Paul and Paul
[2011] FamCA 672
•4 August 2011
FAMILY COURT OF AUSTRALIA
| PAUL & PAUL | [2011] FamCA 672 |
| FAMILY LAW – PRACTICE AND PROCEDURE – Application by wife for case stated – Application dismissed |
| Family Law Act 1975 (Cth) s 94A Family Law Rules 2004 rr 22.47, 22.48, 22.49 |
| B & B and Minister for Immigration Multicultural and Indigenous Affairs and Ors [2002] FamCA 767 Bass v Permanent Trustee Co Ltd (1999) 198 CLR 334 Candlish & Pratt (1980) FLC 90-819 D & D (unreported), Full Court, Appeal No 125/91, 30 April 1992 Director of Public Prosecutions (SA) v B (1998) 194 CLR 566 Kemeny & Kemeny [1998] FamCA 34 Radmacher v Granatino [2010] UKSC 42; [2011] 1 All ER 373 Weinhopf & Weinhopf [2009] FamCA 1084 Woodcock v Woodcock (1997) FLC 92-739 Woodland & Todd (2005) FLC 93-217 |
| APPLICANT: | Ms Paul |
| RESPONDENT: | Mr Paul |
| FILE NUMBER: | BRC | 10462 | of | 2010 |
| DATE DELIVERED: | 4 August 2011 |
| PLACE DELIVERED: | Brisbane |
| PLACE HEARD: | Brisbane |
| JUDGMENT OF: | O'Reilly J |
| HEARING DATE: | 4 August 2011 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr Page SC |
| SOLICITORS FOR THE APPLICANT: | Neumann & Turnour Lawyers |
| COUNSEL FOR THE RESPONDENT: | Mr Alexander |
| SOLICITORS FOR THE RESPONDENT: | Michael Sing Lawyers |
Orders
IT IS ORDERED
The wife’s application in a case filed on 2 June 2011 seeking a case stated is dismissed.
The husband’s costs of and incidental to that application are reserved to the trial judge.
The matter be listed before Registrar Coutts for a case conference at 3.45pm on Monday 15 August 2011.
AND IT IS DIRECTED
Counsel confer and if possible agree a set of directions for Registrar Coutts to consider at the case conference.
IT IS NOTED that publication of this judgment under the pseudonym Paul & Paul is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
| FAMILY COURT OF AUSTRALIA AT BRISBANE |
FILE NUMBER: BRC 10462 of 2010
| Ms Paul |
Applicant
And
| Mr Paul |
Respondent
REASONS FOR JUDGMENT
Application
This is an application in a case by the wife filed 2 June 2011 for the following relief:
1.That a Case Stated to the Full Court be settled by the Family Court of Australia in the following terms:
On the assumption that the Pre-nuptial Agreement entered into between the parties on 2 March 1994 in [City C], [Country B], was binding on the parties according to the law of [Country B] and having regard to the provisions of Part VIIIA of the Family Law Act 1975 (Cth) would the Family Court of Australia regard the parties as being bound by the terms of the Pre-nuptial Agreement entered into between them on 2 March 1994?
The husband opposes that there be a case stated to the Full Court, but in his affidavit filed 26 July 2011, after reference to the case stated the wife seeks, said:
11.My position is that there is no case to be stated.
12.In the event this Honourable Court is of the view that there is a case to be stated, I propose that the case stated be:
Having regard to the provisions of Part VIIIA of the Family Law Act 1975 (Cth), would the Family Court of Australia declare a purported pre-nuptial agreement, entered into [by] the parties on or around 2 March 1994 in [City C Country B], as binding in Australia.
Mr Page SC, in written submissions filed on 25 July 2011, par 12, described the wife’s application in a case as an application “that a Judge express a wish” to have “the question of law” determined by a Full Court, and to settle a case stated accordingly.
Mr Page’s submissions included, par 11, that “There has been no objection to the draft case stated in terms of Rule 22.48”. However, objection pursuant to rule 22.48 of the Family Law Rules 2004 can occur only after a judge, pursuant to rule 22.47, orders a party to prepare a case stated: see generally, rules 22.47 – 22.49.
Section 94A of the Family Law Act 1975 (Cth) (the Act), which I will set out below, refers to the procedure of a case stated where “a question of law” arises, and the other matters in s 94A apply.
Despite the wife’s application in a case, par 1, Mr Page SC in his written submissions, par 15, said:
15.… a question of law arises as to whether a financial agreement entered into by parties in a foreign country in accordance with the laws of that country and binding between them in accordance with such laws could and should be given the weight intended by that agreement to the division of their property. … (emphasis added)
Later, during oral argument, Mr Page put the proposed question of law as follows:
The Full Court needs to consider the issue whether the same weight as is given to judgments of a foreign jurisdiction that finally determine the rights of parties to property should be given to agreements entered into by parties in a foreign country the effect of which is to finally determine their rights of property. (emphasis added)
This, it may be noted, is somewhat different from par 1 of the wife’s application in a case, and different again from Mr Page’s submissions, par 15.
There is difficulty also because the case stated sought in the wife’s application in a case expressly refers to Part VIIIA of the Act as having relevance to the question posed for answer.
It is now common ground, however, after oral argument, that Part VIIIA has no application whatsoever to agreements made otherwise than pursuant to Part VIIIA: see s 90B in relation to the definition of a “financial agreement” for the purposes of Part VIIIA. This definition applies also to s 90G(1A).
The question posed thus is embarrassing on its face. Part VIIIA has nothing to do with agreements made in Country B, or anywhere else. Part VIIIA concerns only agreements which fit its precise requirements. These requirements include that the agreement contains a clause stating that the agreement is expressed to be made under s 90B. Thus, looking back to the application in a case, at least the words:
and having regard to the provisions of Part VIIIA of the Family Law Act 1975 (Cth)
would need to come out so that the question proposed would thus read:
On the assumption that the Pre-nuptial Agreement entered into between the parties on 2 March 1994 in [City C, Country B], was binding on the parties according to the law of [Country B] … would the Family Court of Australia regard the parties as being bound by the terms of the Pre-nuptial Agreement entered into between them on 2 March 1994?
Despite these difficulties for the wife, it is plain that if there is to be a case stated a judge must settle it: rules 22.49(1) and (2).
Background to the wife’s application for a case stated
The husband, by initiating application filed 9 November 2010, seeks pursuant to s 79 of the Act a just and equitable division of the parties’ property and assets.
The wife, by response filed 22 December 2010, seeks that the husband’s application for a division of their property and assets be dismissed.
The basis of the wife’s claim for dismissal, as explained in an affidavit by her filed also on 22 December 2010, is that the parties prior to their marriage on 16 April 1994 in Country B entered into a pre-nuptial agreement dated 2 March 1994 which, she contends, has the effect that the husband is estopped from commencing or prosecuting property proceedings here under s 79.
Indeed, Mr Page in his written submissions, pars 9 and 11, submitted:
9.On 22 December 2010 the wife sought the dismissal of the husband’s application on the basis that the division of their property was governed by the agreement entered into by them in [Country B]. It is the [wife’s] submission that the husband is estopped from commencing proceedings in relation to their property.
11…the [wife] accepts that the [husband] does not accept that he is estopped by reason of the financial agreement or in any other way. (emphasis added)
Family Law Act 1975 (Cth) – s 94A
The Act s 94A, relevantly provides:
SECTION 94A CASE STATED
94A(1)If, in proceedings in a court, being proceedings in which a decree or decision to which subsection 94(1) and (1AA) applies could be made, a question of law arises which the Judge and at least one of the parties wish to have determined by a Full Court of the Family Court before the proceedings are further dealt with, the Judge shall state the facts and question in the form of a special case for the opinion of a Full Court, and a Full Court shall hear and determine the question.
94A(2)The Full Court may draw from the facts and the documents any inference, whether of fact or of law, which could have been drawn from them by the Judge.
There is no issue in the case that the matter falls within s 94A(1). The conjunctive “and” in reference to s 94A(1) “and” (1AA) seems anomalous having regard to the content of s 94(1AA). However, when read as “or”, as seems intended, s 94(1) is triggered. Nothing in the case turns on that anomaly.
Family Law Rules 2004
The relevant part of Part 22.9 of the Rules provides:
PART 22.9 CASE
RULE 22.46 APPLICATION OF PART 22.9
This Part applies to a case (a case stated ) under the Act, the Assessment Act or the Registration Act in relation to which the court and a party want a Full Court to determine a question of law arising in the case.
RULE 22.47 CASE STATED
(1)If a Judge orders a party to prepare a case stated to the Full Court, the party must:
(a)confer with each other party about the terms of a draft case stated; and
(b)prepare the draft case stated based on the agreed terms.
(2) The draft case stated must concisely state the facts and the question of law to be determined.
(3) When the draft of the case stated is completed, the party who prepared it must:
(a)ask the Regional Appeal Registrar to list the case for a procedural hearing to have the draft case stated settled by the Judge; and
(b) serve a copy of the draft case stated and a notice of the date fixed for the procedural hearing on each other party and any other person the Judge directs.
RULE 22.48 OBJECTION TO DRAFT CASE STATED
(1) A party served with a copy of a draft case stated under paragraph 22.47 (3) (b) may object to its terms, or seek an amendment of it, by giving written notice to the party who prepared the draft of:
(a) any objections; or
(b) any amendments sought to be made when the draft is settled by the Judge.
(2) The party must give the notice within 7 days after the copy of the draft case stated was served on the party.
RULE 22.49 SETTLEMENT AND SIGNING
(1) The party who prepared the draft case stated must lodge:
(a)the draft case stated;
(b)any objections or amendments sought by the other party; and
(c)a request that the Judge settle the draft case stated.
(2) The party who prepared the draft case stated must, within 3 days after it has been settled, file a copy of the case stated, as settled, for signature by the Judge.
Relevant principles
Section 94A invites exercise of a judicial discretion - exercise of the discretion must be reasonable
In B & B and Minister for Immigration Multicultural and Indigenous Affairs and Ors [2002] FamCA 767 Dawe J said:
5. The emphasis in Section 94A is that the Judge wishes that the case be stated on the question of law. That clearly indicates that the Case Stated must be one which is made with the approval of the Judge, not simply because all of the parties consent or because the parties raise the issue of a Case Stated.
6. I accept that this is a matter which falls within the definition of Section 94A as one which could be the basis of a Case Stated to the Full Court. Clearly, however, it is at the Judge's discretion (as the emphasis in the words of Section 94A already indicated direct), namely that “the Judge wishes”. I accept the submissions of the counsel for the Minister, that the exercise of a discretion such as this and in this particular case must be reasonable.
The use of the word “wish” in s 94A is curious as it governs both the “wish” of the judge and the “wish” of at least one of the parties. The word “wish”, seemingly, should be given the same meaning vis-à-vis the judge and vis-à-vis one of the parties. Parties, however, do not exercise a discretion, in the sense of a judicial discretion. Yet judges can act in only one of two ways: first, to determine a matter judicially by the strict application of legal principles; or secondly, to determine a matter judicially the exercise of a discretion.
On its face, the word “wish”, vis-à-vis the judge, might seem to infer a subjective element or matter for subjective decision. However, that is not the view of Dawe J, with which respectfully I agree. Thus I will follow Dawe J and apply the principle as stated by her that s 94A(1) invites the exercise of a judicial discretion and that its nature is such the exercise of it must be reasonable.
Exercise of the discretion invites the consideration of other options
In Bakhtiari (above) Dawe J said:
20.The process of stating a case should not be a method of sidestepping a decision by a Judge at first instance; neither is it a means for the Judge at first instance to avoid making a decision on questions of jurisdiction, power or statutory interpretation. When considering whether to state a case, I believe it is the obligation of the Court to explore all the options and weigh all the advantages and disadvantages in a particular case. It is necessary then to determine whether the stating of the case would be reasonable, and make a decision based upon that outcome. (emphasis added)
A case stated must proceed upon the basis of a statement of facts agreed to by the parties or settled by the judge
In Bakhtiari, Dawe J said at [17]:
17.There is limited authority in the Family Law cases on the question of a Case Stated. The case of Mullane v Mullane (1980) FLC 90‑826 was a case before the Full Court. In that case, Evatt CJ as she then was, and Butler J as he then was, said by way of introductory remarks:
Before considering the actual issues which arise in the present matter, some observations should be made about section 94A. The use of this section can sometimes be an unsatisfactory way of resolving issues between parties to a matrimonial cause. Those issues are determined by the Full Court on the basis of a statement of facts agreed to by the parties or settled by the Judge. Those facts may differ in some ways from those which are ultimately established by the evidence. Alternatively, there may be factual information omitted from the case which the Full Court may consider important to its decision. There must of necessity be additional delay and cost involved in stating a case to the Full Court.
So far, the only fact agreed is that the parties made a pre-nuptial agreement in Country B.
The husband, as will be seen, wishes to adduce evidence as to the facts surrounding the creation and signing of the agreement. These matters substantively are disputed by the wife.
Judicial power involves application of the law to facts which are either assumed agreed or determined
In Bass v Permanent Trustee Co Ltd (1999) 198 CLR 334 (referred to by Dawe J in Bakhtiari at [8]), the majority comprising Gleeson CJ, Gaudron, McHugh, Gummow, Hayne and Callinan JJ said at [53] and [56]:
53Special problems can arise where the preliminary question is one of mixed fact and law. As Brooking J pointed out in Jacobson v Ross it is necessary in that situation that there be precision both in formulating the question and in specifying the facts upon which it is to be decided. His Honour added:
Care must be taken to ensure that, in one way or another, all the facts that are on any fairly arguable view relevant to the determination of the question are ascertainable ... as facts assumed to be correct for the purposes of the preliminary determination, or as facts which both sides accept as correct, or as facts which are to be judicially determined. Failure to do this, and in particular failure to perceive that the facts alleged in a pleading are some only of the facts relevant to the determination of the preliminary question, may make the order for preliminary determination unfruitful.
Quite apart from rendering the "order for preliminary determination unfruitful", the failure to identify the relevant facts or the means by which they are to be ascertained may result in procedures which do not conform to the judicial process. That is a matter to which it will be necessary to return.
…
56 Judicial power involves the application of the relevant law to facts as found in proceedings conducted in accordance with the judicial process. And that requires that the parties be given an opportunity to present their evidence and to challenge the evidence led against them. It is contrary to the judicial process and no part of judicial power to effect a determination of rights by applying the law to facts which are neither agreed nor determined by reference to the evidence in the case. … (footnotes omitted) (emphasis added)
In Bass, the High Court was dealing with preliminary determination by a trial judge and not the procedure of a case stated. However, the passages cited are apt, having regard to s 94A that a judge:
…shall state the facts and question in the form of a special case for the opinion of a Full Court …
that is, the question of law arising on the stated facts.
It is not an answer to the necessity to state facts that s 94A(2) permits the Full Court to draw inferences from “the facts” and “the documents”. There must still be stated facts by the judge.
The jurisdiction for a case stated is not conferred to permit courts to offer opinions on hypothetical questions
In Director of Public Prosecutions (SA) v B (1998) 194 CLR 566 Gaudron, Gummow and Hayne JJ said at [12]:
12.The difficulties in the case stated procedure, whether the case is stated in a criminal or civil matter or, if in a criminal matter, whether stated at the instance of the prosecution or defence, are well known. At least some of those difficulties stem from a failure to recognize that the jurisdiction is not conferred to permit courts to offer general advisory opinions on hypothetical questions. The questions reserved in this matter appear to invite such an opinion. (emphasis added)
The arguments
Mr Page – wife
Mr Page referred to Radmacher v Granatino [2010] UKSC 42; [2011] 1 All ER 373 in which the Supreme Court of the United Kingdom determined the matters to be considered there in respect of a pre-nuptial agreement made under German law.
Mr Page said that the “idea” for a case stated in this matter arose out of Radmacher, which he contended dealt with “a financial agreement made in Germany which was binding in Germany”. However, Mr Page was not able to point to any part of the judgment in Radmacher in which that was either an agreed fact or judicially determined. He submitted, however, that it is “implicit in everything said in Radmacher” that the agreement was binding in Germany, that is, enforceable in Germany to the extent it applied.
Mr Page, at par 10, referred to the following in Radmacher at [67]:
THE ISSUES RAISED
67.The issues raised on the facts of this case can be placed under three heads:
(a) Were there circumstances attending the making of the agreement that detract from the weight that should be accorded to it?
(b) Were there circumstances attending the making of the agreement that enhance the weight that should be accorded to it; the foreign element?
(c) Did the circumstances prevailing when the court's order was made make it fair or just to depart from the agreement?
We shall have to consider these questions in the context of the facts of this case, but at this stage we propose to address the issues of principle that they raise. (emphasis added)
Mr Page referred also to [169] per Lady Hale (dissentiente in the decision):
169.It seems to me clear that the guiding principle in White's case and Miller's case is indeed fairness: but it is fairness in the light of the actual and foreseeable circumstances at the time when the court comes to make its order. Those circumstances include any marital agreement made between the parties, the circumstances in which that agreement was made, and the events which have happened since then. The test to be applied to such an agreement, it seems to me, should be this:
'Did each party freely enter into an agreement, intending it to have legal effect and with a full appreciation of its implications? If so, in the circumstances as they now are, would it be fair to hold them to their agreement?'
That is very similar to the test proposed by the majority, but it seeks to avoid the 'impermissible judicial gloss' of a presumption or starting point, while mitigating the rigours of the MacLeod test in an appropriate case. It allows the court to give full weight to the agreement if it is fair to do so and I adhere to the view expressed in MacLeod's case that it can be entirely fair to hold the parties to their agreement even if the outcome is very different from what a court would order if they had not made it. It may well be that Lord Mance is correct in his view that the difference between my formulation and that of the majority is unlikely to be important in practice. I would prefer not to take that risk.
Mr Page referred to the Press Summary released by the Supreme Court in relation to that decision, tendered as exhibit 1, setting out various extracts from the Press Summary in his written submissions.
Mr Page in his written submissions said (par 16):
16. It is submitted that the decision of the Supreme Court of the United Kingdom raises a significant question of law and that that question of law is applicable to the courts in Australia notwithstanding the provisions of the Family Law Act, particularly Part VIIIA. There are no decisions that consider the same question considered by the Supreme Court of the United Kingdom. (emphasis added)
However, in par 17, despite the last sentence of par 16, Mr Page in fact referred to a relevant Australian decision, namely Weinhopf & Weinhopf [2009] FamCA 1084 per Murphy J, which in turn had referred to an earlier relevant Full Court decision, namely D & D (unreported), Full Court, Appeal No 125/91, 30 April 1992. I will set out Mr Page’s par 17:
17.In Weinhopf & Weinhopf [2009] FamCA 1084 Murphy J had to consider the fact that the parties executed a document described as a “pre-nuptial agreement” in Germany in 1976 prior to their marriage. In reliance on that agreement the wife’s parents had made transfers of property and gifts and cash. It was accepted by the Trial Judge that the pre-nuptial agreement did not preclude the husband from pursuing his application for orders pursuant to s 79 nor did it relieve the Court of its obligation to decide the matter in accordance with the provisions laid down by the Act. The Court cited the decision of D & D, an unreported decision of the Full Court on 30th April 1992. …
His Honour’s judgment in Weinhopf records the following at [45] and [77]–[80]:
45.I accept the argument on behalf of the husband that the pre-nuptial agreement does not preclude the husband from pursuing his application for orders pursuant to s 79, nor does it relieve the Court of its obligation to decide this matter in accordance with the provisions laid down in the Act. (See D & D Full Court, unreported, 30 April 1992, per Strauss, Lindenmayer and McCall JJ and the earlier decisions there cited).
…
77.Central to the wife’s position is a contention that it is unjust and inequitable for the husband to (in effect) share in any of the Belgian/European property in circumstances where the property was not acquired, in any substantial or significant way, through the joint endeavours of the parties during their marriage partnership and in circumstances where she implacably maintains a current and future intention to preserve it, effectively, in its entirety.
78.To do so would, from her perspective, be to provide, in effect, a gift from her parents to the husband of a significant sum when the plain intention of the wife’s father (as donor) was to achieve the very opposite. That intention is not only asserted by the wife but is manifest in the pre-nuptial agreement earlier referred to.
79.The wife deposes (and it is not suggested to the contrary) that the pre-nuptial agreement provides that “any contributions, gifts or inheritance received by [the parties] from [their] respective families was to remain the property of the person receiving the property and that such property was to be excluded from the matrimonial property”.
80.Whilst ineffective at law to achieve its apparent intended purpose, the pre-nuptial agreement is, in my view, good evidence of the intention of the donor of this significant amount of property. (original italics)
Mr Page then submitted:
·Part VIIIA of the Act, dealing with binding financial agreements, provides a code in respect of them
·Nothing in Part VIIIA however restricts the consideration by the Court to agreements made under Part VIIIA
·Nothing in the Act or otherwise precludes the Court from considering a financial or pre-nuptial agreement made outside of the Act
·Nothing in the Act or otherwise precludes the Court from considering a financial agreement made under foreign legislation.
These matters demonstrably are correct. They are not controversial. They are not in issue.
However, none touches upon the question whether there should be a case stated as opposed to a trial in which the trial judge considers the pre-nuptial agreement in the manner held by the Full Court of this Court in Woodland & Todd (2005) FLC 93-217 at [38] (Finn, May and O’Reilly JJ) concerning pre-nuptial agreements which are outside Part VIIIA:
38.Where parties enter into an agreement concerning property, other than an agreement approved under the provisions of the Act or embodied in consent orders, and one party subsequently commences proceedings under s 79 for an alteration of property interests, the Court must determine the application on its merits having regard to the factors as set out in s 79(4) as they exist at the time of the hearing of the application under s 79 and according to the law in force at that time and not, as to either of those two matters, at the time the agreement was made. There is no threshold test, before embarking upon the s 79 exercise, to determine whether the earlier agreement was just and equitable at the time it was made according to the facts as they then existed and the law then in force. The earlier agreement should be considered (as an indication of what the parties may have regarded as just and equitable at the time), but its provisions only given effect if they coincide with an order which is just and equitable according to s 79 at the time of the hearing. (emphasis added)
In the same decision, reference was made to Woodcock v Woodcock (1997) FLC 92-739:
Indeed, against the proposal for a case stated is the very circumstance that in a trial at first instance the task of the trial judge would be to determine such matters as (I state them non-exhaustively):
· Whether the parties entered the agreement freely
· The circumstances attending the making of it at the time it was made
· The “foreign element”, to the extent relevant, if at all
· The things that have happened since it was made
· Whether effect be given to it, meaning, do its provisions coincide with an order which is just and equitable in this jurisdiction according to s 79 at the time of the hearing.
These, however, are trial questions and not matters for the Full Court upon a case stated for the very reason that evidence is required to be heard as to all of these matters.
Indeed in the present case the husband asserts, affidavit filed 26 July 2011, pars 13-27, that the Country B notary who prepared the agreement did not explain it to him, he did not receive any legal advice about it, he had previously been advised it would not be valid in Australia because of the way it was drafted, he thought it related to assets in Country B, no assets were disclosed before signing the agreement and other matters. Further he said that in Australia the parties’ assets have been purchased in the wife’s name with the proceeds of sale of all of his properties in Country B (pars 19, 20, 66-68) and that if the assets in Australia are not able to be the subject of a s 79 order he will be left with “nothing” (par 128).
The husband supports his case with evidence by a Country B lawyer, Mr D, affidavit filed 26 July 2011, annexure FLR1 including the advice that the pre-nuptial agreement follows a "standard draft of the notary" and that in it, it is not able to be verified “any other type of customization or the existence of prior legal advice”, in circumstances in which he states that only lawyers in Country B can provide legal advice not notaries: see that document, parts F and E.
Against this, the wife deposes, affidavit 22 December 2010, pars 8-9, that she and the husband discussed the terms of the pre-nuptial agreement and decided "It would be wise to divide our assets while we were happily getting married instead of having to fight when we were getting divorced", and, par 17, that the notary read over the terms of the pre-nuptial agreement and asked the husband and her to confirm that they understood them "before we signed". She deposes, also at par 17, that she and the husband signed the pre-nuptial agreement "by our own free will and were not forced by any other person" and that she and the husband "confirmed" that they understood its terms and that they signed freely. The wife deposes further, par 19, as to the notary reading over the terms of the agreement and that the parties each said words in agreement of it and its terms.
The agreement, translated by Ms E, accredited translator, annexure MF5 to her affidavit filed 22 December 2010, provides in effect that after the parties’ marriage they will have “totally separated ownership of assets”, for both “present and future”, excluding any “joint ownership”, with some other provisions and qualifications which presently I need not set out.
The wife's case is also supported by evidence by a Country B lawyer, Mr F, who deposes to advice annexed to his affidavit filed 1 July 2011, annexure FSB4. Interestingly, that advice includes that if the husband and the wife "originate business aside from the marriage partnership" in particular “the acquisition of assets by common effort”, such might cause departure from an agreement which otherwise is “immutable” under Country B law.
The advice, after reference to a Country B judicial decision to that effect, goes on to explain (original translation):
What can happen is that particular life situation business couple eventually escape the application of the rules that govern the property regime in marriage and ultimately attract the application of the rules of civil law, as the condominium institute, to give appropriate treatment and a fair solution, when specifically if check sheet to prevent confusion with security to assign their spouses ownership of their assets.
If this is the case there will be in violation of the pre nuptial marriage contract, only dealing with a situation not contemplated by him. But we must always emphasize that this is the exception to the rule and must be interpreted restrictively.
Thus the wife's Country B lawyer (despite evident translation difficulties in the above extract) seems to say that even under Country B law the otherwise "immutable" agreement might be held judicially to give way to a "fair solution" when there is subsequent acquisition of assets by "common effort", or where equitable considerations are found to arise.
In this vein, in relation to the matters sworn by the husband to which I have referred already I will now set out par 66:
66.During the relationship I disposed of all my assets and used those proceeds to purchase property in the Respondent's name for taxation purposes as I was working overseas. The other reason I agreed to have assets purchased in the Respondent's name was because I was away overseas for long periods of time and as a matter of convenience, only the Respondent's signature would be required to sign any documents necessary in relation to assets in Australia.
The legal position in Country B, at least according to Mr F’s evidence, is not limited to the question whether a pre-nuptial agreement is “binding” according to the laws of Country B, being the assumption on which the wife’s proposed case stated is predicated, but, according to the wife’s own Country B lawyer, its otherwise binding or “immutable” nature, according to the facts, might be found judicially in Country B to yield to other considerations which have occurred during the course of the marriage well after a pre-nuptial agreement was made. The assumption thus already is shown to be of limited application or utility.
The wife’s solicitor, Kisane Fairhurst, in an affidavit filed 2 June 2011, purported to set out a “Concise Summary of Background Facts”, as if agreed facts. However, such are deposed to by her as on “instructions from my client, [Ms Paul]”, and are not agreed by the husband. Some are plainly contentious, for example, par 8, that the notary in Country B “explained” the agreement to the parties. The husband denies this in his affidavit, par 14.
I have referred to the parties’ affidavits because Counsel for both parties listed them at the commencement of their written submissions. I am conscious as submitted by Mr Page (written submissions, par 26) that I am asked only to “express a wish” that the Full Court determine the issue and not to “judge the merits of the issue”, that is, to express any preliminary opinion on what is suggested to be “the question of law” the subject of any case stated, if there be one. If I were to prepare and settle a case stated plainly I would not offer opinion to the Full Court. The observations I have made in relation to the evidence and the observations I have made and will make in relation to the law relate only to the issue whether it is reasonable to state a case having regard to the factual matters in dispute and whether there is any useful question of law to be stated.
Mr Page referred next to Kemeny & Kemeny [1998] FamCA 34. The Full Court there dealt with cause of action estoppel where the foreign court has made a final property order: see at 5.17-5.19. Mr Page submitted (written submissions, par 23) that by analogy if a foreign agreement is binding in the foreign jurisdiction and thus has the effect of finally determining the rights of the parties to their property, such would be sufficient to cause a stay of proceedings issued in Australia. Mr Page described the “Kemeny analogy” as “the crux of the matter”. In Kemeny however the Full Court was dealing with the res judicata principle, which does not apply to pre-nuptial agreements. In Woodcock (above) the Full Court already has made clear in relation to pre-nuptial agreements that the doctrine of estoppel does not and cannot oust jurisdiction when s 79 relief is invoked by a party in Australia with effect that the Act applies. Jurisdiction is only ousted if Part VIIIA applies.
Mr Page submitted (also par 23):
23…That is different from saying that an overseas agreement might be given appropriate weight in arriving at a just and equitable division of assets and resources in property proceedings as has occurred to date. (emphasis added)
As I understand Mr Page’s submission, whilst the question of weight has been considered here, as it was in the United Kingdom in Radmacher, the question whether a foreign agreement can create an estoppel has not. This is erroneous. There is nothing in Woodcock (above) or Woodland (above) to limit the principles in them to pre-nuptial agreements made in Australia. Further, there is already authority to suggest that the circumstance of a pre-nuptial agreement having been made in a foreign country is not relevant when the parties invoke jurisdiction here under s 79. In D & D (unreported), Full Court, Appeal No 125/91, 30 April 1992, the parties had signed a pre-nuptial agreement in the Philippines. Lindenmayer J (with whom McCall J agreed), in the part (unpaginated) at which he deals with Candlish & Pratt (1980) FLC 90-819 and other authorities concerning pre-nuptial agreements said:
The primary and fundamental principle established by those and many other cases, for example, In the Marriage of Hannema (1981) Fam L R 542, Gardiner and Gardiner (1978) FLC 90 -440, Burgoyne and Burgoyne(1978) FLC 90 -467, McIntyre and Maylser (1987) FLC 91 -816 and Klesnik and Klesnik (1987) FLC 91 -837 is that no agreement between the parties to a marriage which has not been approved by the court pursuant to s.87 of the Act can preclude either party from bringing and pursuing an application for alteration of property interests under s.79, or for maintenance under s.74, nor relieve the court of its obligation, in considering such an application, to decide it in accordance with the principles laid down in the Act. …
In Weinhopf Murphy J, when dealing with a pre-nuptial agreement made in Germany, seemed not to doubt that it did not preclude the husband from pursuing relief under s 79. With express reference to D & D, his Honour held that the pre-nuptial agreement made in Germany did not “relieve the Court of its obligation to decide this matter in accordance with the provisions laid down in the Act”: [45] (set out above).
As mentioned, Mr Page said the “idea” of formulating a case stated as to whether the foreign agreement is binding arose out of Radmacher. The majority of their Lordships however in Radmacher, dealing with a pre-nuptial agreement made in Germany, dealt only with the matters relevant to assessing weight, on the basis that jurisdiction was not ousted by a pre-nuptial agreement binding in the place where it was made: see at [2] [3] [52] [68]-[73] and [75], in particular at [2] and [3]:
2.A court when considering the grant of ancillary relief is not obliged to give effect to nuptial agreements—whether they are ante-nuptial or post-nuptial. The parties cannot, by agreement, oust the jurisdiction of the court. The court must, however, give appropriate weight to such an agreement. This appeal raises the question of the principles to be applied by the court when considering the weight that should be attached to an ante-nuptial agreement. …
3.... Under English law it is the court that is the arbiter of the financial arrangements between the parties when it brings a marriage to an end. A prior agreement between husband and wife is only one of the matters to which the court will have regard. …
Mr Page concluded his written submissions as follows:
24…A case should be stated to the Full Court in circumstances where: (a) there exists no legislative provision dealing with the question raised; (b) there are no decisions or dicta which either determine or give guidance as to the outcome of the question raised; (c) the question raised is one of significant public importance; (d) there is a need for certainty as to the question raised; (e) the parties to the proceedings each request a case stated; (f) there exists a need to avoid unnecessary costs to the parties in the proceedings; (g) there exists significant persuasive authority dealing with the issue raised.
25… Whilst these criteria have no legislative or curial source, they are quite clearly met in this case.
Mr Page, by pars 24 and 25, seeks to justify a case stated here as reasonable.
However, his submission in par 24(b) is in my view incorrect: Woodcock; Woodland; D & D; Weinhopf; as explained. It is not as if this Court has never been required to consider a foreign pre-nuptial agreement or its effect. Paragraph 24(e) is incorrect. The husband does not request that there be a case stated and indeed resists that. Paragraph 24(f) is moot in that even if a case stated is answered “Yes” there would still need to be a trial so that there would be no costs savings. In oral argument Mr Page conceded this, and further conceded that the factual matters referred to by Mr Alexander of Counsel, for the husband, in his written submissions would have to be determined by a trial judge. Paragraph 24(g) seems to conflict directly with 24(b).
Mr Alexander – husband
Mr Alexander, for the husband, succinctly put in his brief written submissions filed 25 July 2011 that:
· the issue whether the purported agreement is binding in Country B requires determination (perhaps, but not by the Full Court)
· the proposed case stated would not have the effect of any disposal of the parties’ cases as to assets in Australia (the purported agreement not dealing with such nor purporting to do so)
· there is assumption that the Full Court could or would determine factual issues in dispute between the parties in determining in the first place whether the purported agreement would apply in Australia at all (and if it did with respect to property in Australia).
I accept these submissions, in particular as enlarged upon by Mr Alexander: pars 11-14, 15-18 of his written submissions.
Mr Alexander submitted that the first objective must be findings of fact on matters such as the circumstances in which the agreement was entered, fairness and the effect of it on the parties’ positions now. The matter ought proceed before a trial judge because there is little or no utility in burdening the Full Court with the hypothetical determination proposed. Such would serve to confine the parties to a case to be determined by the Full Court but which could render any decision useless to the parties if at the trial they go outside the parameter of the determination.
Mr Alexander submitted that there would be no prejudice to the wife to have the matter proposed by her to be determined by way of a case stated to the Full Court determined instead by a trial judge, particularly as only a judge at first instance can decide the surrounding facts. There would be no benefit to the parties by any proposed statement by the Full Court on the matter. A case stated thus would be a waste of time and costs. The preferable option is to get on with the trial. There would be no assistance by way of shortening of the trial time, limiting or reducing costs or narrowing of the issues raised. There would however if there be a case stated be a risk in duplication of the proceedings and delay in the necessary progress to trial.
In reply, Mr Page referred to Lady Hale at [171] of Radmacher submitting that there needs to be “a definition of the weight” to be given to the foreign agreement. This seems to be a further step away from the first three formulations of the proposed case stated. Moreover, the submission is curious because, as during argument I observed, if there needs to be “definition” of the “weight” to be given to a foreign agreement, that would carry the inference that it is not binding, because if it is binding, it is binding. If it is not binding, then it becomes a subject of assessment of weight. In Australia, in relation to “weight” the Full Court has said in Woodland what the approach of the trial judge is to be: [38].
Conclusion
Looking back to the matters to be considered I would determine as follows:
·the case stated proposed by the wife is hypothetical, premised as it is upon an assumption that the pre-nuptial agreement is binding on the parties in Country B, in circumstances in which not only is that not agreed, but disputed, and indeed is a matter in respect of which even the wife’s Country B lawyer admits there are exceptions
·even though there is authority to support a case stated in some circumstances based upon assumptions there is no utility in the proposed case stated in the present case given its limited ambit
·as there is no utility, the option of a case stated is not a reasonable proposition as it would be likely to increase the parties’ legal costs rather than contain them given that a trial would be necessary in any event
·the preferable option is for the trial to run its course with the question of the effect of the foreign agreement to be determined by the trial judge according to legal argument at the trial
·the process of a case stated in this instance would lead to the very circumstance which Dawe J said in Bakhtiari should not arise, that is of a judge at first instance “sidestepping” determination of the matter. The passage is important and I will set it out again:
20.The process of stating a case should not be a method of sidestepping a decision by a judge at first instance; neither is it a means for the judge at first instance to avoid making a decision on questions of jurisdiction, power or statutory interpretation.
·there is not any novelty in the legal issues raised in the case.
This is a case thus in which in my view decisions about the proper application of the disputed foreign pre-nuptial agreement should be made by the trial judge at first instance on the particular facts of the case when they are explored at a trial.
I conclude that it is not reasonable to state a case, I do not wish to and accordingly will not.
The application for a case to be stated is dismissed.
I certify that the preceding seventy-two (72) paragraphs are a true copy of the reasons for judgment of the Honourable Justice O’Reilly delivered on 4 August 2011
Associate:
Date: 30 August 2011
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