the application of the doctrine of frustration in contractual matters. When the Parliament is concerned with and what ought to be concerning the Court is the happening of events which cannot be reasonably foreseen, which will have the effect of causing an injustice to one of the parties if the happening of such events is not given effect to.
…
“Now, in my view, what the appropriate application of s. 79A(1)(b) ought to be is that circumstances that have arisen in which it becomes impracticable to carry out the orders are circumstances that could not reasonably have been contemplated and that in such circumstances, whilst impossibility is not the test and impracticability is, it may then become just and equitable to change the orders.”
I do not accept the submission of the solicitor for the husband. The orders are not impracticable of performance. The orders were drafted with a lack of care and attention to detail. There was an attempt to “second guess” the pending superannuation legislation, its commencement date, implementation and effects. Having said that however and having rejected any application to set aside or vary the orders I nevertheless have found that the orders themselves are interim.
I do not propose to further consider other issues that might arise pursuant to section 79A, primarily because of my initial finding and because other issues were not argued before me in these proceedings.
CONCLUSION
Upon a consideration and evaluation of all material before me and primarily the orders of the court made 15 July 2002 I conclude that those orders were interim. Accordingly I have the power and it is just and equitable to pronounce, as requested by the husband through his solicitor, final orders as of this day pursuant to section 79 of the Family Law Act 1975.
I certify that the preceding 52 paragraphs are
a true copy of the reasons for judgment herein
of The Honourable Justice Young
………………………………………………………..
Associate
Date: 1 July 2003
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