Rushby and Sherry
[2004] FMCAfam 260
•2 June 2004
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| RUSHBY & SHERRY | [2004] FMCAfam 260 |
| FAMILY LAW – Application to set aside consent orders – impracticability – exceptional circumstances relating to the care, welfare and development of a child of the marriage. |
Family Law Act 1975, ss.79, 79A(1)(b), 79A(1)(d)
In the marriage of Simpson and Hamlin (1984) 9 Fam LR 1040
In the marriage of Rohde (1984) 10 Fam LR 56
Public Trustee (as executor for the estate of Gilbert) v Gilbert (1991) FLC 92-211
La Rocca and La Rocca (1991) FLC 92-222
In the marriage of Cawthorn (1998) 23 Fam LR 86
Hickey & Hickey (2003) 30 Fam LR 355
| Applicant: | NOEL STEVEN RUSHBY |
| Respondent: | SUSAN MAREE SHERRY |
| File No: | TVM2626 of 2003 |
| Delivered on: | 2 June 2004 |
| Delivered at: | Mackay |
| Hearing date: | 1 June 2004 |
| Judgment of: | Jarrett FM |
REPRESENTATION
| Counsel for the Applicant: | Mr Quirk |
| Solicitors for the Applicant: | Bill Cooper & Associates |
| Counsel for the Respondent: | Mr Fellows |
| Solicitors for the Respondent: | S.B. Wright & Wright and Condie |
ORDERS
The separate question be answered in the negative;
The amended application filed 18 February, 2004 is dismissed;
Orders 1, 2 and 3 of the orders made by Federal Magistrate Coker on 21 October, 2003 are discharged.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT MACKAY |
TVM2626 of 2003
| NOEL STEVEN RUSHBY |
Applicant
And
| SUSAN MAREE SHERRY |
Respondent
REASONS FOR JUDGMENT
The proceedings
By his amended application filed on 18 February, 2004 the applicant Noel Steven Rushby (for convenience referred to herein as “the husband”) seeks the following orders:
1. That Order 2B of the Orders made in the Family Court of Australia on the 9th of August, 2001 be discharged and in substitution the following Order be placed therein, namely:-
"2 - Upon completion of the sale of property situated at Lot 1 Gorge Rd., Finch Hatton the proceeds of same shall be applied as follows:-
(B) In payment to the wife of the sum equivalent to 35% of the balance thereof”
2. That the Respondent wife pay the Applicant husband's costs of and incidental to this application to be taxed.
3. Any further or other orders this Honourable Court deemed appropriate.
The respondent Susan Maree Sherry (for convenience referred to herein as “the wife”) opposes the husband’s application.
Background
The husband was born on 2 March, 1964 and is presently 40 years of age. The wife was born on the 3 August, 1966 and is presently 37 years of age.
The parties commenced living together on 6 January 1990 when they married. They finally separated on 25 April 2000. They are divorced. Each has repartnered: the wife married her new partner in November 2003; the husband is engaged to marry his new partner.
The parties have three children of their relationship, Justin Mark born 18 June, 1990 (almost 14 years of age), Brittany Maree born 31 July, 1992 (almost 12 years of age) and Dylan Benjamin born 3 May, 1995 (presently 9 years of age). The children live with the wife and her new husband, although Justin has attended boarding school since the commencement of the 2004 school year. The children have contact with the husband.
On 13 June, 2001 the parties entered into a document described as a “Child Support Agreement” (“the agreement”). Relevantly the agreement records:
Whereas:
…
E. The wife has made an application for the administrative assessment of child support by the Child Support Agency under the Child Support (Assessment) Act 1989, (hereinafter referred to as “the Application”).
F. The parties have reached agreement with respect to the division of their matrimonial property in accordance with the Terms of Settlement which are annexed hereto and marked with the letter “A”.
G. The wife hereby acknowledges that pursuant to the said Terms of Settlement the husband has agreed to pay her an additional fifteen percent (15%) of the proceeds of the sale of the property situated at Lot 1 Gorge Rd, Finch Hatton for the benefit of the children.
H. The husband has further agreed to pay the wife the sum of one thousand five hundred dollars ($1,500.00) per annum to assist with the payment of school fees and any other educational expenses.
I. The husband has agreed also to provide the highest medical cover available for all three (3) children.
J. The wife has agreed that she will make no further claim for child support from the husband for the said children.
K. In consideration of the above recited facts the parties desire to make provision for the support of the children independently of the provisions of Part 5 of the Child Support (Assessment) Act 1989 and to that end have reached agreement between themselves as to the payment of child support in the manner and on the terms hereinafter appearing.
…
N. It is noted by the parties that it is intended that this agreement together with these notations is also to be an agreement of the parties for the purposes of Part 6 of the Child Support (Assessment) Act 1989.
O. The parties intend that this agreement be registered with the Child Support Agency pursuant to provisions of Part 6 of the Child Support (Assessment) Act 1989.
The agreement provides for the husband to pay periodic child support to the wife in the sum of $500 per child per annum on 1 December each year. The husband also agreed to arrange and pay for the highest medical cover for the children and provide to the wife a copy of the policies together with any other documentary evidence of the insurance.
The agreement further provides (in clause 5) that in the event that the husband is in default of any of the provisions of the agreement he should pay child support assessed in accordance with an administrative assessment of child support.
On 9 August, 2001 consent orders were made in the Family Court of Australia (“the consent orders”) in, inter alia, the following terms:
NOTATIONS:
…
(f) The husband is currently not in employment and is precluded from receiving benefits from Centrelink until the year 2003. Consequently he is currently not liable to pay child support.
…
(h) The wife has entered into a Child Support Agreement, a copy of which is annexed hereto, in consideration of the husband providing to the wife an additional sum equivalent to fifteen percent (15%) of the proceeds of the sale of the [former matrimonial home].
(i) The wife hereby acknowledges that she will not make any further claim for child support against the husband in consideration of the husband providing to the wife the additional sum referred to in notations (g) and (h) hereof.
IT IS ORDERED BY CONSENT:
…
2.Upon completion of the sale of the property situated at Lot 1 Gorge Road, Finch Hatton the proceeds of same shall be applied as follows:
(a)To pay all costs, commissions and expenses of the sale and pay any council and water rates outstanding in respect of the real property.
(b)In payment to the wife the sum equivalent to 50% of the balance thereof.
(c)In payment to the wife of a further sum of ten thousand dollars ($10,000.00).
(d)The balance to the husband.
The evidence
In support of his application the husband relied upon:
a)his amended application filed on 18 February, 2004;
b)an affidavit sworn by him and filed on 12 May, 2004; and
c)a financial statement filed 28 May, 2004.
The wife relied upon:
a)her amended response filed 8 April, 2004;
b)an affidavit sworn by her and filed on 8 April, 2004;
c)a further affidavit sworn by her and filed on 14 May, 2004; and
d)a financial statement filed on 25 September, 2003.
The wife updated her financial circumstances by tendering, without objection, a letter from her solicitors to his, setting out the updated details (see exhibit 1).
Neither party was cross-examined. At the outset of the hearing each party urged me to hear argument upon and determine the husband's application to set aside the consent orders as a preliminary issue. Upon expressing my concern that the husband’s application should be dealt with as a whole (that is to say I should deal with both the application to set aside the consent orders and the husband’s claim for alternative orders together) each party persisted with their request.
I therefore made a direction that the question of whether the consent orders should be set aside be decided separately from the question of what orders should be made in the event that I was satisfied that the consent orders should be varied or set aside. I made that direction pursuant to rule 17.02 of the Federal Magistrates Court Rules 2001.
The following facts appear from the material relied upon each of the parties and the argument before me:
a)When the agreement was executed, there was in force a child support assessment issued by Child Support Agency (“the Agency”);
b)It was probably the wife’s obligation (or at least in her interest) to lodge the agreement with the Agency but she did not do so;
c)The husband has attempted to have the agreement registered with the Agency, but the Agency has refused to register it. The reasons for that refusal are not clearly articulated in the material;
d)Neither party has lodged an appeal against the Child Support Registrar’s refusal to register the agreement, as either would be entitled to do pursuant to s.96 of the Child Support (Assessment) Act 1989;
e)The husband’s current liability for child support is $21.00 per month and is payable pursuant to a current administrative assessment;
f)The husband’s liability under the agreement is $1,500.00 per annum (or about $29.00 per week);
g)The husband and his new partner are now the parents of twins. The twins were born 11 weeks prematurely on 16 April, 2004. They require extensive medical care and will continue to do so until they are at least 5 years old. Consequently, the demands upon the husband’s financial resources are now much greater than they were at the time the child support agreement was executed and the consent orders were made;
h)The husband is presently unemployed and his short to mid-term employment prospects are limited by reason of the twins’ medical condition and an injury he suffered some years ago. There is no dispute about the nature or extent of the husband’s injury;
i)The income of the husband and his new partner is presently confined to pension benefits and he has about $47,000.00 by way of nett assets represented by his interest in the home in which he lives with his new partner and a motor vehicle;
j)The wife’s husband is a grazier with a property about 2 hours drive south of Mackay. He is financially independent and is described by the husband as a “millionaire”. The wife does not dispute that description. He is paying the school fees (including boarding fees for the eldest child) of the parties’ children;
k)The wife has assets totalling about $65,000.00 and an income of about $300.00 per week from her employment as a teachers’ aide and some investment income;
l)The husband has not made any payments to the wife pursuant to the Agreement, nor has he organised the medical cover for the children provided for in the agreement.
m)The wife has no objection to the agreement being registered by the Agency.
n)The Finch Hatton property (the property referred to in the consent orders) has been sold and all but $24,300.00 has been distributed to the parties.
o)The balance $24,300.00 represents the difference between the wife’s 50% share as provided in the consent orders and the 35% that the husband now contends should be her entitlement. That sum is presently in the wife’s solicitor’s trust account pending further order.
Setting aside the orders
When called upon to specify those sections of the Family Law Act 1975 (“the Act”) upon which he was relying the husband, through his counsel, particularised s.79A(1)(b) and s.79A(1)(d) of the Act. Those sections are in the following terms:
79A Setting aside of orders altering property interests
(1) Where, 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, the court is satisfied that:
…
(b) in the circumstances that have arisen since the order was made it is impracticable for the order to be carried out or impracticable for a part of the order to be carried out; or
…
(d) in the circumstances that have arisen since the making of the order, being circumstances of an exceptional nature relating to the care, welfare and development of a child of the marriage, the child or, where the applicant has caring responsibility for the child (as defined in subsection (1AA)), the applicant, will suffer hardship if the court does not vary the order or set the order aside and make another order in substitution for the order; or
…
the court may, in its discretion, 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.
Section 79A(1)(b)
The husband contends that the consent orders should now be set aside because circumstances have arisen since the order was made such that it is impracticable for the order or part of the order to be carried out. The impracticability is said to arise because the agreement cannot be registered, or perhaps because the Child Support Registrar will not register it. It is not contended that the terms of the agreement cannot be carried out. It is the lack of registration of that agreement that lies at the heart of the husband’s case.
It is also suggested, but in a far less forceful way, that because of the worsening of the husband’s financial position since the consent orders were made, and the improvement in the financial position of the wife, the orders are also impracticable.
The consent orders do not require either party to effect registration of the agreement. The recitals in the agreement I have extracted above contemplate that the agreement will be registered, as perhaps do the notations in the consent order, but it is no part of the terms of the order that either party is obliged to effect its registration.
I accept the submission of the husband that I must view the consent orders in their entirety. That submission was based upon what fell from the Full Court of the Family Court of Australia in Hickey & Hickey (2003) 30 Fam LR 355 as follows:
[47]The principle demonstrates that but for the operation of s.79A, the Court has power to make only one order for property settlement pursuant to the provisions of s.79. Thus, any such order inherently has the effect of finally disposing of all issues relating to the disclosed property of the parties. This has two significant effects on property orders. Firstly, it means that ‘catch all’ orders are essentially ineffectual if they do not effect an alteration of interest. Nevertheless, it is said that their value lies in their form in order to appease concerned parties rather than their possible empty substance. Secondly, an order for property settlement made pursuant to the provisions of s.79 cannot legally constitute “orders” in the plural sense, but rather is a single order made up of various paragraphs or clauses.
[48]In our view, an order made pursuant to the provisions of s.79 was correctly described by Senior Counsel for the husband as a “once and for all” proposition. Although there may be partial or interim orders (s.79(6) of the Act) ultimately there is only one exercise of power under s.79 in respect of the property of the parties, even though that single exercise of power may be reflected in a complex order of many paragraphs or clauses, each dealing with a different item of property and some dealing with questions of implementation. It may be that some items of property are not dealt with in paragraphs or clauses of the order as it is not proposed that there be an alteration of interest in such property. However, the single exercise of power prevents a further application in relation to both specified and non specified items of property except pursuant to the provisions of s.79A.
Hickey makes it plain, if indeed it needed to be made plain, that the Court’s jurisdiction under s.79 is limited to making orders in respect of property – and then only orders which effect an alteration of the parties’ interests in that property.
The power conferred by s.79A(1)(b) of the Act allows the Court to vary or set aside a s.79 order if in the circumstances that have arisen since the order was made it is impracticable for the order (or part of it) to be carried out. The section does not extend, in my opinion, to an ancillary agreement such as the agreement in the present case. It applies only to a s 79 order as understood and explained in Hickey.
It follows that I do not accept the husband’s contention that the parties’ intention with respect to the registration of the agreement forms part of the obligations created by the consent orders.
The concept of impracticability was discussed by Gee J. in In the Marriage of Rohde (1984) 10 Fam LR 56. In that case, his Honour said at p 64:
In considering the terms of sec. 79A(1)(b), so far as it is necessary to consider them for the purposes of their application for the present case, I would make the following observations:
(a)It is not enough that circumstances have arisen since the order was made which make it unjust for the order or part of the order to be carried out; the onus is upon the applicant to establish to the reasonable satisfaction of the Court, that in the circumstances that have arisen since 12 March 1982 it is impracticable for the order or part of the order to be carried out.
(b)The word ''impracticable'' means, gleaning a definition from the Shorter Oxford Dictionary , ''not practicable'' ; ''that cannot be carried out or done'' ; ''practically impossible'' ; ''unmanageable'' ; ''intractable'' .
(c)''Impracticability' is a conception different from that of 'impossibility'; the latter is absolute, the former introduces at all events some degree of reason and involves some regard for practice'' (per Veale J. in Jayne v. National Coal Board (1963) 2 All E.R. 220 ).
(d)Provided that more than one circumstance exists, and that the circumstances have arisen since 12 March 1982, it does not matter what the circumstances are or by whom they are brought about.
It was also considered by Kay J. in La Rocca and La Rocca (1991) FLC 92-222. In that case his Honour said at p 78,538:
My own view is that s. 79A(1)(b) should be narrowly interpreted, not to the narrow extremes spoken of by Professors Hardingham and Neave for, indeed, the Family Law Rules themselves now enable the machinery provisions and the times involved in dealing with matters to be altered and in particular, I make reference to Order 3, Rule 3.
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. What the Parliament is concerned with and what ought to be concerning the Court is the happening of events which cannot be reasonably foreseen, which will have the effect of causing an injustice to one of the parties if the happening of such events is not given effect to.
In standard contractual doctrine, I think that is as comfortably as anywhere described by Russell J. in Re Badische Co. Ltd. (1921) 2 Ch. 331 at 379 , where his Honour said:
“The doctrine of dissolution of a contract by the frustration of its commercial object rests on an implication arising from the presumed common intention of the parties. If the supervening events or circumstances are such that it is impossible to hold that reasonable men could have contemplated that event or those circumstances and yet have entered into the bargain expressed in the document, a term should be implied dissolving the contract upon the happening of the event or circumstances.”
Now, in my view, what the appropriate application of s. 79A(1)(b) ought to be is that circumstances that have arisen in which it becomes impracticable to carry out the orders are circumstances that could not reasonably have been contemplated and that in such circumstances, whilst impossibility is not the test and impracticability is, it may then become just and equitable to change the orders.
The potential insolvency of one of the parties in the future is not such a matter, in my view. In every case before the Court property values may change, go up or down, business may flourish or not flourish, the vicissitudes of life may affect one of the parties.
Most recently, the Full Court of the Family Court of Australia (Ellis, Lindenmayer and Joske JJ.) considered the interpretation of s.79A(1)(b) in In the marriage of Cawthorn (1998) 23 Fam LR 86. In that case, the remarks of both Gee J. and Kay J. were endorsed. Their Honours said at p 95:
In our view, it is important to preserve the dichotomy between maintenance orders which are variable as provided for in the Act and orders for settlement of property which are basically permanent in their nature. This concept has underpinned the Family Law Act from its inception. For that reason, we agree with the approach adopted by Kay J. that the provisions of s.79A should be construed strictly.
On a case by case basis, reliance upon authority relating to the contractual doctrine of frustration in its various facets may at times prove to be of assistance. In so doing however, care must be taken and it must remain at all times in the forefront of the Court’s deliberations that the task before the Court is to interpret and administer a section of the Act.
We also agree with the views of both Kay and Moss JJ. that the concept of impracticability contained in s.79A(1)(b) is quite different from problems of enforcement that may arise due to a party’s insolvency. In such a case, the matter may well have to be dealt with pursuant to the provisions of the Bankruptcy Act 1966. This, however, merely reflects the vicissitudes of life and is in harmony with the clean break principle enshrined in the Act. An application for a further settlement of property is not available in circumstances where one party suddenly becomes immensely rich. It should also be noted that the words of Russell J. quoted earlier from Re Badiche Co. Ltd. (supra) should not be regarded as providing the appellant any solace in the circumstances of this case. Financial problems, such as have arisen in respect of the appellant, have never given rise to the successful invocation of the doctrine of frustration.
In my view, it is not impracticable for the consent orders to be carried out. I accept the submission of the wife that the orders in their present form can be carried out. All that remains to be done is for the balance proceeds of sale to be paid to the wife. Non-registration of the agreement does not make the consent orders, or any part of them, impracticable.
In the event that I am wrong and there is contained within the consent orders an obligation upon the parties to secure the registration of the agreement, it seems to me that notwithstanding the Registrar’s refusal to register the agreement, there is nonetheless no impracticability in the s 79A(1)(b) sense. No appeal against the Registrar’s decision has been pursued. Whilst impracticability does not mean impossibility, I am not satisfied that the Registrar’s first instance refusal to register the agreement amounts to “circumstances that could not have been reasonably contemplated” by the parties when the consent orders were made.
Section 79A(1)(d)
The husband points to the financial and other difficulties that he now faces by reason of the birth of the twins and their medical difficulties as establishing the matters set out in s.79A(1)(d) of the Act. He does not attempt to point to any circumstances that he says are “exceptional circumstances” in so far as the children of he and the wife are concerned.
I accept the submissions of the wife that s.79A(1)(d) is directed to exceptional circumstances that arise with respect to a child of the marriage; that is to say, a child of the marriage between the parties to the application. That seems to have been the view taken by the Full Court of the Family Court of Australia in Public Trustee (as executor for the estate of Gilbert) v Gilbert (1991) FLC 92-211 at 78,429.
The twins are not children of the marriage between the husband and the wife. For that reason, s.79A(1)(d) can have no relevance.
Discretion
Moreover, the authorities reveal that even if I am satisfied that the discretion conferred by s.79A(1) is enlivened, it does not automatically follow that I should exercise it in favour of the husband: Rohde at 66; In the marriage of Simpson and Hamlin (1984) 9 Fam LR 1040 at 1046; Gilbert at 78,429; Cawthorn at 97 – 98.
In exercising that discretion and without intending to be exhaustive, I consider that the following matters would have led me to exercise the discretion against the husband’s application:
a)The public interest in the finality of litigation and in particular orders for property settlement made under the Act. This is plainly a relevant consideration: Rohde at 66; Simpson and Hamlin at 1046-1047; La Rocca at 78,539.
b)The fact that he has not attempted to comply with the terms of the agreement;
c)The fact that no prejudice flows to the husband by the non-registration of the agreement. The wife can presently only enforce the husband’s liability under the current administrative assessment. That liability is less than his liability under the agreement.
d)The fact that the husband has not appealed the Registrar’s decision not to register the agreement.
e)The fact that, notwithstanding the consent orders, either the husband or wife could at any time apply to the Court to vary the terms of the agreement pursuant to the provisions of the Child Support (Assessment) Act1989.
Accordingly, I make orders in terms of those set out at the commencement of these reasons.
I certify that the preceding thirty-four (34) paragraphs are a true copy of the reasons for judgment of Jarrett FM
Deputy Associate: Emma Crutchfield
Date: 2 June 2004
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