Redman & Redman
[2013] FamCAFC 183
FAMILY COURT OF AUSTRALIA
| REDMAN & REDMAN | [2013] FamCAFC 183 |
| FAMILY LAW – APPEAL – re-exercise of discretion – consent order sought for property transfer in an intact marriage – negligible stamp duty payable on transfer under Duties Act 1999 (ACT) – consent order could be superseded if circumstances changed (eg breakdown of marriage) – consideration of whether it is just and equitable to make consent order in the circumstances – consent order not made – appeal dismissed. |
| Family Law Act 1975 (Cth) Duties Act 1999 (ACT) Family Law Rules 2004 (Cth) |
| Gabel & Yardley (2008) FLC 93-386 Harris v Caladine (1991) 172 CLR 84 Senior & Anderson (2011) FLC 93-470 Stanford & Stanford (2012) 247 CLR 108 |
| APPELLANT: | Mr Redman |
| RESPONDENT: | Ms Redman |
| FILE NUMBER: | CAC | 298 | of | 2012 |
| APPEAL NUMBER: | EA | 65 | of | 2012 |
| DATE DELIVERED: | 22 November 2013 |
| PLACE DELIVERED: | Melbourne |
| PLACE HEARD: | Canberra |
| JUDGMENT OF: | Bryant CJ, Finn and Watts JJ |
| HEARING DATE: | 14 October 2013 |
| LOWER COURT JURISDICTION: | Family Court of Australia |
| LOWER COURT JUDGMENT DATE: | 27 April 2012 |
| LOWER COURT MNC: | [2012] FamCA 364 |
REPRESENTATION
| FOR THE APPELLANT: | In person |
| FOR THE RESPONDENT: | In person |
Orders
The appeal against the order of Deputy Chief Justice Faulks made on 27 April 2012 be dismissed.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Redman & Redman has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
| THE FULL COURT OF THE FAMILY COURT OF AUSTRALIA AT CANBERRA |
Appeal Number: EA 65 of 2012
File Number: CAC 298 of 2012
| Mr Redman |
Appellant
And
| Ms Redman |
Respondent
REASONS FOR JUDGMENT
Introduction and Background
On 28 February 2012, the appellant husband and respondent wife made an Application for Consent Orders pursuant to r 10.15 of the Family Law Rules 2004 (Cth) (“the Rules”) by filing an “Application for Consent Orders” seeking to have the Court make orders by consent for alteration of property interests pursuant to s 79 of the Family Law Act 1975 (Cth) (“the Family Law Act”).
Part 10.4 of the Rules, entitled “Consent Orders”, contains r 10.15 which is in the following terms:
(1) A party may apply for a consent order:
(a) in a current case:
(i) orally, during a hearing or a trial;
(ii) by lodging a draft consent order; or
(iii) by tendering a draft consent order to a judicial officer during a court event; or
(b)if there is no current case—by filing an Application for Consent Orders.
(1A)A party who files an Application for Consent Orders if there is no current case must:
(a) lodge a draft consent order; or
(b)tender a draft consent order to a judicial officer during a court event.
(2) A draft consent order must:
(a)set out clearly the orders that the parties ask the court to make;
(b)state that it is made by consent;
(c)be signed by each of the parties; and
(d)be accompanied by additional copies of the order:
(i)so that there is a copy for each person to be served and an additional copy for the court; and
(ii)each of which is certified by the applicant’s lawyer, or by each party to the application, as a true copy.
In this case the parties filed an Application for Consent Orders pursuant to
r 10.15(1A) where there was no current case otherwise in the Court. The application form is 25 pages in total and requires completion of information which can be seen as enabling:
(a) in a parenting case, to make orders that are in the best interests of the relevant child or children; and
(b) in a property case, to make orders under s 79 that are just and equitable.
Parties are required to provide information to the Court in the relevant forms sufficient to enable the orders to be made.
The practice in the Family Court, upon the filing of such application, is that a Registrar will deal with the application exercising delegated powers (Harris v Caladine (1991) 172 CLR 84). If the Registrar is not satisfied that it is possible to make orders that are just and equitable, the Registrar can, if thought appropriate, requisition the parties for further information or, alternatively, dismiss the application.
The consent order sought by the parties in this case was:
1.That the property registered in the Australian Capital Territory…be transferred to [the husband] and [the wife] as joint tenants.
The Application for Consent Orders, to which the parties attested as a ‘Statement of Truth’, set out the property of the parties. The value of the house referred to in [6] is said to be $850,000 and it is currently registered in the name of the husband. The husband also has a motor vehicle, some furnishings and funds in the bank worth $10,000. The wife is said to have furniture and furnishings worth $20,000 as well as $10,000 in the bank. The application also indicates that the husband has superannuation interests described as a “defined benefit interest” which appears to be in the payment phase.
An attachment to the application sets out some other relevant information:
·The husband is an Australian citizen.
·The wife is an Eastern European citizen permanently resident in Australia.
·The wife migrated to Australia in 2009 to marry the husband.
·The wife and husband have a young daughter and live in the property the subject of the application, which is their “family home”.
·Since 2009, they have arranged their financial affairs so that they jointly own and are jointly responsible for their bank accounts and credit cards.
·They have no liabilities.
It is further asserted in the attachment to the form that “[t]his application is essentially for a consent order that the family home, owned by the Applicant, be owned by the Applicant and the Respondent jointly”. It is asserted that some other assets are not intended to be changed – the husband’s superannuation payments and the husband’s car, although the husband’s superannuation payments are said to be paid into the joint bank account of the husband and wife.
The attachment indicates that the husband was a former Commonwealth public servant who is now retired. He has a superannuation interest and has expectations that “in the near future” he will be the beneficiary of substantial assets from his family. It is said that the husband and the wife “will sort out those matters in due course”.
It is further said that the wife is a specialist health practitioner and while her potential earning capacity is high, this is dependent upon her completing the Australian professional registration process. It appears that she is not in the workforce at the present time. It is asserted that the wife otherwise has no assets, other than some bank interest from the joint account.
A perusal of the application reveals that the section headed “Statement of independent legal advice” was not completed.
Proceedings
On 9 March 2012, a Registrar dismissed the Application for Consent Orders. The Registrar wrote to the parties in a letter of the same date indicating that she had declined to make the consent order requested, and set out her reasons for so doing. She concluded by recommending that the parties obtain independent legal advice with respect to the proposed consent order.
Following the dismissal of the Application for Consent Orders by the Registrar, the husband filed an application on 28 March 2012 to review the decision of the Registrar (Harris v Caladine and r 18.10 of the Rules). Such review operates as a hearing de novo. On 27 April 2012, the application for review of the Registrar’s decision came before Deputy Chief Justice Faulks. The transcript indicates that both the husband and wife appeared. The hearing was of short compass. His Honour asked why the husband was asking that the order be made and the following conversation ensued:
[THE HUSBAND]: We have deliberately set out to make our financial arrangements so that they were as equal as possible. My wife is a migrant from [Eastern Europe] - - -
HIS HONOUR: Yes, I've read the document so I know that.
[THE HUSBAND]: She speaks reasonable English but from my perspective, it’s much easier if I can set things up in such a way to - if the worst happens and I was to die - then things are much easier for her. So this was the last of the significant assets we had and it seemed to me useful to put the property in joint names so that things happened - - -
HIS HONOUR: Don't have any argument about that but why would you simply not file a transfer in the Titles Office and transfer it?
[THE HUSBAND]: Because we chose to go this way.
HIS HONOUR: No, you didn’t choose to go this way; you chose to go this way to avoid stamp duty.
[THE HUSBAND]: Well, that may be so. So what?
(transcript 27 April 2012, p 2, lines 10 – 29)
His Honour made some comments indicating concern that the marriage had not broken down and that this appeared to be a device to avoid stamp duty, and expressed concern that once the order was made, there would be no possibility of having further orders made. His Honour went on to point out that there were not enough details to make an order which was just and equitable: for example there were no details of the husband’s superannuation or the potential income that the husband and the wife would have in the future.
His Honour refused the application and delivered reasons for judgment. As they are short, the reasons bear setting out in full:
1.This application comes before me on review of a decision of the Registrar refusing to make the orders sought by the parties.
2.Upon enquiry of [the husband] it became clear by inference, if not by direct admission, that the sole purpose for the orders was to transfer the family home in an intact marriage from his name to the names of both himself and his wife and to employ the Family Law Act 1975 and the consent orders system to achieve this so that stamp duty might be avoided.
3.Not only is it inappropriate and an abuse of process for orders to be made in such circumstances, but where the parties were unrepresented it was not clear to me that they would be aware of the fact that any orders made in this regard would be permanent orders and would preclude them from seeking to have other orders made if they subsequently did become engaged in a matrimonial dispute and were to separate and seek to divide their property. My concern in this regard is increased by the fact that [the husband] suggested that his wife’s knowledge of English was not as strong as it might be.
4.Finally, it is necessary for any orders that I might make to be just and equitable and the information available in relation to such orders was not available in the material filed. This included, but is not confined to the failure to provide any details in relation to the husband’s superannuation entitlements.
This is the husband’s appeal against that decision. There was some delay in having the matter heard as the parties apparently wished the matter to be heard in Canberra (rather than Sydney) where the Full Court rarely sits.
Grounds of Appeal
The grounds of appeal are as follows:
The judgement [sic] is contrary to law, specifically in that -
1.There was and is no evidence of any kind to support the inference made by the court that “the sole purpose for the orders was to transfer the family home in an intact marriage from his name to the names of both himself and his wife and to employ the Family Law Act 1975 and the consent order system to achieve this so that stamp duty might be avoided”.
2.There is no rule of law to support the proposition that it is “inappropriate and an abuse of process for orders to be made in such circumstances”.
3.If there was such a rule of law, it would not be applicable because the “circumstances” upon which that rule of law could apply did not and do not exist.
4.The concern expressed by the court, based upon the court’s lack of clarity about the parties’ awareness of certain facts, is inappropriate and unnecessary.
5.If the material filed did not make available sufficient information to reach a conclusion that the orders sought were just and equitable, such a conclusion could not be reached in any case where a consent order was sought based on the information made available on the filing of the requisite form. In reality, the court made no assessment of the information filed.
6.The claim that there was a failure to provide details in relation to the husband’s superannuation entitlements is incorrect.
7.The claim that there were other failures to provide any details is devoid of content and is meaningless.
The orders sought were:
1.The appeal be allowed.
2.The order be set aside.
3.The application for consent orders be granted.
Hearing of the Appeal
The summary of argument and list of authorities was filed ostensibly on behalf of both parties. At the hearing of the appeal, neither the husband nor the wife, who appeared with him, was represented.
To the extent that the summary of argument deals with the Registrar’s decision, we do not need to comment upon it. The hearing before the Deputy Chief Justice was a hearing de novo and it is his Honour’s decision which is relevant to our determination.
At the commencement of the appeal, the Court informed the parties that even if there were parts of his Honour’s decision where his Honour had fallen into error, if the Court came to the same conclusion, on a re-exercise of discretion, namely that the order sought was not just and equitable, then the Court would nevertheless dismiss the appeal.
The Court further indicated to the husband that:
(a)In so far as it was sought to transfer an interest in the husband’s property to the wife, pursuant to s 72 of the Duties Act 1999 (ACT) (“the Duties Act”), the transfer could be effected by payment of stamp duty of $20. The requirements are that the transfer be between partners, the property be the partners’ principal place of residence and the transfer results in the property being transferred from one to both, including as joint tenants. The proposed transfer appears to fulfil these requirements.
(b)Notwithstanding that the order, if made, would effect a transfer of the husband’s interest in the home to himself and the wife as joint tenants, such an order would not oust the jurisdiction of the Court in the future to make further orders for property settlement in respect of other property of the parties to which they may be, or may become, entitled, including superannuation interests.
(c)Although the exercise of s 79 of the Family Law Act is not dependent upon parties being separated, where parties who are not separated seek to invoke the jurisdiction of the Court, the Court would need to be satisfied that it is just and equitable to make any order before embarking upon a consideration of the matters in s 79(4).
The Court indicated that, having regard to these facts, it was not clear to the Court why it would be just and equitable to make any orders at all. The marital relationship between the parties had not broken down and no apparent benefit would accrue to the wife which could not be achieved by other means. In circumstances where documents indicated no legal advice had been obtained by either party, but more importantly by the wife, the Court invited the husband to provide an explanation of why the order should be made. The husband’s somewhat curious response was to the effect that he would like to have a third set of reasons as to why the application was dismissed. When asked whether he would like to say anything else, he said, “No I would not”. The wife declined an invitation to make submissions.
Discussion of Grounds of Appeal
To the extent that the trial judge inferred that the sole purpose of the order was to transfer the family home from the husband’s name into the names of both spouses in an intact marriage so that stamp duty might be avoided, notwithstanding what might be thought to be an implied admission by the husband to this effect, it would appear not to have been correct when regard is had to sub-ss 72(1) and (2) of the Duties Act. In this respect, his Honour’s finding that the sole purpose of the application was to employ the Family Law Act and the consent order system to avoid stamp duty cannot stand.
Similarly, at [3], his Honour seems to have concluded that this order, if made, would preclude the parties from having other orders made if they were later to separate, become engaged in a matrimonial dispute and seek to divide their property.
In Gabel & Yardley (2008) FLC 93-386, Bryant CJ and Coleman J said at [57]:
The legislative framework, and the authorities to which we have been referred, suggest that the Court’s power to make orders with respect to settlement of property is not necessarily exercisable at only one time, and can properly be exercised by a succession of orders until the power to make orders with respect to property is exhausted. Logic suggests that the power to make orders for settlement of property will be exhausted or “spent” when there remains no property of the parties to the marriage or either of them with respect to which orders by way of alteration of interests of property could be or have been made.
In the same case at [69], in relation to whether the Court could make different orders under s 79 in relation to property that was already the subject of “interim orders”, their Honours said:
As we have earlier explained, in our view the focus of our attention should be whether or not the power to make orders pursuant to section 79 has been exhausted. Unless it has, we see no basis in law or logic for concluding that further orders may not be made with respect to property the subject of earlier orders. There can be little doubt that the exercise of power under section 79 involves the exercise of discretion by reference to the provisions of Part VIII of the Act. It would be surprising if, in circumstances clearly involving less than such an exercise of discretion, orders made pursuant to the power conferred by section 79(6) of the Act could not be revisited and altered. Indeed, there may be cases where the Court could only exhaust the power conferred by section 79 in a “just and equitable” manner as required by section 79(2) of the Act by altering an earlier order with respect to the property of the parties or either of them as learned senior counsel for the wife submitted.
Accordingly, his Honour’s finding that any orders made would be permanent orders and preclude the wife from seeking to have any other orders made if the parties became involved in a matrimonial dispute cannot stand. Thus, his Honour’s conclusion that it would be an abuse of process for the order to be made must, for these reasons, be seen to be erroneous.
To the extent that the grounds of appeal address these issues, they must succeed. However, the Court would re-exercise the discretion of the trial judge and as part of the re-exercise must determine whether, in any event, it is just and equitable to make the order sought.
Re-Exercise – is the Order Sought Just and Equitable?
There was no issue that the marriage between these parties was intact and had not broken down. As we have indicated, the Court has power under s 79 to make orders in circumstances where the parties’ marriage is “intact” and had not broken down (Stanford & Stanford (2012) 247 CLR 108 at 117-8). At
p 122, the High Court said, in relation to the exercise of jurisdiction under s 79:
The fundamental propositions that have been identified require that a court have a principled reason for interfering with the existing legal and equitable interests of the parties to the marriage and whatever may have been their stated or unstated assumptions and agreements about property interests during the continuance of the marriage.
In this admittedly intact marriage, the parties are seeking an order of the Court, where jurisdiction is usually exercised on the breakdown of the marriage, to transfer interests in property between the husband and wife by consent. First the Court must consider whether it is just and equitable to make an order under s 79(2), without conflating the considerations in s 79(4). The fact that the parties consent to the making of an order is not of itself sufficient to satisfy the requirements of s 79 of the Family Law Act. The court has an independent responsibility to satisfy itself that the requirements of the Family Law Act are met.
The requirement for the court to exercise an independent discretion to the making of orders by consent was comprehensively discussed in Harris v Caladine. At pp 102-3, Brennan J said:
In making a consent order determining the matters in issue between the parties in an application under s. 79(1), is the Court bound to take into account the matters prescribed by s. 79(4)? If the Court is bound to do so, the making of a consent order is no mere formality…
If the contracting parties were entitled as of right to the making of a consent order in an application under s. 79(1), the provisions of s. 87 would be largely otiose. The parties could simply require the Court to make an order giving effect to their agreement rather than seek the Court's approval of their “maintenance agreement”. Presumably, the reason why court approval of a “maintenance agreement” in any of its possible forms is required when the agreement is in substitution for rights under Pt VIII of the Act is that the community has an interest in ensuring that “provisions ...with respect to financial matters are proper”, to use the words of s. 87(3). The same reason equally calls for the exercise of a discretion in the making of a consent order with respect to financial matters when the parties have reached agreement on their respective interests in their property.
…
It does not follow that, when a consent order is sought in a s. 79 application, it is necessary to conduct an inquiry into each of those factors. The Court may be satisfied that a provision is proper by reference not only to the material before the Court relating to the factors mentioned in s. 79(4) but by reference to the advice available to the respective parties and the consent which they respectively give to the making of the order.
At p 124, Dawson J said:
In considering what order, if any, should be made under s. 79, a court is required under sub-s (4) of that section to take a number of matters into account, including the various financial contributions made by the parties to the marriage. And sub-s (2) provides that a court shall not make an order under the section unless it is satisfied that, in all the circumstances, it is just and equitable to do so. The fact that an order is sought by consent does not relieve a court, or a Registrar, from compliance with the requirements of the section, but it may render compliance much less demanding. Provided that a court, or a Registrar, is adequately informed, where the parties are at arms length and are properly represented little more than consent may be needed to establish that the requirements of the section have been met…
Section 87, which was referred to by Brennan J, has been repealed and Part VIIIA of the Family Law Act now allows agreements to be binding without court approval if the requirements of s 90G of the Family Law Act are met. Compliance with the requirements of s 90G concerning the provision of legal advice is “mandatory” (Senior & Anderson (2011) FLC 93-470). Provision is made for agreements to be set aside, but only in limited circumstances. Absent an order setting aside an agreement, the Court’s jurisdiction is ousted to the extent provided by the agreement.
These parties have not entered into an agreement under s 90G but nevertheless seek the Court’s imprimatur to the making of an order. The Court is not relieved from its obligation to consider whether the making of the order is just and equitable under s 79(2) simply because the order is said to be by consent. In particular, both Brennan and Dawson JJ remark upon advice being available to the parties as one of the matters to which regard would be had in considering whether to make orders by consent.
While on its face the order might be generous to the wife by transferring an interest to her, there are concerning aspects in relation to the exercise of jurisdiction. First, in order to transfer his interest in the property, presently in his name, to both him and his wife, the husband does not require an order under the Family Law Act. For the payment of $20 stamp duty, the parties are at liberty to make that arrangement directly without reference to the Court. Secondly, given that the wife would not be precluded from seeking orders against other property (including superannuation) in the event the parties did later separate, there is apparently no utility in the making of an order under the Family Law Act.
In this case there is virtually no evidence of the contributions that the parties have made to the property, although it can be inferred that the husband acquired the property as it is in his name. Nevertheless, contributions such as those of homemaker and parent made by the wife in relation to a young child might also be inferred. Importantly, no evidence was provided to this effect.
The husband’s evidence is that he is likely to receive “substantial assets from his family” which are not identified. The reasons for which the consent order was sought, once the matters the Court raised with the husband were brought to his attention, might have been explained in a manner which gave sufficient information to the Court to make the order sought. However, the husband declined to make any submission which would have provided the Court with an indication of why this unusual order was being sought in the circumstances of a continuing and intact marriage. On its face and without further explanation, the order appears to be of no utility. We have concerns about why this order is being sought especially as the wife is an Eastern European citizen, has only been in Australia since 2009, and there is no evidence she has received independent legal advice. Nor do we know what English language skills she has. We would be concerned about making an order which, on its face, may seem to have a degree of finality, even if as a matter of law it does not.
As the High Court said in Stanford which we have cited at [31], the court must have a principled reason for interfering with the existing legal and equitable interests of the parties to the marriage. In our view, in the circumstances of this case, such a reason is not apparent and we should not exercise discretion to make an order in an intact marriage which is unnecessary to achieve what is sought by the parties.
As we would not re-exercise discretion in favour of the husband (and wife) to make the order sought, we would therefore dismiss the appeal.
I certify that the preceding forty-one (41) paragraphs are a true copy of the reasons for judgment of the Honourable Full Court (Bryant CJ, Finn and Watts JJ) delivered on 22 November 2013.
Associate:
Date: 22 November 2013
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