RBH & JIH - [2005] FamCA 226

[2005] FamCA 226

FAMILY LAW ACT 1975

FAMILY COURT OF AUSTRALIA

AT MELBOURNE

MLF 1155 of 2000

IN THE MARRIAGE OF:

RBH

(Husband)
and

JIH

(Wife)

EX TEMPORE JUDGMENT DELIVERED BY

THE HONOURABLE JUSTICE YOUNG

Date of Hearing: 23 March 2005
Date of Judgment: 23 March 2005

Appearances: Mr McIntosh, solicitor for the applicant husband
Mr Robinson, solicitor for the respondent wife

In the matter of H, file 1155 of 2000, the parties are before the court today in agreement and to seek a variation of or setting aside of the existing orders in relation to settlement of property. The primary issue relates to superannuation. What has occurred in this case is that the trustee of the husband's superannuation fund, the Emergency Services Superannuation Fund ("ESSS"), has declined to implement orders made by consent of this court.
Mr McIntosh, solicitor, appears for the husband. Mr Robinson, solicitor, appears for the wife.
I propose to set out a brief background to the factual matters in issue.
The parties negotiated a settlement of property, including superannuation, and signed minutes of orders on 23 December 1999. Those orders were subsequently presented to the court, in chambers, for an order to be made by a Deputy Registrar pursuant to Order 14 (as it then was) of the Family Law Rules. Deputy Registrar Boers on 2 February 2000 made those orders.
The solicitors who were then acting for the parties had filed an application for orders to be made by consent on 12 January 2000 and at that time had provided an agreed statement of facts which had been prepared by the solicitor for the husband. That document disclosed the value of the assets of the parties, which primarily were a home subject to a Commonwealth Bank mortgage and the husband's superannuation entitlements. Pursuant to the minutes of order what the parties agreed was that the wife would take a transfer of the home subject to its mortgage debt, that there would be a distribution of chattels and other personal possessions, and, as is provided for in paragraph 6 of the order, the husband would retain his superannuation entitlements, subject to a payment of $80,000 to the wife, together with interest calculated thereon from 1 September 1999.
It is important to reflect upon paragraph 6 of those orders as sought by the parties and as made by the court on 2 February 2000. It reads as follows:
“That in the event that legislation is introduced and that the Emergency Services Superannuation Fund managers consent, there will be no monetary penalty, the parties by way of income tax or generally, the husband will in the event that he is able so to do, sign all documents necessary to assign/transfer to the wife from his superannuation fund the sum of $80,000 ("the said sum"), together with any interest accrued thereon as gazetted annually, calculated from 1 September 1999, calculated annually provided that in the event that it is not possible to assign/transfer the said sum to the wife, plus interest, the husband shall so soon as he receives the superannuation payout, forthwith pay to the wife the sum of $80,000, plus accrued interest thereon. In the event that the husband elects not to retire … upon attaining the age of 55 years or such later time as the parties both agree in writing, he shall, as and from 28 August 2004, pay directly to the wife quarterly in advance, interest on the $80,000, the interest rate then prescribed by the Emergency Services Superannuation Fund”.
That order raises a number of significant concerns. On its face it is both confusing and uncertain. It was drafted by then solicitors and adopted by the parties on the assumption that the then discussed superannuation legislation would be introduced into and approved by Federal Parliament. It otherwise provides uncertainty as to the calculation and payment of interest and the interest rate to be determined by the trustee of the fund, and otherwise as to the "escape clause" should payment not be made.
Nevertheless, with that order as part of the overall property settlement, the Deputy Registrar approved in February 2000 those orders and pronounced that pursuant to section 79 they would then operate as between the husband and wife in alteration of their property interests.
By reference to the further documents filed by the solicitors for the husband what has occurred in this case is that the trustees of ESSS have declined to implement those orders. There is an affidavit of the husband filed 11 March 2005 annexing various correspondence from the superannuation fund trustees. That correspondence highlights the real difficulties that the trustee has in its interpretation and understanding of the order and in any jurisdiction it might have to implement the order.
There is no retrospectivity applicable to the operation of the Family Law Legislation Amendment (Superannuation) Act 2001. It simply does not apply to property settlements that have already been finalised prior to the date when the legislation came into effect, that being 28 December 2002.
The trustees highlighted that fact, together with the issues of and related to the operative date of the commencement of the order, their obligation to assess interest and make provision for interest payments in favour of the wife in accordance with those orders. The trustees by letter suggested to the husband that he needed, as at January 2004, to obtain further legal advice in relation to the superannuation split and that letter and then the husband obtaining such legal advice has led to the institution of proceedings in this court and ultimately to the submissions made this day.
On 11 March 2005 the husband's solicitors filed a Form 1 application for final orders. What was sought was in the following terms:
(1) That pursuant to section 79A(1)(b) of the Family Law Act 1975, paragraph 6 of the orders of Registrar Boers dated 2 February 2000 be set aside.
(2 That this Honourable court make the following orders by consent:
(i)that subparagraph (i) to (v) of these orders are binding upon the trustees of the Emergency Services Superannuation Fund;
(ii)that the base amount to be allocated to the wife out of the interest of the husband on the fund … is $100,000;
(iii)that whenever the trustee of the fund make a splittable payment in the interest held by the husband in the fund, the trustee pay to the wife, which is calculated in accordance with Part 6 of the Family Law (Superannuation) Regulations 2001, there be a corresponding reduction in the entitlement the husband would have had but for these orders;
(iv)that paragraph (ii) is effective from the date set out in subparagraph (v) of these orders;
(v)that the operative date is four business days from the date that these orders are served on the trustee of the fund, and insofar as the fund is permitted to do so, the husband and the wife thereafter do all things necessary and sign all documents necessary to effect the rollover of the wife's entitlements in the fund to an alternative complying fund;
(vi)that the husband pay all taxes and charges payable on the splittable payment to the wife”.
The husband filed a Form 2 application on the same day seeking identical interim orders.
In support of each of those applications the husband filed his affidavit earlier referred to of 11 March 2005, together with an updated financial statement.
There are no affidavits or responses on file from the wife. She did appear at court this day, together with her solicitor. The wife filed a document by way of an acknowledgment of service and her solicitor filed a notice of address for service.
It was fundamental to the proceedings before me that all orders sought were by consent. The wife through her legal representative confirmed her consent to the proposed orders this day, the only variation being that she requested the court in respect of the sum of $100,000 to direct that payment to her recently established superannuation fund (the Australian Retirement Fund).
The first matter to be observed is that in paragraph 6 of the original orders what was proposed was a sum of $80,000 be assigned to the wife together with interest thereon calculated from 1 September 1999. The parties have agreed and by consent asked the court to adopt the position that that interest equates to $20,000. That explains the variation in what is sought today, rather than a lump sum of $80,000, a lump sum of $100,000 which includes all interest payable up to and including 1 December 2004.
The parties have a private arrangement in respect of the period for which interest would be paid from 1 December 2004 until this day. There has or will be a financial adjustment of $2000 as between themselves in that regard. Accordingly, therefore, what the court was asked by consent to do was to fix the splittable payment in favour of the wife as at this day in the sum of $100,000 and direct the trustee of ESSS to pay or transfer that sum to the nominated superannuation fund of the wife and thereafter, in her own fund, she will derive bonuses or interest payments thereon.
The court was made aware, in general terms, of certain of the current financial circumstances of the parties by the husband filing his updated form 13 financial statement. The facts were before the court that there has been a significant growth in the value of the husband's superannuation entitlements. They now total $780,000 approximately, whereas, as at December 1999, they were valued at approximately $405,000. The court does not know the increase in value of the wife's property which, from the document filed on her behalf this day, it would seem that she still owns and occupies. I record these brief updating financial circumstances not on the basis that the court is inclined to investigate a section 79 order, but to confirm that there has been some updating of the financial circumstances of the husband and therefore the wife and her solicitor appearing this day are aware that there are, as could only be reasonably expected, significant ongoing financial changes in the circumstances of the parties, certainly the husband, over the past five years.
I take care to repeat that the court is not asked to re-exercise any section 79 jurisdiction. It is not asked to set aside the totality of the orders made in chambers by Deputy Registrar Boers. It is by consent asked only to vary Order 6 of those orders and substitute, with the consent of the parties, what is now considered to be an appropriate order.
I turn now to the legislation. The Federal Parliament enacted the superannuation legislation as from 28 December 2002. These superannuation splitting laws establish a regime of powers given to courts exercising jurisdiction under the Family Law Act 1975 (Cth) and responsibilities given to trustees under both the Family Law Act and the Superannuation Industry Supervision Laws. As I have already considered, this legislation has no retrospectivity and does not apply to property settlements finalised prior to the date of the implementation. Accordingly parties are not able, simply by consent, to set aside a final property order previously made so that it could then be varied by way of an appropriate superannuation split.
Section 5 of the Family Law Legislation Amendment (Superannuation) Act 2001 provides as follows:
(1) Subject to this section, the superannuation amendments apply to all marriages, including those that were dissolved before the start-up time.
(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 start-up time.
(3) If a section 79 order that is in force at the start-up time is later set aside under paragraph 79A(1)(a), (b), (c), (d) or (e) of the Family Law Act, then the superannuation amendments apply to the marriage from the time the order is set aside.
I otherwise in the particular facts of this case will not refer to subsections (4) and (5) of that section.
It is important to understand that the exclusions provided within subparagraph (2) of section 5, apply only to an order made setting aside or varying an order pursuant to section 79A of the Family Law Act. I say that because the qualification does not extend to section 79(1A) of the Family Law Act 1975 which provides:
“A court may, on application by a person affected by an order made by a court under section 79 in proceedings with respect to the property of the parties to a marriage or either of them, and with the consent of all parties to the proceedings in which the order was made, vary the order or set the order aside and, if it considers appropriate, make another order under section 79 in substitution for the order so set aside”.
On the facts of this case and with the consent of the husband and wife in my opinion it is, nevertheless, not open to the court to make any order on the basis of section 79(1A) as that is expressly excluded from operation as one of the qualifications to section 5 of the Family Law Superannuation Legislation (supra).
The basis of the husband's application is that the order should be set aside on the grounds set forth in section 79A(1)(b), that is:
“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”.
The submission of the solicitor for the husband is that it is impracticable for part of the order, that is, paragraph 6 of the order, to be carried out. The basis of that suggestion of impracticability is that the trustee of the superannuation fund has declined on the basis of its understanding of its jurisdiction to implement the order and calculate the interest and establish a splittable payment to the benefit of the wife.
I have previously had the occasion in an unreported decision in the matter of PAJ v GMJ (2003) FamCA 751 (2 July 2003) to consider this issue and the earlier cases touching on what is impracticable. In that case it said as follows:
48. Kay J in La Rocca v 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 (Ellis, Lindemeyer and Joske JJ).
49. At page 85,059 Kay J expressed the view that, "… section 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 can 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 section 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.
50. 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”.
The same observations that I made in PAJ v GMJ (supra) are applicable in this case. The solicitors did endeavour to second-guess the legislation, did provide alternatives within Order 6 itself and were clearly aware - and no doubt their clients were so advised - that the settlement was predicated upon and the orders depended upon the future introduction of Federal Legislation as was anticipated. I observe in this case that these orders were settled by the parties in December of 1999, almost three years prior to the passing of that legislation.
I otherwise on the issue of impracticability have considered the definition provided for the In the Marriage of Rohde (1984) FLC 91-592 at p.79,768. What is said in that case expanded upon as it was in Cawthorn (supra) confirms to me the risks associated with pre-empting the legislation, and as in PAJ v GMJ in this case I am not able to accept that the ground of impracticability is satisfied.
The other subsection to section 79A that has been suggested might be applicable and that provided for as an exception within section 5 of the superannuation legislation relates to subparagraph (a) thereof which provides as follows:
(a) that there has been a miscarriage of justice by reason of fraud, duress, suppression of evidence (including failure to disclose relevant information), the giving of false evidence or any other circumstance.
There is no issue or fact to found any claim for fraud, duress or suppression of evidence. The issue in this case can only be whether there has been a miscarriage of justice by virtue of any other circumstance. As I understand the way an argument could be developed, it is that the Deputy Registrar in February of 2000 exercised a power or made an order that was not then within the jurisdiction of the Family Law Act and dealt with superannuation in a manner that the court could not and should not have sanctioned. The parties themselves are therefore not able to have concluded their section 79 alteration of interest in property order because that part as dealt with in paragraph 6 of their orders remains incomplete.
I have considered for the purposes of this extempore judgment the decision In the Marriage of Suiker (1993) 17 Fam LR 236, (1993) FLC 92-436, a decision of a Full Court (Nicholson CJ, Baker and Strauss JJ). There are three paragraphs in that judgment that I found of considerable assistance were I to make a determination that there has been a miscarriage of justice in this other circumstance. Those paragraphs from the Full Court are:
“It is implicit that the consent to an order must be informed consent. The consent to the order is itself part of the judicial process on which the court places reliance. If that consent is based on misleading or inadequate information, then there may be, in our opinion, a miscarriage of justice either by reason of "the suppression of evidence" or by reason of "any other circumstance." (at page 242)
In our view, in appropriate cases, the order itself in the light of the true facts may bear upon the question whether there has been a miscarriage of justice. (at page 242)
As regards the views expressed in Clifton v Stuart (1990) 14 Fam LR 511 that the expression "miscarriage of justice" relates to the integrity of the judicial process, we are of the opinion that this passage was not intended to refer only to the hearing in the Family Court, but that the expression "judicial process" can refer to a variety of matters and circumstances which had an influence on the outcome of the litigation. It is neither necessary, nor desirable to attempt to define the matters which may amount to a miscarriage of justice by reason of any other circumstance in the relevant sense. (at page 243)”.
I do not propose on the particular facts of this case and because of the issue to which I will next turn to make a finding that the facts fall within a miscarriage of justice because of any other circumstance. To my mind it is certainly arguable but not conclusive.
The orders made by the court on 2 February 2000 were made in chambers by a Deputy Registrar. The solicitor for the husband has this day sought at the invitation of the Court, the leave of the court to make an application to extend the time in which to review and thereafter to embark upon a review of the decision of the Deputy Registrar.

The solicitor for the husband’s submission is substantially that the actions of the Deputy Registrar in making the orders in chambers were inappropriate given his then delegated powers, and more particularly, given that the Federal superannuation legislation was contemplated but long from enacted.
Pursuant to the Family Law Rules, the court has a specific power to extend time as provided for in Rule 1.14 which states that a party may apply to the court to extend the time fixed pursuant to these Rules or by a procedural order. That application was made orally this day. It was not opposed. Indeed it was consented to by the solicitor for the wife. On that basis I indicated to practitioners that I would grant an extension of time so that I could this day review the decision of the Deputy Registrar to pronounce these orders in chambers.
The power to review the decisions of a Deputy Registrar or indeed of a Judicial Registrar or Registrar are provided in Part 18.2 of the Family Law Rules. Specifically, the power of the court on review is detailed in Rule 18.10 which provides that a court must hear an application for a review as an original hearing and details the evidence that the court may receive in that hearing.
I pause there to emphasise that by consent of the husband and wife the court is asked only to review paragraph 6 of the order. I am not asked to reopen the entirety of the section 79 proceedings. I am not asked to look at the current market value of the property, both real property and superannuation entitlements. I have before me a draft order that the husband and wife wish to implement and pursuant to which $100,000 will be directed as a superannuation splittable payment to the wife's current superannuation fund.
I have determined in the particular facts of this case and on the basis of what the legal practitioners for the parties have addressed the court and with the consent of the parties that I can and will restrict my consideration of the varying of the current order to that contained within paragraph 6.
In Gallo v Dawson (1990) 93 ALR 479 it was said by McHugh J, at 480 (and cited with approval by the Full Court of the Family Court in McIntyre (1994) FLC 92-468 at 80,859) as follows:
The discretion to extend time is given for the sole purpose of enabling the court or justice to do justice between the parties … this means that the discretion can only be exercised in favour of an applicant upon proof that strict compliance with the rules will work an injustice upon the applicant. In order to determine whether the rules will work an injustice, it is necessary to have regard to the history of the proceedings, the conduct of the parties, the nature of the litigation and the consequences for the parties of the grant or refusal of an application for extension of time.
In the Marriage of Tormsen (1993) FLC 92-392; (1993) 18 Fam LR 232 the Full Court (Fogarty, Nygh and Burton JJ) said:
“The fundamental issue in application for extensions of period of time prescribed by rules of court is whether this will enable the court to do justice between the parties … In that connection the court must weigh the right which the respondent to the application prima facie has to attain the benefit of the judgment … A failure to explain the delay adequately can certainly lead to a conclusion that justice demands that the application be dismissed, but in appropriate cases the interest of justice may outweigh the absence of an adequate explanation”.
The property orders which the parties agreed to in 1999 and which are the subject of an order of the court cannot be completed. In the current circumstances the trustee of ESSS will not, rightly, implement the orders that are beyond its jurisdiction and, on their face, are very difficult to understand. The parties are effectively in somewhat of "a no-man's land". There is no issue of delay. The parties, or at least the husband either personally or through his current solicitor, has been endeavouring to negotiate an appropriate order or outcome with the trustee. There is no hardship to the wife. She desires to retain the benefit of her property judgment subject to the renegotiated superannuation splittable interest whereby she now receives $100,000 but with no interest arrears.
In the circumstances, bearing in mind that the parties and the court desire a just outcome, bearing in mind the main purpose of the Family Law Rules as provided for in Rule 1.04, and accepting of the need to vary the order by way of rehearing, in all of the facts and circumstances relevant to that consideration I propose to exercise my powers of review and to set aside paragraph 6 of the orders of the court made 2 February 2000 and to substitute therefore orders which have been negotiated and fine-tuned between the parties and which this day are said to be appropriate, just and equitable.
Before I pronounce the orders I do want to respond to one other submission made by counsel for the wife and supported by counsel for the husband. That was the suggestion that on the basis of my earlier decision in PAJ v GMJ I should find that paragraph 6 of the orders of the court of 2 February 2000 was in fact an interim order, and on that basis there would be jurisdiction with the court to make orders of a final nature in relation to the issues now before the court. I made it very clear to the solicitors during their submissions that I do not regard paragraph 6 when it was made as an interim order. First, it is artificial to remove paragraph 6 from the balance of the orders. Secondly, all of the orders were intended as final orders and I am more than certain that was what the parties then intended with their then solicitors. For those purposes I reject any submission that part of the prior orders of the court were interim in nature.
I therefore order as follows:
1.THAT upon the application of the husband an extension of time be granted to review the orders of Deputy Registrar Boers made 2 February 2000 (‘the Orders”).
2.THAT such leave having been granted paragraph 6 of the orders be set aside.
3.THAT as to superannuation issues:
(i)a base amount of $100,000.00 be allocated to the wife out of the interest of the husband in the Emergency Services Superannuation Fund (“the ESSS Fund”)…;
(ii)the trustee of the ESSS Fund, upon payment of the sum of $100,000.00 on behalf of the wife make a corresponding reduction in the entitlement the husband would have had in the ESSS Fund but for these orders;
(iii)that the payment to the wife be made to her member account [with the] Australian Retirement Fund…;
(iv)that the operative date for these orders be four (4) business days from the date upon which they are served on the trustee of the ESSS Fund and insofar as that Fund may then require each of the husband and wife sign all documents, do all acts and things and give all necessary and proper instructions to effect payment of the wife’s splittable sum of $100,000 to her nominated complying fund.
(v)these orders be binding upon the trustee of the ESSS Fund.
(vi)the husband be solely responsible for and have debited to his members account by the trustee any fees or charges incurred by them of or related to this payment to the wife in compliance with these orders.
4.THAT otherwise the Form 1 and Form 2 applications of the husband filed 11 March 2005 be dismissed.
5.THAT the extempore reasons for judgment be transcribed, be placed upon the Court file and be made available to practitioners for the parties.
IT IS NOTED
6.THAT otherwise the husband and wife intend that the s.79 Orders made on 2 February 2000 remain in full force and effect.

I certify that the preceding 46 paragraphs are
a true copy of the reasons for judgment herein
of The Honourable Justice Young

………………………………………………………..
Associate
Date: 5 April 2005