SENIOR & ANDERSON
[2011] FamCA 802
•21 October 2011
FAMILY COURT OF AUSTRALIA
| SENIOR & ANDERSON | [2011] FamCA 802 |
| FAMILY LAW - FINANCIAL AGREEMENT - Where the Full Court on appeal remitted the question of whether the financial agreement is binding – Whether the financial agreement is binding under s 90G(1) or s 90G(1A) of the Family Law Act1975 (Cth) as applicable to the agreement made 27 July 2009 FAMILY LAW - STATUTORY INTERPRETATION - Where the majority of the Full Court on appeal agreed on the remittance but differed in relation to the application of the Federal Justice System Amendment (Efficiency Measures) Act (No. 1) 2009 (Cth) (“the Transitional Act”) and the form of s 90G(1) and s 90G(1A) applicable to the financial agreement made 27 July 2009 – Whether the provisions of the Transitional Act are relevant to the form of s 90G applicable to the financial agreement – Whether items 8(7) and 8A(2) and (3) of the Transitional Act and their effect on s 90G(1)(b) and (c) and s 90G(1A)(b) is consistent with the underlying purpose or object of the Transitional Act – Whether regard may be had to the extrinsic materials – Whether the provisions of the Transitional Act were intended to preclude the operation of s 90G(1A) to declare a financial agreement made on or after 14 January 2004 and before 4 January 2010 binding notwithstanding non-compliance with s 90G(1) in circumstances where s 90G(1)(b) is satisfied but s 90G(1)(c) is not satisfied FAMILY LAW - DECLARATION - Where the husband sought to further amend his amended response to seek an order that the financial agreement be declared binding – Whether the court has the power to declare a financial agreement binding – Whether the provisions of s 90G(1A) must be satisfied before the discretion in s 90G(1A)(c) may be exercised in order to declare the agreement binding pursuant to s 90G(1A)(d) and s 90G(1B) |
| Acts Interpretations Act 1901 (Cth), ss 15AA, 15AB Federal Proceedings (Costs) Act 1981 (Cth), s 8 |
| Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (2009) 239 CLR 27, applied Black v Black (2008) FLC 93-357, discussed CIC Insurance Ltd v Bankstown Football Club Ltd (1997) 187 CLR 384, cited Newcastle City Council v GIO General Ltd (1997) 191 CLR 85, applied Parker v Parker (2010) 43 Fam LR 548, cited Plaintiff M70/2011 v Minister for Immigration and Citizenship (2011) 85 ALJR 891, cited Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355, applied Saraswati v The Queen (1991) 172 CLR 1, cited Senior & Anderson (2011) FLC 93-470, applied Senior & Anderson [2010] FamCA 601, related |
| APPLICANT: | Ms Senior |
| RESPONDENT: | Mr Anderson |
| FILE NUMBER: | MLC | 9546 | of | 2008 |
| DATE DELIVERED: | 21 October 2011 |
| PLACE DELIVERED: | Melbourne |
| PLACE HEARD: | Melbourne |
| JUDGMENT OF: | Young J |
| HEARING DATE: | 12 August 2011 & 12 September 2011 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr Mawson SC and Mr Werner |
| SOLICITOR FOR THE APPLICANT: | Gillian Coote Family Law |
| COUNSEL FOR THE RESPONDENT: | Dr Ingleby |
| SOLICITOR FOR THE RESPONDENT: | Forte Family Lawyers |
ORDERS
IT IS ORDERED:
THAT the financial agreement entered into between the parties and dated 27 July 2009 is not a binding financial agreement pursuant to s 90G(1) or s 90G(1A) of the Family Law Act 1975 (Cth) as amended by the Federal Justice System Amendment (Efficiency Measures) Act (No.1) 2009 (Cth).
THAT the financial agreement entered into between the parties and dated 27 July 2009 does not, pursuant to s 71A, preclude the application of Part VIII of the Family Law Act1975 (Cth).
THAT the orders sought in paragraphs 5 to 12 of the wife’s Amended Initiating Application filed 17 March 2010 seeking final orders pursuant to s 79 of the Family Law Act1975 (Cth), be listed before Young J at 10.00 a.m. on 20 December 2011 for further case management and directions.
THAT the final orders sought by the wife in paragraphs 1 to 4 of her Amended Initiating Application filed 17 March 2010 be otherwise dismissed.
THAT the orders sought by the husband in his Amended Response to the Initiating Application filed 12 September 2011 be otherwise dismissed.
THAT the further application of the husband foreshadowed in his written submissions filed 30 September 2011 to further amend paragraph 2 of his Amended Response be dismissed.
THAT there be no order as to costs (save as discussed in paragraph 166 of the reasons for judgment).
IT IS CERTIFIED:
THAT pursuant to Rule 19.50 of the Family Law Rules 2004 (Cth) this matter reasonably required the attendance of senior counsel and counsel for the wife and counsel for the husband.
IT IS NOTED that publication of this judgment under the pseudonym Senior & Anderson is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
| FAMILY COURT OF AUSTRALIA AT MELBOURNE |
FILE NUMBER: MLC 9546 of 2008
| Ms Senior |
Applicant
And
| Mr Anderson |
Respondent
REASONS FOR JUDGMENT
On 10 May 2010 in Senior & Anderson [2010] FamCA 601 (the decision at first instance) I heard legal argument on whether the agreement between the husband and wife dated 27 July 2009 was a financial agreement within the meaning of s 4, s 71A and Part VIIIA of the Family Law Act1975 (Cth) (“the Act”) and whether that agreement was binding on the parties.
In those proceedings the wife was applicant and by way of amended application, filed 17 March 2010, sought a declaration that the agreement was not a financial agreement within the meaning of s 90D of the Act.
On 10 May 2010 I reserved the reasons for judgment and orders of the court. On 30 June 2010 I delivered the following orders:
“1.IT IS DECLARED that the agreement executed on or about 27 July 2009 by the husband and wife is a financial agreement pursuant to s 90D of the Family Law Act1975 (Cth).
2.THAT such financial agreement and the annexed Solicitor’s Certificates, in the current form as drafted, be rectified to accord with the provisions of s 90D of the Act.
3.THAT paragraph 1 of the wife’s amended application filed 17 March 2010 be otherwise dismissed…”
Subsequently on 13 July 2010 I delivered reasons for judgment.
The wife appealed against the decision and the appeal was heard on 3 March 2011 with the reasons and orders of the Full Court delivered on 14 June 2011.
The Full Court on appeal, constituted by May, Strickland and Murphy JJ, ordered that:
“(2) The Appeal be allowed.
(3) Order 2 made by Young J on 30 June 2010 be set aside.
(4) The matter be remitted to Young J for determination of whether the agreement should be declared binding pursuant to s 90G(1A) and (1B) of the Family Law Act1975 (Cth).”
May, Strickland and Murphy JJ each gave separate reasons for judgment on appeal (see Senior & Anderson (2011) FLC 93-470). In view of the submissions of the parties on remittance, the separate reasons for judgment require consideration.
THE DECISION OF THE FULL COURT ON APPEAL
In Senior & Anderson (supra) the Full Court, per Strickland and Murphy JJ, May J in dissent, held that I had erred in rectifying the certificates annexed to the agreement in order to satisfy the requirements in s 90G of the Act. Accordingly, the majority of the Full Court allowed the wife’s appeal and ordered that the matter be remitted to me for determination of the question whether, notwithstanding the lack of compliance with s 90G(1), the court should exercise its discretion under s 90G(1A) to declare that the financial agreement between the parties binding pursuant to s 90G(1B).
Reasons of May J
Her Honour agreed with much of the reasoning of Strickland and Murphy JJ but concluded that as the majority had allowed the appeal it was not necessary to refer to the separate reasons of Murphy J in relation to the provisions of the Federal Justice System Amendment (Efficiency Measures) Act (No. 1) 2009 (Cth) (“the Transitional Act”). May J disagreed with the majority and in particular with Strickland J at paragraph 142 where his Honour reasoned that the “certification must, on its face, comply with the terms of the section”. Her Honour stated at paragraph 2 that her Honour would not have allowed the appeal.
May J at paragraph 17 detailed the two certificates and observed at paragraph 18 that it was uncontroversial that “each party had received legal advice from his or her solicitor and… had signed the certificates”. Her Honour at paragraph 36 agreed that the erroneous references to s 90C rather than s 90D could be rectified to reflect the parties’ true position and then stated, at paragraphs 37 to 39, that:
“The erroneous names are in a different category – they were a failure to observe the requirements of section 90G and so cannot be rectified by use of section 90KA. But all the facts point to a careless error by the solicitors, having no impact on the parties. It is appropriate to correct the error by reading the certificates as if they referred to the parties correctly…
. . .
Should it be thought that is not the correct approach then the unjust and inequitable provision in section 90G(1A)(c) would apply. These remedial provisions in this case inevitably lead to a conclusion that it would be unjust and inequitable if the parties’ agreement is found not to be binding on them. It is not necessary in my view to remit the matter to the trial judge. There were submissions in relation to the “unjust and inequitable” provisions made to this court in both oral and written submissions, such that there was attention given to that provision…
This case is a good example of Parliament’s intentions, not to allow technical faults to be the basis for setting aside the parties express agreements.”
In accordance with the above reasoning her Honour concluded that the appeal should not be allowed and the matter should not be remitted.
Reasons of Strickland J
Strickland J, at paragraphs 61, 78 and 81 set out the particulars of the wife’s appeal against orders 1 to 3 made at first instance, the eleven grounds of appeal relied on by her, and the orders sought on appeal.
Grounds 1 and 7 were addressed by Strickland J at paragraphs 99 to 113. Those grounds contended I had erred in finding that the agreement was a financial agreement within the meaning of s 71A and in rectifying the agreement to be a financial agreement under s 90D. In relation to these grounds Strickland J concluded that the principles of law and equity were applicable to the “agreement and its formation” and that the doctrine of rectification could apply to the “agreement and to the requirements in s 90B, s 90C and s 90D” (see paragraphs 105 to 106). Accordingly, Strickland J at paragraph 113 found there was no merit in grounds 1 or 7 of the wife’s appeal, or in the related grounds 3 and 4.
Grounds 2, 5 and 6 were addressed by his Honour at paragraphs 114 to 134 and contended that I had erred in failing to apply the strict compliance test in Black v Black (2008) FLC 93-357, in finding that the Transitional Act limited the test in Black v Black (supra), and in placing weight on extrinsic materials to interpret the Transitional Act. Strickland J stated at paragraph 124 that he did not accept the wife’s submission that the Full Court’s decision in Black v Black applies to each and every pre-condition which s 71A specifies to oust the jurisdiction of the Court in s 79 proceedings and reasoned that there is a distinction in the Act between “the requirements of s 4 and ss 90B, 90C and s 90D and the requirements to make financial agreements binding as prescribed in s 90G”.
His Honour concluded at paragraph 130 that rectification was available to correct the erroneous references to s 90C in the agreement to read s 90D, and rejected grounds 2 and 5 as “[t]he agreement was clearly an agreement, and once the s 90C/s 90D error was rectified it was a financial agreement as defined”. However, at paragraph 132 Strickland J concluded that I had erred in applying the amendments to the Act to rectify the agreement as the “power to rectify derives from equity” but reasoned at paragraph 133 that this did not affect the decision to rectify “the s 90C/s 90D error” and that therefore there was no merit in ground 5. His Honour at paragraph 134 found merit in ground 6 and agreed that reliance should not have been placed upon the extrinsic material to the Transitional Act to determine the meaning of ss 4 and 90D as the amending legislation did not affect those provisions of the Act.
Grounds 8 and 9 discussed at paragraphs 135 to 144 contended that I had erred in rectifying the attached solicitor’s certificates and in finding that the errors in the certificates were not fatal to the binding nature of the agreement. Strickland J at paragraph 137 emphasised the clear distinction between agreements that are financial agreements pursuant to ss 4, 90B, 90C and 90D and those financial agreements that are binding pursuant to s 90G. His Honour found at paragraph 138 that rectification is not available “so as to “correct” non-compliance with any or all of the requirements of s 90G” and at paragraph 140 concluded that “the trial judge erred in purporting to rectify deficiencies in the requirements of s 90G”. His Honour agreed with the wife’s submission that I had erred in finding that the errors in the certificates “were not fatal to the binding nature of the agreement”.
Of particular relevance to the matter remitted is his Honour’s reasoning at paragraphs 141 to 143, which states:
“The relevant requirement of s 90G here is the provision of advice to a “spouse party” and certification to that effect. Compliance with that provision, and all other provisions of s 90G is mandatory. That compliance is the foundation for the ouster of the powers of the court to make Part VIII orders. I agree with what was said in Black and Black that the use of the words “if and only if” in s 90G and the fact that the powers of the court are being removed, requires the court to scrutinise carefully whether s 90G has been complied with.
It is clear to me that the certification must, on its face, comply with the terms of the section. A court could not be satisfied of that requirement in circumstances where, as here, the certificate refers to the provision of advice to a person named as “A” but, thereafter, refers to advice being provided to a person named “B”
Underpinning his Honour’s application of the Act appears to be the assumption that it serves to “cure” relevant errors so as to make the agreement binding when otherwise those errors would have been fatal to that. I disagree. The amendments to the Act do not permit rectification of error in the requirements of s 90G(1) in the way that there can be rectification of error in an agreement according to the principles of law and equity. Rather, the amendments permit the application of s 90G(1A) where certain conditions are satisfied…” (my emphasis)
Strickland J found merit in grounds 8 and 9 and allowed the appeal on that basis.
Ground 10 discussed at paragraphs 145 to 148 contended that I had erred in finding that the wife received legal advice as required by s 90G. Strickland J observed that s 90G(1)(b) requires advice be provided by the practitioner to the party on the advantages and disadvantages of the agreement and “is not directed to whether any such advice… was correct or not”. His Honour specifically commented that, in circumstances where the solicitor advising the wife could not find any advantages for her in entering the agreement and therefore did not advise of “advantages” it would be illogical to read s 90G(1)(b) as requiring advice on the advantages of entering the agreement. His Honour found no merit in ground 10.
Ground 11 addressed by Strickland J at paragraphs 149 to 151 contended that I had erred in finding that the references to s 90C in the agreement and the certificates annexed to the agreement were “unintended and unknown” on the basis that there was no evidence to support that finding. His Honour concluded that no specific evidence was required if the plain wording of the document was “redolent of an error or if there was evidence that the common intention of the parties is clear but is not reflected in the terms of the agreement”. Strickland J concluded that I was correct in finding that there was a clear common intention to enter into a financial agreement from the terms of the agreement and found no merit in ground 11.
Strickland J concluded at paragraph 152 that the appeal should be allowed on the basis that I had erred in rectifying the errors in the certificates and stated that:
“…these errors are not capable of rectification and subject to s 90G(1A) and (1B) of the Act the financial agreement is not binding under s 90G(1), and cannot oust the jurisdiction of the court pursuant to s 79 of the Act…”
His Honour went on to state the issue to be remitted for determination at paragraphs 153 to 154:
“The question then becomes can we exercise the discretion reposed in the court by s 90G(1A) and (1B) to declare the financial agreement binding notwithstanding non-compliance with s 90G(1) of the Act, or must we remit the matter to the trial judge.
Although we heard limited argument from the wife’s counsel as to whether we could be “satisfied that it would be unjust and inequitable if the agreement were not binding”, I consider it necessary to remit the matter to Young J for determination of that issue. In my view, as I said in Parker & Parker [2010] FamCA 664, is it unclear precisely what this means and what evidence may be required for the Court to be satisfied…”
The question for determination posed by Strickland J is whether the financial agreement between the parties, notwithstanding non-compliance with s 90G(1), and specifically s 90G(1)(c) as currently in force as found by his Honour at paragraphs 142 to 143, can be declared binding pursuant to s 90G(1B) by exercising the discretion in s 90G(1A).
Reasons of Murphy J
Murphy J at paragraph 159 stated that he agreed with Strickland J insofar that the appeal ought be allowed for the reasons stated by his Honour, and in relation to the distinction between financial agreements as agreements and the requirements of s 90G, and the “strict compliance test” (see paragraphs 137 to 142).
However, Murphy J differed in one significant respect relating to ground 9 and the application of the Transitional Act to the form of s 90G as applicable to the agreement between the parties dated 27 July 2009. Murphy J disagreed with the reasoning of Strickland J at paragraph 91 where his Honour stated:
“Schedule 5, Part 1 items 8 and 8A of the Federal Justice System Amendment (Efficiency Measures) Act (No 1) 2009 contains the relevant transitional provisions with respect to the amendments to s 90G. Those transitional provisions in effect provide for the amending legislation to have retrospective effect. However, save and except to say that the Act, and particularly s 90G applies to the agreement in this case, I do not propose to detail the transitional provisions. In my view they are not relevant to the determination of this appeal. There is no ground of appeal directed to this issue, and there was no submission by the wife that his Honour erred in his treatment of this aspect of the legislation.”
Significantly, Murphy J at paragraph 161 stated that ground 9 contended that I had erred in finding that errors in the certificates were not fatal to the binding nature of the agreement and that I should have found that the agreement was not binding within the meaning of s 71A and s 90G of the Act. His Honour stated that s 90G determines “the binding nature of the agreement” and considered that “[t]he correct interpretation of, and application of, that section is, in my view, central to the determination of this ground”.
Murphy J set out my reasoning in relation to the Transitional Act and went on to comment at paragraphs 163 to 165 that:
“At paragraph 59 of the trial judge’s reasons his Honour quotes (correctly) s 90G in its then-enacted form. His Honour then applies the section in that form in his Honour’s analysis of the arguments with respect to rectification of the agreement. But, in my view, the submission made by the wife’s counsel (quoted by his Honour at [79], above) depends for its resolution upon the terms of s 90G as they apply to this agreement. It was, and is, not possible to correctly determine that question, without considering s 90G in its retrospectively-amended form.
The reference by the trial judge to Item 8 (at [84], quoted above) is, with respect, correct as far as it goes. However, it is, with respect, incorrect in so far as it refers solely to Item 8 in giving retrospective operation to Schedule 5. While, Item 8 of Schedule 5 to the Amending Act applies to “all agreements made on or after 27 December 2000”, the true picture is complicated by the fact that Schedule 5 to the Amending Act also includes Item 8A which gives additional retrospective effect to s 90G.
As will be seen, I respectfully agree with Strickland J that, consequent upon the orders on which his Honour and I agree, the matter should be remitted, and remitted to Young J. I consider that this factor also renders important the exposition of what I respectfully consider to be the correct effect of the retrospective operation of the Amending Act on the instant agreement.”
At paragraphs 167 to 172 his Honour detailed the effect of the Family Law Amendment Act 2000 (Cth) (“the 2000 Amending Act”) and the Family Law Amendment Act 2003 (Cth) (“the 2003 Amending Act”) and noted at paragraphs 169 to 170 (as identified by the husband’s counsel) that:
“Initially the section [90G(1)(b)] required the legal practitioner to provide advice as to, and to certify, “whether or not, at the time when the advice was provided, it was to the advantage, financially or otherwise, of that party to make the agreement”. The amendment changed that sub-paragraph to read “the advantages and disadvantages, at the time that the advice was provided, to the party of making the agreement”.
Notably, the 2003 amending Act retained s 90G’s requirements for a statement about the advice to be contained within the agreement and the requirement that a certificate signed by the provider of the advice be annexed to the agreement.”
His Honour then highlighted at paragraphs 171 to 172 that the agreement in this matter was made at a time when the requirements of s 90G were those as amended by the 2003 Amending Act, however, at the time of the initial hearing on 10 May 2010 the Transitional Act had come into effect and applied retrospectively to all agreements made on or after 27 December 2000 and prior to its commencement on 4 January 2010. Therefore Murphy J concluded that the Transitional Act impacted on the form of s 90G applicable to the agreement.
Murphy J detailed the Transitional Act and the effect of its retrospective provisions at paragraphs 173 to 190 and at paragraph 173 agreed with Strickland J at paragraph 94 (which I take to be a typographical error intended to refer to paragraph 134) in respect of the use of extrinsic materials (ground 6) but stated that:
“…I do not consider the wording of the [Transitional Act] is plain and unambiguous – at least to the extent that retrospective effect is given to it. Indeed, I consider that the inter-relationship between Item 8 and Item 8A of Schedule 5 gives rise to ambiguity and considerable difficulties in interpretation – both in respect of those Items and, as a result, s 90G. The plain meaning of those legislative expressions is not clear from the wording of the Act.”
As a result his Honour at paragraph 174 considered it necessary to have regard to extrinsic materials to “examine the underlying object or purpose of the [Transitional Act] so as to assist in ascertaining its meaning”.
Of particular significance is his Honour’s discussion of the application of Item 8 of the Transitional Act (at paragraph 177) and its effect (at paragraphs 178 to 179), and the application of Item 8A (at paragraphs 180 to 187). In particular Murphy J at paragraphs 184 to 187 stated that:
“In addition to the use of the word “also” in Item 8A(2), the use of the word “additional” in the extract from the Supplementary Explanatory Memorandum above, should also be noted.
A further interpretive difficulty is seen by comparing Item 8(6) with Item 8A(3) and recalling that the former applies to all agreements made after the introduction of Part VIIIA in 2000 and before 4 January 2010 and the latter to agreements made after 14 January 2004 and before 4 January 2010:
8(6) For a financial agreement made before the commencement of this item, paragraphs 90G(1)(c) and (ca) of the Family Law Act 1975, as inserted by item 2 of this Schedule, do not apply.
8A(3) Paragraph 90G(1)(c) of the Family Law Act 1975, as inserted by this Act, applies in relation to the agreement as if the reference in that paragraph to the advice referred to in paragraph (b) included a reference to the advice referred to in subitem (2) of this item.
It can be seen, then, that Item 8 renders inapplicable (1)(c) and (ca) of the 2010 s 90G. But, Item 8A(3) renders paragraph (1)(c) applicable in respect of agreements made post 14 January 2004 and before 4 January 2010. Thus, in respect of agreements made during that time, the effect of Item 8A(2) and (3) would appear to make s 90G(1A) applicable to agreements that comply with a form of s 90G that:
· Includes paragraph 1(b) as the section stood after 14 January 2004, but before the Amending Act; and
· Includes, as an addition, paragraph 1(b) in terms of the paragraph contained in Item 8A(2); and
· Includes paragraph 1(c) of the 2010 s 90G (but not (ca) of the 2010 s 90G).
Item 8A does not contain a provision similar to Item 8(6). Thus, s 90G(1A) (as inserted by the Amending Act) applies to agreements which satisfy paragraphs (1)(a), (b) or (c) of the 2010 s 90G and to agreements which satisfy Item 8(2).”
His Honour agreed that an aide memoire provided by counsel for the wife set out at paragraph 189 provided a consolidated version of s 90G(1) (but not s 90G(1A)) as applicable to the agreement between the parties and stated at paragraph 191 that:
“…I agree that that part of s 90G, as there expressed, provide the relevant mandatory requirements by which the trial judge was bound to decide if this particular financial agreement was binding. His Honour did not apply s 90G in that form and, in so doing, was, in my respectful view, in error.”
Murphy J concluded that as a consequence of the orders upon which he and Strickland J agreed that the matter should be remitted to me for determination.
SUBMISSIONS OF THE PARTIES ON REMITTANCE
On 12 August 2011 the parties appeared for an initial hearing on the remittance. The wife was represented by counsel and the husband appeared in person. The wife and husband made submissions in relation to how the matter should proceed and I ordered the each party file and serve written legal submissions dealing with the issues remitted by the Full Court for further hearing and determination on 12 September 2011.
Counsel for the wife noted that as a matter of law the application was the husband’s but was content for the wife’s submissions to be filed prior to the husband’s to allow him as a litigant in person the opportunity to seek advice and respond as he saw fit. The husband later sought advice and at the hearing on 12 September 2011 counsel appeared and made submissions on his behalf.
On 12 September 2011 counsel were asked what form of s 90G was applicable to the certificates and financial agreement, and particularly the form of s 90G(1A)(b) in view of item 8(7) of the Transitional Act.
The husband’s counsel relied on the underlying purpose of the Transitional Act and its remedial nature that he argued sought to prevent the avoidance of financial agreements on a mere technicality.
The wife’s counsel stated that on a preliminary reading his conclusion was that the amended s 90G(1A)(b) removed the discretionary power of the court to declare the financial agreement binding notwithstanding non-compliance with s 90G(1)(c).
The parties were granted leave to make further written submissions on the effect of the Transitional Act as applicable to s 90G in its entirety.
THE SUBMISSIONS OF THE HUSBAND
The submissions of the husband in person on 12 August 2011
The husband stated from the bar table that the parties’ interest in both properties detailed in the financial agreement was 15 per cent. He said that his family (his brother and sister) in Egypt held an 85 per cent interest in the properties and that there was an agreement in Arabic to this effect. He asserted that the wife had knowledge of the agreement between he and his siblings. Significantly, the agreement referred to by the husband was not annexed to any of the material filed by him in the course of these proceedings.
The husband disagreed with the wife’s contention that the financial agreement between the parties effectively resulted in a distribution of 4 per cent of the asset pool to the wife. He contended that this percentage ignored the mortgages on the properties and the interest held by the husband’s family in the properties.
He relied on the Full Court decision to argue that the financial agreement should be declared binding notwithstanding non-compliance with s 90G(1)(c) and the technical deficiencies in the certificates. He argued that the wife had already received $28,000 under the financial agreement as her proper entitlement and that as a consequence he should retain the properties the subject of the agreement, whether on trust for others or not.
The husband argued that the financial agreement was not unconscionable as the wife received the required legal advice which she understood before to signing the agreement. As to the errors in the certificates, the husband argued that those errors were not known to the parties or their solicitors until after the preliminary hearing of the matter and that those errors should not prevent the financial agreement from being binding.
After the hearing on 12 August 2011 the husband’s counsel filed written submissions and sought to file an amended response.
The submissions of the husband on 12 September 2011
The husband’s counsel at the hearing on 12 September 2011 highlighted that order 4 of the orders of the Full Court stated “[t]hat the matter be remitted to Young J for determination of whether the agreement should be declared binding pursuant to s 90G(1A) and (1B) of the Family Law Act 1975 (Cth)”. Counsel argued that the Full Court did not pay sufficient attention to the relationship between s 90G(1A)(d), s 90G(1B) and s 90G(1C) and that on a closer reading of s 90G(1A) and s 90G(1B), as currently in force (and as set out by Strickland J at paragraph 90 in Senior & Anderson), the discretion vested in s 90G(1A) is only available where a spouse party seeks to enforce the financial agreement and that as a matter of procedure leave was required to amend the husband’s response.
Leave was sought to file the husband’s amended response and the wife’s counsel did not oppose leave and agreed with the construction put by counsel for the husband. However, the wife’s counsel referred to the husband’s outline of case, dated 10 May 2010, in which the husband sought orders that the financial agreement between the parties dated 27 July 2009 be declared binding pursuant to s 90G of the Act and submitted that the matter had proceeded on that basis at all times.
Leave was granted to amend the husband’s response and the amended response sought:
“1. That the [wife’s] application be dismissed.
2.That pursuant to section 90G(1B), there be a declaration that the Financial Agreement made 27 July 2009 is binding.
3.That pursuant to section 71A, the Court declare that it has no jurisdiction in relation to the [wife’s] application insofar as it seeks orders for property adjustment.
4.That the [wife] pay the [husband’s] costs of and incidental to this matter…”
The husband’s counsel referred to paragraph 18 of his written submissions and argued that it would be, pursuant to s 90G(1A)(c), unjust and inequitable if the financial agreement between the parties were not binding in view of the findings at first instance at paragraphs 26, 49, 94 and 100. He submitted that a narrow approach to s 90G(1A)(c), as detailed in the decision of Parker v Parker (2010) 43 Fam LR 548 at paragraph 109, was to be preferred.
It was argued that in interpreting the Transitional Act the Court “should ascertain the intention of the legislature by looking at the purpose of the underlying legislation” and that it was apparent from the explanatory memorandum that the Transitional Act was enacted to “promote confidence in the Binding Financial Agreement as a contractual device”. Counsel relied on s 15AA of the Acts Interpretation Act 1901 (Cth) and Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 and submitted that the Transitional Act was intended to be remedial and highlighted my decision at first instance at paragraphs 81 and 83.
In relation to the Full Court’s decision counsel submitted that May J would have dismissed the appeal, Strickland J upheld the appeal and remitted a broad brush question for determination and Murphy J entered into a technical discussion of the Transitional provisions. The husband relied on the reasoning of Strickland J.
In discussing s 90G the counsel submitted that the current form of s 90G, as amended by the Transitional Act, does two different things at the same time and has what he referred to as a “2000 phase” and a “2004 phase”. He indicated that over the past decade solicitors were required to certify agreements under one of the two phases, and that the 2010 Act as amended by the Transitional Act intended to deal with mistakes made by solicitors in relation to certification over both phases.
It was highlighted that the 2000 Amending Act that inserted s 90G required a “statement” to be provided by the legal practitioner as to the advice given to the relevant party on the matters set out in s 90G(1)(b), and this was to be “certified in an annexure to the agreement”.
The husband’s counsel then highlighted the difference between the s 90G as in force on and after 27 December 2000 and before 14 January 2004, and s 90G as amended by the 2003 Amending Act, as in force on or after 14 January 2004 and before 4 January 2010. It was highlighted that the 2003 Amending Act repealed s 90G(1)(b)(ii), (iii) and (iv) and substituted s 90G(1)(b)(ii) that stated “the advantages and disadvantages, at the time that the advice was provided, to the party of making the agreement” and it was argued that the effect of this amendment was to reduce the previous four items of advice, that were to be stated in an annexed certificate, to two items, hence relaxing the requirements for compliance.
Counsel submitted that the Transitional Act attempted to deal with certification problems arising in the 2000 phase and the 2004 phase by changing the requirements on solicitors in relation to statements relating to the provision of advice on financial agreements in order for those agreements to be binding.
It was argued that the analysis of Murphy J in Senior & Anderson (supra) made too much of the tension between items 8 and 8A of the Transitional Act and that the remedial nature of the legislation and the provisions of s 90G(1)(b) in the 2000 Amending Act and 2003 Amending Act indicated that the errors in the certificates in the matter before the court could be seen not to be a barrier to declaring the agreement binding in view of s 90G(1A)(b). Counsel pointed to the 2000 and 2003 Amending Acts to illustrate the changes to s 90G and the defects in relation to certification that are sought to be addressed by the amended s 90G(1)(b) and s 90G(1A) currently in force.
It was argued that s 90G(1)(c) as currently in force provided that “either before or after signing the agreement, each spouse party was provided with a signed statement by the legal practitioner stating that the advice referred to in paragraph (b) was provided to that party (whether or not the statement is annexed to the agreement)” and that as a consequence of the amendments “certification” was no longer required and the “statement” given to each spouse party was not required to be annexed to the agreement.
Further, counsel for the husband relied on paragraph 11 of his written submission, in response to paragraph 20(c) of the written submission of the wife, regarding the narrow construction of s 90G(1A)(c). It was submitted that the relationship between the amendments and other remedies available to the wife, such as s 90K, pointed to a narrow construction of s 90G(1A)(c) as otherwise the provisions would effectively allow the wife to have “two bites of the cherry”.
The husband’s counsel suggested an approach to ascertain the meaning of s 90G(1A)(c) in the context of the requirements imposed by s 90G(1)(c) (as currently in force) by considering the underlying purpose of the Transitional Act and its remedial nature, in view of the 2000 and 2003 Amending Acts and the historical changes to the requirements in s 90G(1)(b). He argued for a construction that promoted the remedial nature of the Transitional Act and the relaxation of the requirements for financial agreements to be binding including those relating to the certification of independent legal advice. In making these submissions counsel argued Murphy J had placed too much weight on items 8 and 8A of the Transitional Act and he ultimately argued against an overly technical approach.
In response to the question of the application of item 8(7) of the Transitional Act on s 90G(1A)(b) counsel reiterated that he disagreed with a technical approach to the application of the Transitional Act and argued that the court should look at the relationship between the items in that Act but was otherwise content to make further written submissions on the effect of item 8(7) on s 90G(1A).
The husband’s further written submissions on this point are discussed later in these reasons.
SUBMISSIONS OF THE WIFE
The wife’s submissions on 12 August 2011
At the hearing on 12 August 2011 counsel for the wife argued that the valuation of two properties, included in the financial agreement, was required as it went to the “substantive fairness of the distribution of assets under the agreement” and sought that all issues on the remittance be dealt with once that valuation evidence was obtained pursuant to orders 4 to 6 of Cronin J made on 4 February 2010, prior to the hearing at first instance.
Orders 2, 4 to 6 of Cronin J stated that:
“2.That by 18 March 2010, the wife file and serve an amended application for final orders, financial statement and any affidavit material upon which she intends to rely in relation to:
(a) the application to declare that the agreement is not a financial agreement for the purposes of the Act or that it should be set aside pursuant to s 90K; and
(b)insofar as she is successful in [proving] the agreement is not a financial agreement or should be set aside, her application pursuant to Part VIII of the Act for a property settlement and spousal maintenance.
. . .
4.That the proposed application by the wife relating to the setting aside of the financial agreement in addition to her claim for property settlement are consolidated.
5.That Registrar Kaur be appointed as the docketed registrar responsible for the management of the file.
6.That the parties must appoint a single expert to provide sworn valuations in respect of the properties at [location A] and [location B]. If the parties cannot agree within 21 days as to the valuer, a valuer shall be appointed by the President of the Real Estate Institute of Victoria. The costs of the valuation must be shared equally between the parties.”
In response to my questioning in relation to the necessity of the valuations on the remittance question counsel responded that:
“If there were to be a concession from the husband to the effect that the substantive effect of the financial agreement was to distribute the assets in such a way as to be far beyond the range which might ordinarily be ordered on a section 79 proceeding, respectfully, sir, I could live with that.”
The wife’s counsel argued that the question of whether the Court should exercise its discretion under s 90G(1A), and the discretionary consideration in s 90G(1A)(c) as to whether it would be unjust and inequitable if the agreement were not binding on the parties, required consideration of whether the agreement if declared binding would be set aside “in any event on equitable grounds”. It was submitted that it would be futile for a court to declare an agreement binding only to set it aside on the basis of undue influence or misrepresentation if that was made out on the evidence. I comment that although I agree with this submission and am of the view that s 90G and s 90K issues can generally be dealt with together, that subsequent question was not remitted by the Full Court and given the complexity of the legal arguments surrounding the application of s 90G flowing from the reasons of the Full Court in Senior & Anderson it was not desirable to also hear the s 90K issue at this stage.
It was highlighted that the husband’s assertion that his family had an 85 per cent interest in the properties was inconsistent with the land titles for the two properties and it was argued that the husband had been given ample opportunity to put evidence of the agreement between himself and his siblings before the court to substantiate a third party interest in the assets the subject of the asset pool. It was submitted that even on the version most favourable to the husband, taking into account the asserted 15 per cent interest in the two properties held by the wife and husband, the wife’s entitlement under the agreement was roughly 15 per cent of the pool (as opposed to 4 per cent if the asserted interest of the husband’s family was disregarded).
The submissions of counsel for the wife on 12 September 2011
Counsel filed written submissions on which he relied at the subsequent hearing on 12 September 2011 in addition to his submissions at the earlier hearing. However, in reply to the submissions of counsel for the husband, the wife’s counsel strongly disagreed with the construction of s 90G posited and submitted that the reasoning of Murphy J was correct and to be preferred to that of Strickland J in relation to the provisions of the Transitional Act, including items 8 and 8A, and its retrospective effect
The wife’s counsel agreed with the submissions of counsel for the husband insofar that the provisions of Schedule 5 of the Transitional Act and items 8 and 8A were directed to saving agreements made in the last decade, specifically those made on or after 27 December 2000 and before 14 January 2004 and on or after 14 January 2004 and before 4 January 2010. However, in relation to the arguments advanced on behalf of the husband in relation to the change in the obligations imposed on solicitors with respect to advice and certification it was argued that there was no change to those obligations in any material sense.
He submitted that in the period from 27 December 2000 to 3 January 2010 there was a requirement under s 90G(1)(b), as then in force, for a certification to be annexed to the agreement indicating the advice in s 90G(1)(b) had been provided to a spouse party. Counsel stated that in the current Act, and in the Transitional Act according to items 8 and 8A, the requirement was now that a “statement” as opposed to a “certificate” be provided to a spouse party and that the statement was no longer required to be attached to the financial agreement. In response to my questioning in regard to the significance of the distinction between a “certificate” and a “statement”, the wife’s counsel contended that there was no practical difference between the two other than that the statements were no longer required to be attached to the agreement.
Significantly, counsel argued that the court was bound to apply s 90G in the form specified by the provisions of the Transitional Act as applicable to the agreement between the parties dated 27 July 2009. He submitted that this conclusion was consistent with the reasoning of Murphy J in Senior & Anderson and the consolidated version of s 90G(1) at paragraph 189. However, it was acknowledged that the reasoning of Murphy J was not binding and that Strickland J did not address the effect of the Transitional Act on s 90G as applicable to the agreement between the parties. Counsel argued that the decision in Parker v Parker should be treated with caution as it had been appealed to the Full Court and the reasons on appeal remained pending. It was submitted that the application of item 8 of the Transitional Act to s 90G was a question to be determined in that appeal.
The wife’s counsel agreed that s 90G(1A) and s 90K provided the wife with “two bites of the cherry” but contended that those sections are not mutually exclusive and that the discretion vested in the court to declare the financial agreement binding notwithstanding non-compliance with s 90G(1) is broad and unfettered except in regard to the requirement in s 90G(1A)(c) that the court disregard any change in the circumstances of the parties from the time the agreement was made.
Counsel disagreed with the husband’s narrow construction of s 90G(1A)(c) and the husband’s submissions in regard to the requirements imposed by s 90G(1)(b) and s 90G(1)(c). He acknowledged that the provisions of the Transitional Act and items 8 and 8A were directed towards saving agreements made on or after 27 December 2000 and before 4 January 2010 but argued that Murphy J correctly applied the provisions of the Transitional Act and items 8 and 8A to determine the form of s 90G(1) applicable to the financial agreement between the parties that the court should apply.
It was submitted by counsel for the wife that the majority of the Full Court had found that the certificate did not comply with s 90G(1) as s 90G(1)(c) was not satisfied and in response to my questioning on the relevance of item 8(7) of the Transitional Act to the form of s 90G(1A)(b) as applicable to the agreement made on 27 July 2009 he sought to put further written submissions before the court in relation to the effect of that item as it appeared at first blush that the outcome was “bizarre”.
The wife’s further written submissions and reply on this issue are discussed later in these reasons.
THE DETERMINATION REQUIRED ON REMITTANCE
The parties in their oral and written submissions did not specifically address the differences in the reasoning of Strickland and Murphy JJ in respect of the issue or issues to be determined on remittance. It was apparent that the husband sought to rely on the reasoning of Strickland J and the wife on the reasoning of Murphy J in respect of the form of s 90G to be applied. Given the issues that arise as to the correct form of s 90G(1) and s 90G(1A) to be applied on remittance I have approached my task by first determining what issues were specifically was remitted by the majority of the Full Court.
Strickland and Murphy JJ held that the errors in the solicitor’s certificates could not be rectified in order to satisfy the requirements of s 90G(1). Murphy J specifically agreed with the reasoning of Strickland J (at paragraphs 137 to 138) as to the clear distinction between agreements that are financial agreements (pursuant to ss 4 , 90B, 90C, 90D) and financial agreements that are binding (under s 90G). Additionally, Murphy J specifically agreed that compliance with the provisions of s 90G(1) as applicable to the agreement was mandatory in accordance with the decision in Black v Black (2008) FLC 93-357 and that the use of the words “if and only if” in s 90G “requires the court to scrutinise carefully whether s 90G has been complied with” (see paragraph 141).
However, Murphy J reasoned, at paragraph 161, and then at paragraphs 191 to 192, that:
“Ground 9 refers to asserted errors in the trial judge’s finding that errors in the certificates to the agreements were not “fatal to the binding nature of the agreement” and goes on to assert, in sub-paragraph (b) that his Honour should have found that “the Agreement was not binding within the meaning of s 71A and s 90G of the Act”. The “binding nature of the agreement” is determined by s 90G. The correct interpretation of, and application of, that section is, in my view, central to the determination of this ground.
. . .
…I agree that that part of s 90G [in paragraph 189], as there expressed, provided the relevant mandatory requirements by which the trial judge was bound to decide if this particular financial agreement was binding. His Honour did not apply s 90G in that form and, in so doing, was, in my respectful view, in error.
As I have earlier said, I respectfully agree with Strickland J that, as a consequence of the orders upon which we agree, the matter be remitted and that it be remitted to Young J…”
Murphy J at paragraph 191 concluded that I had erred in not applying s 90G(1) as set out in paragraph 189 to determine whether the agreement was binding under s 90G(1).
Strickland J at paragraph 152 concluded that subject to s 90G(1A) and (1B) the agreement was not binding under s 90G(1). This conclusion was based on his Honour’s determination at paragraph 91 that the provisions of the Transitional Act were not “relevant to the determination of this appeal”.
Strickland and Murphy JJ agreed that the matter be remitted for determination and it follows that each of their Honour’s conclusions differ as to what was to be determined on remittance. The reasoning of Murphy J requires a determination of whether the financial agreement and annexed certificates comply with the consolidated version of s 90G(1), and subject to the consolidated subsection 90G(1A), whether the financial agreement may be declared binding notwithstanding any non-compliance with the consolidated s 90G(1). The reasoning of Strickland J requires a determination of whether, notwithstanding the non-compliance with s 90G(1), and specifically s 90G(1)(c), the court should exercise its discretion under s 90G(1A) to declare the agreement binding pursuant to s 90G(1B).
Discussion and Conclusion on the issues remitted by the Full Court
In relation to the submission of the parties on the reasoning of Strickland and Murphy JJ, I do not agree with the submission of the husband that the reasoning of Murphy J in regard to the provisions of the Transitional Act was unduly technical and that the reasoning of Strickland J is to be preferred. I agree with counsel for the wife and respectfully have concluded that Murphy J is most likely correct in relation to the application of the provisions of the Transitional Act to s 90G as it applies to the financial agreement between the parties dated 27 July 2009.
In my opinion the provisions of the Transitional Act and items 8 and 8A make it apparent that the provisions in Schedule 5 were intended to operate retrospectively to determine the form of s 90G to be applied to financial agreements made on or after 27 December 2000 and before 4 January 2010. However, as is discussed subsequently in these reasons the application of item 8 and item 8A and the various provisions of Schedule 5 are dependent on the date that a given financial agreement was made, or more specifically whether it was made on or after 27 December 2000 and before 14 January 2004, or on or after 14 January 2004 and before 4 January 2010.
Consequently I find that the question to be determined on remittance is whether the certificates comply with the consolidated version of s 90G(1), as set out by Murphy J at paragraph 189, and whether, notwithstanding non-compliance with that s 90G(1), the court may under the consolidated version of s 90G(1A) declare the agreement binding under s 90G(1B).
THE TRANSITIONAL ACT AND SECTION 90G
Murphy J undertook the task of detailing the effect of the transitional provisions on s 90G(1) as applicable to the agreement between the parties and I respectfully agree and adopt the reasoning set out by his Honour in Senior & Anderson. Consistent with that reasoning, the effect of Items 8 and 8A on s 90G(1) and (1A) as applicable to the financial agreement between the parties dated 27 July 2009 is to amend s 90G as it is currently in force as follows:
oItem 8(1) – provides that items 1A to 7A apply in relation to financial agreements made on or after 27 December 2000; and
oItem 8(6) – provides that for financial agreements made before 4 January 2010 paragraphs 90G(1)(c) and (ca) as inserted by item 2 of Schedule 5 do not apply; and
oItem 8(7) – provides that for financial agreements made before 4 January 2010 paragraph 90G(1A)(b) as inserted by item 4A does not apply and paragraph 90G(1A)(b) set out in 8(7) applies instead; and
oItem 8A(1) – provides subitems (2) and (3) apply in relation to a financial agreement made on or after 14 January 2004 and before 4 January 2010; and
oItem 8A(2) – provides that paragraph s 90G(1)(b) as inserted by item 2 is also taken to be satisfied in relation to a spouse in relation to the agreement, if before signing the agreement, the spouse party was provided with independent legal advice from a legal practitioner about:
(a) the effect of the agreement on the rights of that party; and
(b) whether or not, at the time when the advice was provided, it was to the advantage, financially or otherwise, of that party to make the agreement; and
(c) whether or not, at that time, it was prudent for that party to make the agreement; and
(d) whether or not, at that time and in the light of such circumstances as were, at that time, reasonably foreseeable, the provisions of the agreement were fair and reasonable.
oItem 8A(3) – provides that paragraph 90G(1)(c) as inserted by item 2, and removed by item 8(6), is reinserted and applies in relation to the agreement as if the reference in that paragraph to the advice referred to in paragraph (b) inserted by item 2 included a reference to the advice referred to in item 8A(2).
Section 90G, inclusive of s 90G(1A), as amended by the provisions of the Transitional Act and as applicable to the financial agreement between the parties dated 27 July 2009 is as follows:
“(1) Subject to subsection (1A), a financial agreement is binding on the parties to the agreement if, and only if:
(a) the agreement is signed by all parties; and
(b)before signing the agreement, each spouse party was provided with independent legal advice from a legal practitioner about the effect of the agreement on the rights of that party and about the advantages and disadvantages, at the time that the advice was provided, to that party of making the agreement;
Or (s 90G(1)(b) is also satisfied per item 8A(2)) if before signing the agreement, the spouse party was provided with independent legal advice from a legal practitioner about:
(a) the effect of the agreement on the rights of that party; and
(b) whether or not, at the time when the advice was provided, it was to the advantage, financially or otherwise, of that party to make the agreement; and
(c) whether or not, at that time, it was prudent for that party to make the agreement; and
(d) whether or not, at that time and in the light of such circumstances as were, at that time, reasonably foreseeable, the provisions of the agreement were fair and reasonable.
and
(c)either before or after signing the agreement, each spouse party was provided with a signed statement by the legal practitioner stating that the advice referred to in paragraph (b) or as italicised above (per item 8A(3)) was provided to that party (whether or not the statement is annexed to the agreement); and
(d) the agreement has not been terminated and has not been set aside by a court.
(1A) A financial agreement is binding on the parties to the agreement if:
(a) the agreement is signed by all parties; and
(b) paragraph (1)(b) is not satisfied in relation to the agreement; and
(c) a court is satisfied that it would be unjust and inequitable if the agreement were not binding on the spouse parties to the agreement (disregarding any changes in circumstances from the time the agreement was made); and
(d) the court makes an order under subsection (1B) declaring that the agreement is binding on the parties to the agreement; and
(e) the agreement has not been terminated and has not been set aside by a court.
(1B) For the purposes of paragraph (1A)(d), a court may make an order declaring that a financial agreement is binding on the parties to the agreement, upon application (the enforcement application) by a spouse party seeking to enforce the agreement.
(1C) To avoid doubt, section 90KA applies in relation to the enforcement application.”
The result is the consolidated version of s 90G(1) as set out in the reasons of Murphy J at paragraph 189, with the consolidated subsection (1A), including s 90G(1A)(b) as amended by item 8(7), and subsections (1B) and (1C) as inserted by item 4A.
I therefore find that the above consolidated version of s 90G in its entirety is to be applied to the financial agreement between the parties to determine whether it is binding and can be declared binding.
APPLICATION OF SECTION 90G TO THE CERTIFICATES
Consistent with the reasoning of majority in Senior & Anderson (Strickland J at paragraph 141, Murphy J concurring at paragraph 159) strict compliance with s 90G(1) as consolidated is required because of the use of the words “if, and only if” which were not removed by the provisions of the Transitional Act applicable to the financial agreement.
Accordingly, in applying the consolidated version of s 90G(1) to the financial agreement dated 27 July 2009 it follows that:
os 90G(1)(a) is satisfied as the agreement was signed by all parties (see Senior & Anderson [2010] FamCA 601 at paragraph 49) ;
os 90G(1)(b) is satisfied as before signing the agreement the parties received independent legal advice from a legal practitioner as required by that consolidated subsection inserted by item 2 (see Senior & Anderson [2010] FamCA 601 at paragraph 49);
othe alternative s 90G(1)(b) in the italicised text in the consolidated s 90G(1) is satisfied as the requirements of s 90G(1)(b) inserted by item 2 have been met and therefore it is not necessary to determine if the italicised text and (a) to (d) as inserted by item 8A(2) have been fulfilled;
os 90G(1)(c) is not met as, each party was not provided with a signed statement by their legal practitioner stating that the advice referred to in paragraph 90G(1)(b) inserted by item 2, or in paragraph 90G(1)(b) inserted by item 8A(2), was provided to that party as the certificates erroneously stated that husband and wife received advice on the effect of the agreement on either Chris/Patricia’s rights and the advantages and disadvantages, at the time that the advice was provided, to either Chris/Patricia of making the agreement (see Senior & Anderson at paragraph 142);
os 90G(1)(d) is satisfied as the agreement has not been terminated or set aside by a court.
I would briefly comment that I disagree with the submission of the wife that the majority of the Full Court in Senior & Anderson concluded that the financial agreement did not comply with s 90G(1)(c). Although Strickland J made that finding at paragraph 142 it was based on s 90G(1)(c) as currently in force. Conversely, Murphy J concluded that I had erred in not applying the consolidated version of s 90G(1) and therefore s 90G(1)(c) as set out in paragraph 189. However, notwithstanding this observation given the conclusions of the majority as identified in paragraphs 24 and 76 above, in my view the reasoning of Strickland J at paragraph 142 continues to apply in relation to the consolidated s 90G(1)(c).
It follows that the consolidated version of s 90G(1) as applicable to the financial agreement between the parties has not been complied with as s 90G(1)(c) is not satisfied and therefore regard may be had to s 90G(1A) as amended by the provisions of the Transitional Act to determine whether the agreement should be declared binding notwithstanding the lack of compliance with s 90G(1)(c).
Section 90G(1A) is applicable to determine whether the financial agreement is binding on the parties notwithstanding non-compliance with the consolidated s 90G(1) as provided by the words “[s]ubject to subsection 1A”.
Item 8(7) of the Transitional Act amends the form of s 90G(1A) applicable to the agreement and substitutes s 90G(1A)(b) as currently in force with the version set out in that subitem. Consequently subsection (1A) as amended by the provisions of the Transitional Act provides that:
“(1A) A financial agreement is binding on the parties to the agreement if:
(a) the agreement is signed by all parties; and
(b) paragraph (1)(b) is not satisfied in relation to the agreement; and
(c) a court is satisfied that it would be unjust and inequitable if the agreement were not binding on the spouse parties to the agreement (disregarding any changes in circumstances from the time the agreement was made); and
(d) the court makes an order under subsection (1B) declaring that the agreement is binding on the parties to the agreement; and
(e) the agreement has not been terminated and has not been set aside by a court.”
As the financial agreement between the parties satisfies s 90G(1)(b), but does not satisfy s 90G(1)(c), the consolidated subsection 90G(1A)(b) (above) is not satisfied.
As a result s 90G(1A) (as amended by the provisions of the Transitional Act) cannot apply to render the financial agreement between the parties binding notwithstanding the lack of compliance with s 90G(1)(c). The operation of the consolidated s 90G(1A)(b) precludes the exercise of the court’s discretion under s 90G(1A)(c) to declare the agreement binding notwithstanding non-compliance with s 90G(1) as s 90G(1)(b) is satisfied.
In my opinion given the ordinary meaning of s 90G(1A)(b) as amended by item 8(7) of the Transitional Act, in the context of s 90G as a whole, and in view of the purpose and objects of the Transitional Act and the mischief that Act sought to remedy, this raises a further question regarding the construction of s 90G(1A)(b), which I have considered hereafter.
THE FURTHER SUBMISSIONS OF THE PARTIES
The parties in their further submissions addressed the effect of items 8(7), 8A(2) and (3) of the Transitional Act and the operation of the s 90G(1) and (1A), and in particular s 90G(1)(b) and (c), and s 90G(1A)(b), as amended by the Transitional Act and applicable to the financial agreement between the parties dated 27 July 2009.
The further written submissions of the wife
The wife’s counsel in his further submissions contended that items 8 and 8A of the Transitional Act modify the application items 1A to 4A insofar as they apply to financial agreements made prior to 4 January 2010. It was submitted that item 8 applies to all agreements made on or after 27 December 2000 pursuant to item 8(1) but is qualified by the following provisions, and that item 8A applies only to financial agreements made on or after 14 January 2004 and before 4 January 2010 pursuant to item 8A(1).
It was contended that items 8 and 8A are not mutually exclusive and must be read together, and that items 1A to 4A must be read subject to item 8, which must then be read subject to item 8A. Counsel relied on the reasoning of Murphy J at paragraphs 178 to 179 in Senior & Anderson, in relation to the operation and effect of item 8, and the final bullet point in paragraph 179 was highlighted in relation to the effect of items 8(6) and 8(7). It was submitted that nothing in item 8A alters the effect of items 8(6) and 8(7) on financial agreements made after 14 January 2004. Consequently, it was contended that when the provisions of the Transitional Act were read together it was submitted that the form of s 90G(1A)(b) that applied to the financial agreement between the parties should state:
“(b) paragraph 1(b) is not satisfied in relation to the agreement; and”
Counsel for the wife explained that this form of s 90G(1) resulted because of the retrospective operation of the provisions of the Transitional Act as applicable to the form of s 90G(1A) that is to be applied to the financial agreement. It was submitted that as at 27 July 2009 section 90G(1A) did not exist as it was later inserted by item 4A of the Transitional Act and that by the operation of item 8(1), item 4A applied to all financial agreements made on or after 27 December 2000. Further, by the operation of item 8(7) that applies to all agreements made before 4 January 2010 paragraph (b) of 90G(1A) as introduced by item 4A does not apply, and the version in item 8(7) applies instead. It was contended that the retrospective operation of s 90G(1A) was not altered by the other provisions of the Transitional Act and that in particular item 8A had no relevance.
The husband’s further written submissions
The husband’s counsel in his written submissions argued that the relationship between item 8 and 8A of the Transitional Act did not necessarily have the effect contended by the wife. He pointed to the text of item 8A(2) that states:
“(2)Paragraph 90G(1)(b) of the Family Law Act 1975, as in force during that period, is taken to be satisfied in relation to a spouse in relation to the agreement if, before signing the agreement, the spouse party was provided with independent legal advice form a practitioner about…” (counsel’s emphasis)
It was submitted that if item 8A(2) preserves the terms of s 90G(1)(b) “as in force during that period” as a possible requirement for that subsection to be satisfied the fact that s 90G(1)(b) as in force on or after 14 January 2004 and before 4 January 2010, included the phrase “as certified in an annexure to the agreement” indicated that a breach of the certification requirements could be remedied. It was argued that this phrase should be interpreted “as properly certified in an annexure to the agreement”. The husband’s counsel submitted that the above interpretation was required to give effect to the aims of the legislation and was to be preferred to an interpretation that frustrated the underlying intention of the legislation, and that as a consequence the “remedial legislation is on its face available to cure the defect” in the certification.
In the alternative counsel contended that the effect of the Transitional Act was to remove the requirement for a certificate to be annexed to a financial agreement made before 4 January 2010 given the operation of item 2 that repealed the previous 90G(1)(c), and by item 8(6) render inapplicable paragraphs 90G(1)(c) and (ca) as inserted by item 2 to agreements made prior to 4 January 2010.
The wife’s further submissions in reply
In reply the wife’s counsel submitted that the husband’s contention that the financial agreement satisfied the statutory preconditions which confer upon the court the discretionary power to declare the financial agreement binding did not challenge the wife’s construction of s 90G(1A). It was argued that the form of paragraph 90G(1)(b) prior to the enactment of the Transitional Act and the phases contained within it were irrelevant as s 90G(1)(b) in force on 27 July 2009 “was expressly repealed by [item 2] of the Amending Legislation”. It was further submitted that even in its consolidated form:
“…paragraph 90G(1)(b) is no longer concerned with whether the body of the agreement – or the certificate – expressly states that legal advice was received. Since the introduction of the 2010 amendments, paragraph 90G(1)(b) is concerned only with whether legal advice was, in fact, received. This applies to all financial agreements, irrespective of whether they were entered into before or after the Amending Legislation.”
It was contended that item 8A(2) is not concerned with the manner in which the advice received by the spouse parties was documented as that is addressed by item 8A(3). It was argued that the purpose of item 8A(2) was to ensure that “if, between 14 January 2004 and 4 January 2010, a party received legal advice which satisfied the matters prescribed by subparagraph 90G(1)(b) in its form prior to 14 January 2004, then section 90G(1)(b) will be “taken to be satisfied”” and that it was a deeming provision.
It was argued that this purpose was stated in paragraph 22 of the Supplementary Explanatory Memorandum to the Federal Justice System Amendment (Efficiency Measures) Bill (No. 1) 2008 (Cth), as cited by Murphy J at paragraph 181, and that consequently item 8A(2) does not alter the “focus” of s 90G(1)(b) on the receipt of advice as opposed to the documentation of the receipt of that advice. It was argued that it followed that as the parties received legal advice prior to signing the agreement as required by the consolidated s 90G(1)(b) the agreement satisfied s 90G(1)(b).
In relation to the argument of the husband put in the alternative the wife argued that the Full Court found the agreement was not binding pursuant to s 90G(1) as s 90G(1)(c) was not satisfied.
The wife ultimately submitted that her construction of s 90G(1A) was consistent with the analysis of Murphy J at paragraphs 188 to 191 and it was argued that:
“Whether or not the outcome of the Husband’s application is bizarre it must fail; even if that failure results from an oversight in the drafting of the [Transitional Act].”
Discussion of the parties’ further submissions
In my view the further submissions on behalf of the husband in relation to s 90G(1)(b) and items 2, 8A(2) and 8(6) are misconceived for the reasons that follow.
First, the operation of Transitional Act and specifically item 8(1) renders item 2 applicable to the financial agreement between the parties, therefore s 90G(1)(b) as there set out applies retrospectively, without regard to the form of s 90G(1)(b) as in force at the time the financial agreement between the parties was made. Second, item 8A(2) applies retrospectively to the financial agreement between the parties, pursuant to the operation of item 8(1). Item 8A(2) states that paragraph 90G(1)(b) “as in force during that period”, meaning the period referred to in item 8(1): “on or after 14 January 2004 and before the commencement of item 8A” is “also taken to be satisfied if, before signing the agreement, the spouse party was provided with independent legal advice from a legal practitioner about” the matters set out in (a) to (d) in item 8A(2).
If Parliament had intended that the form of s 90G(1)(b), or phrases thereof, as in force at the time a financial agreement was made, was to apply to financial agreement made prior to 4 January 2010 then the Transitional Act would so provide, but in my view it does not. Whether or not regard may be had to historical forms of s 90G(1)(b) in the construction of that subsection in view of the consolidated s 90G(1A)(b) in relation to the financial agreement between the parties dated 27 July 2009 is a separate question hereafter addressed. The words of item 8A(2) indicate that for the purposes of determining whether a financial agreement, made on or after 14 January 2004 and before 4 January 2010, satisfies the s 90G(1)(b) inserted by item 2, that the subsection is also taken to be satisfied if, before signing the agreement the spouse party was provided with independent legal advice from a legal practitioner about the matters set out in (a) to (d) in item 8A(2).
In my opinion the reasoning of Murphy J in Senior & Anderson at paragraphs 181 to 184 set out the alternative paragraph 90G(1)(b) that, by virtue of item 8A(2), was to also apply to satisfy the requirements of s 90G(1)(b), in addition to the (1)(b) inserted by item 2. His Honour cited the relevant extract of the Supplementary Explanatory Memorandum and emphasised the use of the word “also” in item 8A(2) and “additional” in the Supplementary Explanatory Memorandum. I agree with that construction of s 90G(1)(b) discussed by his Honour and as set out in paragraph 189 of Senior & Anderson and in paragraph 85 above.
The alternative argument put by the husband’s counsel in paragraph 7 of the written response is similarly erroneous as it does not take into account the operation of item 8A(3) that reinserts an amended form of paragraph 90G(1)(c) for financial agreements made on or after 14 January 2004 and before 4 January 2010 (see Murphy J in Senior & Anderson at paragraph 185). It is clear that item 8A(3) operates to reinsert s 90G(1)(c) in item 2 but amends its form to refer to both s 90G(1)(b) inserted by item 2 and the additional form of s 90G(1)(b) set out in item 8A(2). Subsection 90G(1)(c) as set out above in paragraph 85 identifies that what is required is that:
“either before or after signing the agreement, each spouse party was provided with a signed statement by the legal practitioner stating that the advice referred to in paragraph (b) or as italicised above (per item 8A(3)) was provided to that party (whether or not the statement is annexed to the agreement); and”
Although s 90G(1)(c) above, as amended by item 8A(3) does not require a “certificate”, it does require that each spouse party to the agreement was provided with a “signed statement”, whether annexed to the agreement or not, by the legal practitioner stating that:
1.the advice in s 90G(1)(b) as inserted by item 2 was provided to that party; or
2.the advice in s 90G(1)(b) as inserted by item 8A(2) was provided to that party;
either before or after signing the agreement.
I do not consider that the applicable form of s 90G(1)(c) to the financial agreement between the parties dated 27 July 2009 dispenses altogether with the requirement that a “signed statement” be provided to each spouse party and that the “signed statement” state that the relevant advice was provided to that spouse party. In my view it is irrelevant whether the “signed statement” could also be regarded as a “certificate”. In my opinion it is clear that the “signed statement” need not be annexed to the agreement, but it must have been provided to each spouse party and must correctly identify that that spouse party was provided with the relevant advice. In my view that is consistent with the reasoning of Strickland J at paragraphs 141 and 142 in Senior & Anderson, and Murphy J at paragraph 159 in relation to s 90G and the “strict compliance test”.
It follows that I accept the submission of the wife in relation to the effect of items 2, 8A(2) and (3) in relation to the form of s 90G(1)(b) and (c) applicable to the financial agreement.
However, I agree with the husband’s further submission insofar as it contends that the outcome of the application of the Transitional Act to the financial agreement, and in particular the operation of items 8(7), 8A(2) and 8A(3) in relation to s 90G(1A)(b) and s 90G(1)(b) and (c), is curious. This is because item 8(7) amends s 90G(1A)(b) to allow the Court to declare a financial agreement binding in circumstances where s 90G(1)(b) is not satisfied, but precludes the court from exercise the discretion under s 90G(1A)(c) or from declaring a financial agreement binding in circumstances where s 90G(1)(c) is not satisfied but s 90G(1)(b) is satisfied. In other words in circumstances where the requisite advice in s 90G(1)(b) is provided to each spouse party but the certification or statement in s 90G(1)(c) does not comply with that subsection, s 90G(1A)(b) cannot be satisfied and the discretion in s 90G(1A)(c) cannot be exercised and the financial agreement cannot be declared binding pursuant to s 90G(1A)(d) and s 90G(1B).
THE CONSTRUCTION OF SECTION 90G
It is well established that the meaning of a statutory provision is to be determined in reference to the language of the instrument as a whole and must be construed in a manner consistent with the language and purpose of the statute. Accordingly, the process of construction must begin with an examination of the context of the provision that is to be construed (see Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at 381).
Section 15AA of the Acts Interpretations Act 1901 (Cth) provides that in interpreting a provision of an Act a construction that would promote the purpose or object of the Act is to be preferred. However, neither ss 15AA nor a purposive approach to statutory interpretation allows departure from the literal meaning of a provision in circumstances where that meaning is consistent with the underlying purpose or object of the Act (see CIC Insurance Ltd v Bankstown Football Club Ltd (1997) 187 CLR 384 at 408; Saraswati v The Queen (1991) 172 CLR 1 at 21 to 22).
It follows that the submission of the husband’s counsel that seeks a construction consistent with the underlying purpose of the Transitional Act and its remedial nature, in the context of the historical amendments, requires consideration. However, the construction of s 90G(1A)(c) and s 90G(1A)(b) and the other provisions of s 90G(1), including s 90G(1)(b) and (c), must start from a consideration of the text in those sections as amended by the provisions of the Transitional Act, prior to having regard to relevant extrinsic materials. As the plurality of the High Court in the decision of Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (2009) 239 CLR 27 at 46 to 47 stated:
“This Court has stated on many occasions that the task of statutory construction must begin with a consideration of the text itself.
Historical considerations and extrinsic materials cannot be relied on to displace the clear meaning of the text. The language which has actually been employed in the text of legislation is the surest guide to legislative intention. The meaning of the text may require consideration of the context, which includes the general purpose and policy of a provision, in particular the mischief it is seeking to remedy.” (footnotes omitted)
The Transitional Act sought to respond to the decision of the Full Court in Black v Black and the “strict compliance test” in relation to the technical requirements in s 90G(1) in order for financial agreements to be declared binding. This was reiterated in the reasons of Strickland J at paragraph 141, Murphy J concurring at paragraph 159, where his Honour stated that he agreed with what was said in Black v Black “that the use of the words “if, and only if” in s 90G and the fact that the powers of the court are being removed, requires the court to scrutinise carefully whether s 90G has been complied with”.
The Transitional Act as it applies to s 90G, as applicable to this financial agreement, and as currently in force, has not removed the words “if and only if” from s 90G(1) but by item 1A has added “[s]ubject to subsection 1A”. This suggests that the provisions of the Transitional Act in a broad sense have sought to allow s 90G(1A) to apply in order for a financial agreement to be declared binding where the provisions of s 90G(1) are not strictly complied with in the sense discussed in Black v Black.
It follows that in reading the provisions of the Transitional Act, as applicable to the form of s 90G in force on or after 14 January 2004 and before 4 January 2010 as a whole, the purpose or object of the Transitional Act is to enable the court to declare financial agreements binding notwithstanding a lack of compliance with the provisions of s 90G(1). It is apparent that the mischief that the Transitional Act seeks to remedy is the application of s 90G in a manner that allows parties to a financial agreements to avoid being bound due to a mere technicality under s 90G(1) in circumstances where it would otherwise be unjust and inequitable to allow the parties not to be bound, hence the addition of s 90G(1A) and its provisions.
In view of that object and purpose of the Transitional Act and the mischief that is sought to be remedied, it is curious that item 8(7) amends s 90G(1A)(b) with the result, in the matter before the court and in all financial agreements made on or after 14 January 2004 and before 4 January 2010 where s 90G(1)(b) is satisfied but s 90G(1)(c) is not, that the discretion in s 90G(1A)(c) to declare the agreement binding for non-compliance with s 90G(1)(c) is removed because s 90G(1)(b) is satisfied. That meaning attributed to s 90G(1)(b) in the context of s 90G as a whole, in my opinion, appears to be inconsistent with the underlying remedial object of the Transitional Act.
In this respect I agree with the submission of the husband’s counsel and regard may now be had to the extrinsic materials in view of s 15AB of the Acts Interpretations Act 1901 (Cth). That section states that extrinsic materials may be considered:
“(a) to confirm that the meaning of the provision is the ordinary meaning conveyed by the text of the provision taking into account its context in the Act and the purpose or object underlying the Act; or
(b) to determine the meaning of the provision when:
(i) the provision is ambiguous or obscure; or
(ii) the ordinary meaning conveyed by the text of the provision taking into account its context in the Act and the purpose or object underlying the Act leads to a result that is manifestly absurd or is unreasonable.”
In my opinion the meaning of the text of s 90G(1)(b) itself is not ambiguous or obscure. However, the provisions of the Transitional Act, and in particular the retrospective operation and interrelationship between item 2, items 8(6) and (7) and items 8A(2) and (3), could be said to lead to a result, in terms of the operation of the amended s 90G(1A)(b) due to the application of item 8(7), that is unreasonable. Therefore regard may be had to the extrinsic material to determine whether or not the meaning of s 90G(1A)(b) as amended by item s 8(7) of the Transitional Act is the ordinary meaning conveyed by the text.
Item 8(7) that amends s 90G(1A)(b) applicable to the agreement between the parties states that:
“(7) For a financial agreement made before the commencement of this item, paragraph 90G(1A)(b) of the Family Law Act 1975, as inserted by item 4A of this Schedule, does not apply and the following paragraph 90G(1A)(b) of that Act is taken to have been inserted by that item and to apply instead:
“(b) paragraph (1)(b) is not satisfied in relation to the agreement; and”
Murphy J at paragraph 175 noted that item 8A was inserted into the Transitional Act as a result of debate in the Senate. In addition to his Honour’s observation the amendments to the Bill arising in the Senate resulted in a number of other significant changes to Schedule 5 (see the Federal Justice System Amendment (Efficiency Measures) Bill (No. 1) 2008 (Cth), Schedule of the amendments made by the Senate, (distributed by the Clerk of the Senate on 26 October 2009).
The amendments to Schedule 5 made by the Senate that are relevant to the operation of s 90G(1A)(b) as amended by item 8(7), include the following:
oItem 1A – inserted to amend s 90G(1) in the initial Bill to substitute “A” with “Subject to subsection (1A), a”;
oItem 2 – amended to omit paragraph 90G(1)(b) in the initial Bill with s 90G(1)(b), (c) and (ca) as set out in the Transitional Act;
oItem 4A – inserted item 4A (subsection (1A), (1B) and (1C));
oItem 8 – amended item 8(1) to omit the reference to “2 to 7” with “1A to 7A” and inserted subitems 8(3) to 8(9);
oItem 8A – inserted item 8A (as noted by Murphy J).
The relevant effect of those provisions was to:
oBy Item 1A and Item 4A – subsections 90G(1A), (1B) and (1C) are inserted in the Transitional Act and s 90G(1) is amended to be subject to the operation of s 90G(1A);
oBy Item 2 and Items 8(1) – subsections 90G(1)(b), (c) and (ca) are applied to 90G(1), then by Item 8(6) subsection 90G(1)(c) and (ca) are rendered inapplicable;
oBy Item 4A and Item 8(7) – subsection 90G(1A)(b) in Item 4A does not apply and 90G(1A)(b) in Item 8(7) applies instead;
oBy Item 8A(1) – subitems 8A(2) and (3) apply;
oBy subitem 8A(2) – subsection 90G(1)(b) is inserted in addition to subsection 90G(1)(b) set out in item 2 that is already applicable due to the operation of item 2 and item 8(1);
oBy subitem 8A(3) – paragraph 90G(1)(c) that was removed by item 8(6) is reapplied and includes, in addition to the reference to s 90G(1)(b) as set out in item 2, a reference to the inserted subsection 90G(1)(b) as added by subitem 8A(2).
The Supplementary Explanatory Memorandum stated that the Bill, in relation to financial agreements made before the commencement of the amendments to Schedule 5 (before 4 January 2010), sought to “provide that a financial agreement… will bind parties who have signed the agreement if the spouse parties obtained independent legal advice prior to signing the agreement”.
In regard to the form of s 90G(1)(b) and s 90G(1)(c) as inserted by item 2, and the operation of items 8 and 8A, to financial agreements made on or after 14 January 2004 and before 4 January 2010 (and after 4 January 2010), the Supplementary Explanatory Memorandum stated that:
“5. New paragraph 90G(1)(b) will require each spouse party to a financial agreement to obtain independent legal advice from a legal practitioner about the effect of the agreement on their rights, and the advantages and disadvantages, at the time that the advice was provided, of making the agreement. This will ensure that spouse parties will receive independent legal advice before the agreement is signed so that they are able to make an informed decision.
6. New paragraph 90G(1)(c) will require each spouse party to obtain a signed statement from the legal practitioner giving the advice stating that the advice was given (regardless of whether the statement is annexed to the agreement). This will ensure that each spouse party obtains a statement evidencing that the advice has been received. The signed statement may be provided by the legal practitioner either prior to or after the execution of the agreement by the spouse parties. This amendment is necessary to ensure that agreements are not rendered defective simply on the basis of the order in which the spouse parties sign the agreement and are given a statement signed by their respective legal practitioners.”
Further, the Supplementary Explanatory Memorandum provided in relation to items 8(6) and (7) and items 8A(2) and (3) that:
“21.Subitems 8(6), 8(7)… will provide for the circumstances in which a financial agreement… made before the commencement of item 8 [before 4 January 2010] will bind the parties to the agreement. Such an agreement will bind the parties to it if:
· each party has signed the agreement, and
· each spouse party, before signing the agreement, obtained independent legal advice from a legal practitioner about the effect of the agreement on their rights, and the advantages and disadvantages, at the time the advice was provided, of making the agreement.
A court will be able to declare, in enforcement proceedings, that the agreement is binding on the parties where each spouse party did not obtain that prior independent legal advice if it is satisfied it would be unjust and inequitable if the agreement did not bind the spouse parties (disregarding any change in circumstance from the time the agreement was made)…
22. This amendment inserts new item 8A into Part 1 of Schedule 5 to the Bill which will provide for additional circumstances in which a financial… agreement made on or after 14 January 2004 and before commencement of item 8A [before 4 January 2010] will bind the parties to the agreement. Amendments to the Family Law Act 1975 which commenced on that date changed the matters about which spouses had to obtain prior independent legal advice for the agreement to bind them. Some legal practitioners continued to rely on old precedents relating to the provisions of the Act as they stood before 14 January 2004 for agreements made for some time after that date. Subitems 8A(2), 8A(3)… will provide that the agreement binds the spouses if the prior independent legal advice obtained by one or both spouses was about matters on which advice was required under the Act to be obtained before 14 January 2004…”
It appears that the underlying object or purpose of the Transitional Act in respect to agreements made before the commencement of Schedule 5 of the Transitional Act (that is on or after 27 December 2000 and before 4 January 2010) is to ensure that financial agreements will be binding on parties who have signed an agreement and have obtained independent legal advice prior to signing the agreement.
The rationale for the insertion of 90G(1)(b) in item 2 (as applicable to agreements made on or after 14 January 2004) is to ensure spouse parties received independent legal advice before the agreement is signed in order to make an informed decision. Whereas the rationale for the insertion of 90G(1)(c) in item 2 (as is also applicable to agreements made on or after 14 January 2004) is to enable the “signed statement” to be provided before or after the execution of the agreement to ensure agreements “are not rendered defective” on the basis of the order in which the agreements and statements are signed.
Subitems 8(6) and 8(7) reflect the underlying object but extend that object by vesting the court with the discretion to declare the agreement binding on the parties “where each spouse party did not obtain that prior independent legal advice if it is satisfied it would be unjust and inequitable if the agreement did not bind the spouse parties”. The purpose of these items are to enable a court to declare an agreement binding even if s 90G(1)(b) is not satisfied. This suggests that the form of s 90G(1A)(b) as amended by item 8(7) attempts to render s 90G(1A) applicable to a financial agreement in circumstances where the spouse parties have not received independent legal advice but the court determines that the financial agreement should be declared binding notwithstanding the lack of compliance with s 90G(1)(b).
Subitems 8A(2) and (3) reflect the underlying object of the Transitional Act as it relates to financial agreements made before the commencement of Schedule 5. The subitems seek to extend the operation of s 90G(1)(b) as inserted by item 2 (that reflects the form of advice required for financial agreements made on or after 14 January 2004 and before 4 January 2010) to include as an alternative, by the operation of item 8A(2), the form of advice required for financial agreements made on or after 27 December 2000 and before 14 January 2004. The additional pre-2004 form of s 90G(1)(b) (and hence s 90G(1)(c) in item 2, with the additional reference to the pre-2004 s 90G(1)(b) inserted by item 8A(3)) was included as an alternative to provide for circumstances in which a legal practitioner provided advice in relation to the pre-2004 requirements for a financial agreement executed on or after 14 January 2004.
As highlighted by the wife’s counsel Murphy J at paragraph 179 in Senior & Anderson confirmed that the effect of items 8(6) and 8(7) was:
“…to permit a financial agreement made prior to the [Transitional Act’s] commencement (ie 4 January 2010) to be binding by virtue of the (retrospective) operation of s 90G(1A), but only if paragraph (b) inserted by Item 8(4) (i.e., in effect, the pre-2004 s 90G) has not been complied with.”
His Honour at paragraph 186 stated that item 8(6) renders (1)(c) and (ca) of the 2010 s 90G inapplicable, but that item 8A(3) renders (1)(c) applicable to agreements made on or after 14 January 2004 and before 4 January 2010. Therefore 90G(1)(b) and (c) remain as inserted by item 2 and the effect of item 8A(2) is to insert an additional alternative 90G(1)(b) that may be satisfied if s 90G(1)(b) as set out in item 2 is not fulfilled, and that item 8A(3) then applies to allow the amended 90G(1)(c) in item 2 to refer to either form of s 90G(1)(b).
Accordingly, it should be noted that by item 8(1), items 1A to 7A apply in relation to all financial agreements made on or after 27 December 2000, but item 8A(1) provides that subitems 8A(2) and (3) only apply to financial agreements made on or after 14 January 2004 and before the commencement of Schedule 5 on 4 January 2010. Consequentially, it is useful to highlight the form of s 90G(1) and (1A) applicable to financial agreements made on or after 27 December 2000 and before 14 January 2004 is amended by item 8 only and how that form of s 90G differs to the form of s 90G applicable to financial agreements made on or after 14 January 2004 and before 4 January 2010. In particular, it is significant that s 90G(1)(c) in the form of s 90G applicable to financial agreements made on or after 27 December 2000 and before 14 January 2004 is removed but that the s 90G(1A)(b) as inserted by item 8(7) continues to apply, as follows:
“(1) Subject to subsection (1A), a financial agreement is binding on the parties to the agreement if, and only if:
(a) the agreement is signed by all parties; and
(b) before signing the agreement, each spouse party was provided with independent legal advice from a legal practitioner about:
(i) the effect of the agreement on the rights of that party; and
(ii) whether or not, at the time when the advice was provided, it was to the advantage, financially or otherwise, of that party to make the agreement; and
(iii) whether or not, at that time, it was prudent for that party to make the agreement; and
(iv) whether or not, at that time and in the light of such circumstances as were, at that time, reasonably foreseeable, the provisions of the agreement were fair and reasonable; and
(d) the agreement has not been terminated and has not been set aside by a court.
(1A) A financial agreement is binding on the parties to the agreement if:
(a) the agreement is signed by all parties; and
(b) paragraph (1)(b) is not satisfied in relation to the agreement; and
(c) a court is satisfied that it would be unjust and inequitable if the agreement were not binding on the spouse parties to the agreement (disregarding any changes in circumstances from the time the agreement was made); and
(d) the court makes an order under subsection (1B) declaring that the agreement is binding on the parties to the agreement; and
(e) the agreement has not been terminated and has not been set aside by a court.
It is clear that s 90G(1) as amended above applicable to financial agreements made on or after 27 December 2000 and before 14 January 2004 includes only subsections (a), (b) in the pre-2004 form, and (d). Subsection 90G(1A)(b) therefore operates to allow the court to exercise its discretion under s 90G(1A)(c) to declare the agreement binding in circumstances where the parties did not receive advice before signing the agreement as required by s 90G(1)(b) or in other words in circumstances where s 90G(1)(b) is not satisfied.
However, in the form of s 90G applicable to financial agreements made on or after 14 January 2004 and before 4 January 2010, as item 8(4) does not apply, the s 90G(1)(b) inserted by item 2 continues to apply instead of the pre-2004 form above at paragraph 140. Item 8A is then applied, and item 8(1) provides that items 8A(2) and (3) apply. Items 8A(2) and (3) change the form of s 90G(1) so that s 90G(1)(b) is amended to include the alternate version of s 90G(1)(b) (that replicates the pre-2004 version above in paragraph 140), and crucially s 90G(1)(c) that was removed by item 8(6) is reinserted (that refers to the item 2 version of s 90G(1)(b)) and by item 8A(3) also refers to the item 8A(2) version of s 90G(1)(b). However, as item 8(7) continues to apply, s 90G(1A)(b) still provides that the discretion in s 90G(1A)(c) to declare an agreement binding notwithstanding non-compliance with s 90G(1)(b) cannot be exercised unless s 90G(1A)(b) is not satisfied.
The reinsertion of s 90G(1)(c) in item 2 as removed by item 8(6) and then reinserted and amended by item 8A(3), without consideration of the operation of item 8(7) in regard to s 90G(1A), may or may not be inadvertent. However, in the matter before the court the spouse parties have obtained independent legal advice prior to signing the financial agreement and s 90G(1)(b) as inserted by item 2 is satisfied, but the parties were not provided with a compliant “signed statement” to that effect within the meaning of the s 90G(1)(c) as inserted by item 2, removed by item 8(6) and reinserted and amended by item 8A(3).
This scenario is different to that discussed in the Supplementary Explanatory Memorandum where the court is provided with the discretion to declare the financial agreement binding in circumstances where the parties have not obtained independent legal advice (pursuant to s 90G(1)(b) or its alternative form in item 8A(2)) prior to signing the financial agreement in circumstances where it would be unjust and inequitable if the financial agreement did not bind the spouse parties.
It is apparent that the form of s 90G(1)(c), as inserted by item 2, removed by item 8(6) and reinserted and amended by item 8A(3) of the Transitional Act as applicable to financial agreements made on or after 14 January 2004 and before 4 January 2010, attempts to ensure that financial agreements are binding in circumstances where the “statement” was not signed by the legal practitioner until after the agreement was executed in circumstances where the requisite advice set out in either form of s 90G(1)(b) was provided to the spouse parties prior to each spouse party signing the financial agreement.
Again this addresses a different scenario from that in the matter before the Court where the “signed statements” are not compliant with s 90G(1)(c) (as inserted by item 2, removed by item 8(6) and reinserted and amended by item 8A(3)) as the issue in the matter before the court is not when the “statements” were signed but who in each respective “signed statement” was said to be given the requisite advice in relation to the financial agreement between the parties dated 27 July 2009.
The subsections of 90G(1A) as inserted by the Transitional Act in items 1A and 4A were intended to be remedial and s 90G(1A)(b) as inserted by item 8(7) should be construed with s 90G(1)(b), the alternative form of s 90G(1)(b), and s 90G(1)(c) as inserted by item 2, and amended by item 8(6) and items 8A(2) and (3), to promote the underlying object or purpose of the Transitional Act that sought to allow subsection (1A) to apply to determine whether a financial agreement should be declared binding in circumstances where it does not comply with one or more of the technical requirements of s 90G(1), and where the parties have signed the agreement and obtained independent legal advice prior to signing the agreement.
However, in my opinion, it is evident from the Supplementary Explanatory Memorandum at 21 that the text of s 90G(1A)(b) as inserted by item 8(7), applicable to financial agreements made on or after 14 January 2004 and before 4 January 2010, has the ordinary meaning conveyed by the text of that provision as it was intended to operate in circumstances where the spouse parties had not received the advice set out in s 90G(1)(b) or in the alternative form of s 90G(1)(b) set out in item 8A(2). The provisions of the Transitional Act when read with the extrinsic materials indicates that s 90G(1A)(b) was inserted to allow the discretion in s 90G(1A)(c) to operate to enable the court to declare an financial agreement made before the commencement of Schedule 5 (prior to 4 January 2010) binding even if the spouse parties had not received the requisite advice before signing the financial agreement if it would be unjust and inequitable to allow the financial agreement not to be binding.
Section 90G(1)(c) is directed to a quite different and separate defect to the defect in s 90G(1)(b) inserted by item 2 and the alternative form of s 90G(1)(b) in item 8A(2). Subsection 90G(1)(c) (as reinserted by item 8A(3) that refers to the advice in s 90G(1)(b) inserted by item 2 or the alternative form of s 90G(1)(b) set out in item 8A(2)) is directed to allowing the “signed statement”, that evidences that the spouse party had received the requisite independent legal advice prior to signing the financial agreement, to be signed before or after the spouse party signed the agreement. The clear emphasis is on the “signed statement” itself evidencing the provision of that advice prior to the spouse party signing the financial agreement in order to be binding irrespective of whether the “statement” was signed by the legal practitioner prior to or after the spouse party signed the financial agreement.
It is likely that the draftsperson did not intend to preclude the operation of s 90G(1A)(c) in circumstances where s 90G(1)(c) had not been complied with and s 90G(1)(b) had been complied with by virtue of item 8(7) and the resulting s 90G(1A)(b) applicable to financial agreements made on or after 14 January 2004 and before 4 January 2010. However, that is the effect of the provisions of the Transitional Act as it is applicable to financial agreements made on or after 14 January 2004 and before 4 January 2010 in circumstances where s 90G(1)(b) is satisfied.
In Newcastle City Council v GIO General Ltd (1997) 191 CLR 85 at 109 and 113 McHugh J reasoned that:
“Moreover, as the extrinsic material reveals, s 40(3) was intended to be remedial. As far as practicable, s 40(1) and (3) should be construed to promote the objects of the Act. Nevertheless, as I pointed out in Kingston v Keprose Pty Ltd, in applying a purposive construction, “the function of the court remains one of construction and not legislation”.
. . .
Extrinsic material cannot be used to construe a legislative provision unless the construction of the provision suggested by that material is one that is “reasonably open”. Even if extrinsic material convincingly indicates the evil at which a section was aimed, it does not follow that the language of the section will always permit a construction that will remedy that evil. If the legislature uses language which covers only one state of affairs, a court cannot legitimately construe the words of the section in a tortured and unrealistic manner to cover another set of circumstances…” (footnotes omitted) (my emphasis)
Subsection 90G(1A)(b) as amended by item 8(7) applicable to the financial agreement in the matter before the court fits this description as it only allows s 90G(1A)(c) to operate in circumstances where a financial agreement does not satisfy s 90G(1)(b). It is not possible to construe the words of s 90G(1A)(b) in any other manner in view of the extrinsic materials.
Had the Parliament intended that the provisions of the Transitional Act in items 2, 8(6) and (7) and 8A(2) and (3) to have had a different effect on s 90G(1)(b) and s 90G(1)(c) and the provisions of s 90G(1A), particularly s 90G(1A)(b) and s 90G(1A)(c) as applicable to financial agreements on or after 14 January 2004 and before 4 January 2010, in circumstances where the financial agreement satisfied s 90G(1)(b), or the alternative form of s 90G(1)(b), but not s 90G(1)(c) as inserted and amended by item 8A(3), then the provisions of the Transitional Act would have provided otherwise.
Given the intention underlying the provisions of the Transitional Act, I prefer a construction that is not only consistent with the ordinary meaning of the s 90G(1A)(b) as inserted by item 8(7) but that supports the conclusion that Parliament intended what it said, even if that construction and the resulting application of s 90G(1A)(b) in the matter before the court precludes the operation of the court’s discretion under s 90G(1A)(c) and its power to declare the financial agreement between the parties binding under s 90G(1B).
THE HUSBAND’S APPLICATION SEEKING LEAVE TO AMEND
The husband’s counsel sought further leave to amend the husband’s response set out at paragraph 48, paragraph 2, above to seek an alternative order “[t]hat there be a declaration that the Financial Agreement made 27 July 2009 is binding”. This amendment seeks to remove the reference to s 90G(1B). It was submitted that the wife could not oppose the amendment as she had changed her position in the course of the proceedings. Counsel for the husband did not further detail the jurisdictional basis on which the court may make a declaration that the financial agreement between the parties be declared binding if not under the version of s 90G(1A) as amended by the provisions of the Transitional Act.
Counsel for the wife in his further submissions in reply did not specifically address the husband’s application for leave to amend. However, in the further submissions s 90G(1B) was addressed and it was argued that the jurisdictional basis for the exercise of the power to declare a financial agreement binding lies in s 90G(1A)(d) and that the condition precedent to the exercise of that power is the satisfaction of the “jurisdictional facts” in s 90G(1A)(a) to (e). It was submitted that if any of the subsections of s 90G(1A) were not satisfied then the court’s power to declare the financial agreement binding does not arise.
Counsel for the wife relied on the reasoning of Strickland J at paragraph 104, Murphy J agreeing at paragraph 159, in Senior & Anderson and on the reasoning of French CJ in Plaintiff M70/2011 v Minister for Immigration and Citizenship (2011) 85 ALJR 891 at paragraph 57 his Honour stated:
“The term “jurisdictional fact” applied to the exercise of a statutory power is often used to designate a factual criterion, satisfaction of which is necessary to enliven the power of a decision-maker to exercise a discretion. The criterion may be “a complex of elements”. When a criterion conditioning the exercise of statutory power involves assessment and value judgments on the part of the decision-maker, it is difficult to characterise the criterion as a jurisdictional fact, the existence or non-existence of which may be reviewed by a court. The decision-maker’s assessment or evaluation may be an element of the criterion or it may be the criterion itself. Where a power is expressly conditioned upon the formation of a state of mind by the decision-maker, be it an opinion, belief, state of satisfaction or suspicion, the existence of the state of mind itself will constitute a jurisdictional fact. If by necessary implication the power is conditioned upon the formation of an opinion or belief on the part of the decision-maker then the existence of that opinion or belief can also be viewed as a jurisdictional fact…”
It was contended that s 90G(1A) as it applies to the financial agreement between the parties dated 27 July 2009 does not empower the court to grant the relief sought by the husband as s 90G(1)(c) is not satisfied and the power to declare an agreement binding is “confined to a breach of paragraph 90G(1)(b)”.
Discussion and Conclusion on the Husband’s Application
As highlighted by the wife’s counsel Strickland J at paragraphs 104 and 139 reasoned that:
“If the language of “jurisdictional fact” is to be used, it is in my view properly reference to the criterion applicable to whether a financial agreement is “binding” – that is, to s 90G alone.
. . .
…those requirements are in the nature of a jurisdictional fact, compliance with which determined whether or not the court has the power to make orders pursuant to Part VIII of the Act…”
Although not addressed at length the view of Strickland J in Senior & Anderson was that the requirements imposed by s 90G apply to determine whether an agreement is binding and are in the “nature of a jurisdictional fact”.
In Yunghanns v Yunghanns (1999) FLC 92-836 at 85,723, paragraph 109, the Full Court detailed that the requirement that the Family Court, as a court of limited jurisdiction, before making orders in proceedings be satisfied that it has the jurisdiction to make the orders and that it is appropriate to exercise that jurisdiction. The Full Court stated that the court is required to “determine any essential facts upon which the exercise of its jurisdiction to make the orders sought ultimately depends (“the jurisdictional facts”)”. More recently jurisdictional facts have been discussed in authorities of this Court in relation to the existence of a de facto relationship (see Jonah v White [2011] FamCA 221 at paragraph 39 to 41; Vaughan v Bele [2011] FamCA 436 at paragraphs 3 and 8; Smyth v Pappas [2011] FamCA 434 at paragraph 4).
In the decision of Enfield City Corporation v Development Assessment Commission (2000) 199 CLR 135, the majority of the High Court at 148 discussed the term “jurisdictional fact” and stated that:
“The term “jurisdictional fact” (which may be a complex of elements) is often used to identify that criterion, satisfaction of which enlivens the power of the decision-maker to exercise a discretion. Used here, it identifies a criterion, satisfaction of which mandates a particular outcome.”
It follows that in relation to the husband’s application even if leave were granted to further amend his response to remove the reference to s 90G(1B), the court would not be empowered to declare the financial agreement binding. In my opinion, the power to make an order declaring that a financial agreement is binding arises if, and only if, all of the subsections of 90G(1) are satisfied, or in the alternative if all of the subsections of s 90G(1A) are satisfied. The form of s 90G(1) and (1A) and the subsections that must be satisfied prior to the court making an order that a financial agreement is binding are determined by the application of the provisions of the Transitional Act dependent on when the agreement between the parties was made.
In the matter before the Court, s 90G(1)(c) is not satisfied and therefore the court is not empowered under s 90G(1) to make an order that the financial agreement is binding. In the alternative, 90G(1A)(b) is not satisfied and therefore the discretion in s 90G(1A)(c) cannot be exercised in order for the court to make an order declaring, pursuant to s 90G(1A)(d) and s 90G(1B), that the financial agreement is binding.
CONCLUSION
Section 90G must be applied as amended by the provisions of the Transitional Act. As s 90G(1)(b) is satisfied and s 90G(1A)(b) is not satisfied in relation to the financial agreement between the parties dated 27 July 2009 the financial agreement cannot be declared binding pursuant to s 90G(1B) as the provisions of s 90G(1A) are not satisfied. Accordingly the court cannot make an order declaring that the financial agreement between the parties is binding as the discretion in s 90G(1A)(c) cannot be exercised.
COSTS
In accordance with order 8 of the Full Court in Senior & Anderson each party has been granted a costs certificate pursuant to s 8 of the Federal Proceedings (Costs) Act1981 (Cth) in respect of any costs incurred by each party in relation to the rehearing. Consequently, it is appropriate that I make no order as to costs, save and unless either party desires to argue that an order should be made for the shortfall of any costs.
I certify that the preceding One Hundred and Sixty Six (166) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Young delivered on 21 October 2011.
Associate:
Date:
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