South Australian Superannuation Board and Hunter & Anor
[2010] FamCA 251
•25 March 2010
FAMILY COURT OF AUSTRALIA
| SOUTH AUSTRALIAN SUPERANNUATION BOARD & HUNTER AND ANOR | [2010] FamCA 251 |
| FAMILY LAW – PRACTICE AND PROCEDURE – where previous properly settlement orders were made by consent – where the orders provided that the husband’s superannuation interests were to vest absolutely in the husband – where the husband and wife never divorced – where the husband was in receipt of a pension payable by the Superannuation Board – where the husband subsequently died – where the wife’s application to the Superannuation Board seeking widows entitlements was denied due to the existence of a splitting instrument – where the wife filed an application seeking that the previous property settlement orders be set aside pursuant to s 79A and that orders be made in substitution – application by the Superannuation Board seeking leave to intervene or alternatively to be joined as a party to the proceedings – where the Board would have an interest in and be affected by the making of a further order – Superannuation Board joined as a party FAMILY LAW – PRACTICE AND PROCEDURE – whether the Superannuation Board should be permitted to be heard in relation to the s 79A application or only as to any further order to be made – where the determination of the s 79A application is an “important threshold question” – where the rights of the Board would be affected by the setting aside of the s 79 order – court satisfied that it is necessary and appropriate for the Board to be permitted to take part in the hearing with respect to the wife’s s 79A application |
| Family Law Act 1975 (Cth) ss 79, 79(10)(b), 79A & 92 Superannuation Act 1988 (SA) s 43G Finance Sector Union of Australia v Commonwealth Bank of Australia (1999) 94 FCR 179 |
| APPLICANT: | South Australian Superannuation Board |
| 1ST RESPONDENT: | Ms Hunter |
| 2ND RESPONDENT: | The Estate of Mr Hunter (deceased) |
| FILE NUMBER: | ADC | 4901 | of | 2008 |
| DATE DELIVERED: | 25 March 2010 |
| PLACE DELIVERED: | Adelaide |
| PLACE HEARD: | Adelaide |
| JUDGMENT OF: | Strickland J |
| HEARING DATE: | 25 August 2009 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr McDonald |
| SOLICITOR FOR THE APPLICANT: | Crown Solicitors Office |
| COUNSEL FOR THE 1ST RESPONDENT: | Ms Pyke QC |
| SOLICITOR FOR THE 1ST RESPONDENT: | Mathew Mitchell |
| COUNSEL FOR THE 2ND RESPONDENT: | No appearance |
| SOLICITOR FOR THE 2ND RESPONDENT: | Martin Robinson Solicitors |
Orders
UPON NOTING
That the South Australian Superannuation Board is entitled as a party to fully take part in all aspects of the proceedings instituted herein by the applicant wife
ORDERS
That the South Australian Superannuation Board be joined as a party to these proceedings.
That within 28 days of the date hereof the said Board file an affidavit setting out the orders that it seeks in this case (if any).
That the Application in a Case filed by the said Board on 30 March 2009 be dismissed and removed from the active pending cases list.
IT IS NOTED that publication of this judgment under the pseudonym South Australian Superannuation Board & Hunter and Anor is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth)
| FAMILY COURT OF AUSTRALIA AT ADELAIDE |
FILE NUMBER: ADC 4901 of 2008
| SOUTH AUSTRALIAN SUPERANNUATION BOARD |
Applicant
And
| MS HUNTER |
1st Respondent
| THE ESTATE OF MR HUNTER (DECEASED) |
2nd Respondent
REASONS FOR JUDGMENT
Introduction
The substantive proceedings are between Ms Hunter (“the wife”) and the estate of the late Mr Hunter, the husband, (“the Estate”).
On 25 June 2009 the wife filed an Amended Initiating Application in which she sought the following orders:
“1. Pursuant to Section 79A (1) (a) of the Family Law Act the orders for property settlement made on the 24th day of January 2003 in proceedings no. ADF 1848 of 2002 be set aside.
2. That in substitution for the said order made on the 24th day of January 2003 and pursuant to Section 79 of the Family Law Act: -
2.1That in full and final settlement of all claims for property settlement which either party may have one [sic] against the other.
2.1.1That the wife do retain all items of real or personal property currently in her possession power or control as her sole property;
2.1.2That all items of real or personal property comprising the assets of the late husband currently in the possession power or control of the executors of the estate of the late husband do vest in the estate of the husband;
2.1.3That there be no order as to the superannuation interests of the parties
In the alternative,
2.2That in full and final settlement of property all claims for property settlement whicheither [sic] party may have one [sic] against the other.
2.2.1That the wife do retain all items of real or personal property currently in her possession, power or control as her sole property;
2.2.2That all items [sic] real or personal property comprising the assets of the late husband currently in the possession power or control of the executors of the estate of the late husband do vest in the estate of the husband, subject to paragraph 2.2.3 hereof;
2.2.3That the estate of the late husband do pay to the wife the sum of ONE HUNDRED AND TWENTY THOUSAND DOLLARS ($120,000.00).”
I now have before me for determination as a preliminary issue an Application in a Case filed by the South Australian Superannuation Board (“the Superannuation Board”) on 30 March 2009 in which the Board seeks the following orders:
“1. That the South Australian Superannuation Board be permitted to intervene in the proceedings pursuant to s 92(1) of the Family Law Act, or alternatively that the South Australian Superannuation Board be joined as a party to the proceedings.
2. That the South Australian Superannuation Board has standing to be heard in relation to the issues arising on the wife’s application under s 79A of the Family Law Act.
3. Such other orders as may be necessary to give effect to the above orders.”
The wife opposes the application of the Superannuation Board in so far as it would entail the Board being able to take part in the hearing of the application pursuant to s 79A(1)(a) of the Act.
Background
The wife was born in 1930 and is now aged 79 years.
The husband and the wife were married in England in 1952 and separated on 31 December 2001. The husband and the wife never divorced.
The husband was a contributor to the superannuation scheme established by the Superannuation Act 1988 (SA). The husband retired on 31 January 1985 and from 1 February 1985 he received a pension, payable by the Superannuation Board, calculated in accordance with s 34 of the Act.
On 24 January 2003 final property settlement orders were made by consent between the parties. Those orders provided, inter alia, for the husband to pay the sum of $90,000 to the wife, with the wife to transfer to the husband her interest in a property at M and a motor vehicle. The husband and wife were otherwise to each retain any furniture and effects in their respective possession, their personal savings and investments, any life insurance or assurance and any other real or personal property or financial resources in their respective name or possession. Relevantly for current purposes, the order provided that the husband’s “superannuation and any rollover entitlements… shall vest in the husband absolutely free of all further claim or demand or right or entitlement of the Wife”.
The husband died in July 2008.
The executor of the husband’s estate was granted probate on 12 January 2009.
Following the husband’s death, the wife made an application to Super SA for widows entitlements. By letter dated 1 October 2008 the wife was advised by Super SA that the order of 24 January 2003 “finalises all claims for the settlement of property between yourself and the late Mr [Hunter], and this includes any superannuation and rollover entitlements.” Thus the wife’s application was denied.
The wife received a further letter from Super SA dated 30 October 2008 further explaining the reason for the decision not to pay to the wife a spouse pension. The letter explained that the decision was based on the relevant provisions of the Family Law Act 1975 allowing superannuation interests to be dealt with by court orders and s 43AG of the Superannuation Act 1988 (SA) which relevantly provided:
If a contributor dies and is survived by a spouse who—
(a) has received, is receiving or is entitled to receive a benefit under a splitting instrument; or
(b) is, under the terms of a splitting instrument, not entitled to any amount arising out of the contributor's superannuation interest under this Act (or any proportion of such an interest),
the spouse is not entitled to a benefit under this Act in respect of the deceased contributor (except in accordance with the instrument) and will not be considered to be a spouse of the deceased contributor for the purposes of section 46 (if relevant).
On 11 December 2008 the wife filed an Initiating Application in the Federal Magistrates Court seeking that the previous orders made in 2003 be set aside pursuant to s 79A of the Act and that orders be made in substitution, including an order that the husband’s pension scheme be transferred to the wife.
On 10 February 2009 the proceedings were transferred to the Family Court of Australia.
On 25 June 2009 the wife filed the Amended Initiating Application referred to above.
The Application in a Case filed by the Superannuation Board came before me for hearing on 25 August 2009. Judgment was reserved, and I made an order for the husband’s Estate to file a Response in these proceedings.
On 23 October 2009 the Estate of the late husband filed a Response to an Initiating Application seeking that the wife’s Amended Initiating Application be dismissed.
The issues
The issues requiring my determination are whether the South Australian Superannuation Board should be permitted to intervene in these proceedings or be joined as a party and whether the Board should be heard in relation to the wife’s application to have the previous orders set aside pursuant to s 79A.
Although there appears to be no dispute that the Board should be a party in relation to the orders sought in the event that the wife is successful in having the previous orders set aside pursuant to s 79A of the Act, it is still necessary in order to properly consider the application of the Board to be heard in relation to the s 79A issue to address the basis on which the Board would be made a party.
Another issue which had also been raised was whether the husband’s Estate should be named as a party to the proceedings in its own right, or whether the Estate needed to seek to be substituted for the husband, given that the Estate was not a party to the original property settlement proceedings. At the hearing on 25 August 2009 I indicated to the parties that I was satisfied that it was appropriate for the Estate to be a party to these proceedings in its own right, and on that basis I ordered the Estate to file answering documents to the wife’s application.
The relevant provisions of the Family Law Act 1975 (Cth) and the Family Law Rules 2004 (Cth)
Section 92(1) of the Act provides that any person may apply for leave to intervene in proceedings and that the court may make an order entitling that person to intervene in the proceedings. Pursuant to subsection (2), an order under s 92 may be made “upon such conditions as the court considers appropriate”, and subsection (3) provides that where a person intervenes in proceedings by leave of the court that person shall be deemed to be a party with all the rights, duties and liabilities of a party.
Chapter 6 of the Family Law Rules contains the rules relating to parties to proceedings. Rule 6.02 deals with the “necessary parties” to a case and provides:
(1) A person whose rights may be directly affected by an issue in a case, and whose participation as a party is necessary for the court to determine all issues in dispute in the case, must be included as a party to the case.
“Person” is defined in the dictionary to the Rules as including a corporation, authority or party.
Rule 6.05 outlines the procedural requirements for a person seeking to intervene in proceedings, and rule 6.06 sets out what is required from a person who is entitled to intervene.
Section 79(10)(b) of the Act provides that any person whose interests would be affected by the making of the order under s 79 is entitled to become a party to proceedings in which such an order is sought.
Submissions
On behalf of the South Australian Superannuation Board
Mr McDonald, appearing for the Superannuation Board, submitted that there are in effect two steps to the Board’s application.
The first is whether the Superannuation Board should be allowed to intervene in the proceedings or be joined as a party. In this regard, he submitted that there are clearly grounds for the Board to become a party. The Board is a necessary party within the meaning of rule 6.02 as the Board’s rights, or obligations, may be directly affected by an issue in the case. Further, there is the provision of s 79(10)(b) of the Act.
Mr McDonald submitted that it was common ground that the 2003 order is a splitting instrument, the effect of which under s 43AG of the Superannuation Act is that the Board is currently not required to make any payment of a pension to the wife. It is submitted that the effect of proposed order 2.1 of the wife’s Amended Application may be to require the Board to make a pension payment to the wife given that if successful there would no longer be a splitting instrument in place. Consequently the rights of the Board are affected by an issue in the case, and it follows that under rule 6.02 the Board is a necessary party and should be joined. It was conceded that the Board is not affected by the proposed alternative order 2.2 of the wife’s Amended Application.
The second step, which is the issue primarily in dispute is whether the Board can take part in the hearing in relation to proposed order 1 of the Amended Initiating Application, namely the issue of whether the previous orders should be set aside pursuant to s 79A of the Act.
Mr McDonald contended that although the orders sought by the wife, firstly for the previous orders to be set aside, and then for orders in substitution, are distinct steps, they are nonetheless part of a single proceeding or part of the same matter. Thus if the Board is considered to have “standing” in relation to the second aspect of the matter, it would have standing in relation to the matter generally (Finance Sector Union of Australia v Commonwealth Bank of Australia (1999) 94 FCR 179 at 186-187). In other words, if the Board should be made a party with respect to the matters arising for consideration in proposed order 2.1, then it should have standing to be heard in relation to the issues arising from proposed order 1.
It is the Superannuation Board’s position that the conditions of s 79A(1)(a) have not been met in this case, and Mr McDonald contended that proposed order 1 is a “necessary step” towards the wife achieving the result sought in proposed order 2.1. Thus, as the Board has an interest in order 2.1, it has a “relative interest” in order 1 and whether that order should be made. The satisfaction of the conditions for s 79A(1)(a) to apply is a critical step in the success of the wife’s argument, and a finding that those conditions are not satisfied would dispose of the wife’s application and the attempt to require the Board to pay a pension to the wife. The Board thus seeks to protect its interests by taking part in the hearing in relation to the s 79A application. It was submitted that the question of whether the order is set aside is “real and substantial”, not merely academic.
In summary, Mr McDonald contended that whether the previous order is set aside is an “important threshold question” which depending on the result “opens the gate” to affecting the rights of the Board.
Mr McDonald also submitted that if the application was to vary the property settlement order and not set it aside and substitute a new order then there would be no question that the Board would have standing given there would just be a single step involved. Thus, it is said, it would be “bizarre” if just because the wife’s application involved a two-step approach the Board is prevented from being heard in relation to the first step given that the result of a variation application would be the same as an application to set aside the orders and substitute a new order.
A further argument put forward on behalf of the Superannuation Board was that the Board in any event does have a direct interest in matters arising from proposed Order 1. It was argued that if the previous order is set aside, without more, the effect is that there will no longer be any splitting instrument and the requirement for the Board to pay a pension to the wife may be enlivened.
Finally, it was submitted that the matter raises potentially complex questions of statutory construction and that if the Board were not permitted to intervene there would be no effective contradictor in the proceedings. Thus it was in the “public interest” for the Court to be assisted by submissions from both sides. Mr McDonald conceded in the course of his oral submissions, however, that this point would not be of such significance if the husband’s Estate proposed to take a more active role in the proceedings than it had to date. At that time it was unclear what position the Estate would finally take. However as referred to above, since then the Estate has filed a Response seeking an order dismissing the Application.
Submissions on behalf of the wife
Ms Pyke QC, senior counsel for the wife, outlined that there is a two step process in applications under s 79A, firstly whether the order should be set aside, and secondly if the order is set aside, whether any other order should be made. It was conceded by Ms Pyke that the Superannuation Board would have an interest if the previous order was set aside, as the Board would clearly be a party whose interests may be affected by the making of a further order.
Ms Pyke submitted, however, that as the authorities make clear, when determining a s 79A application, the Court is to look at the matter as at the date the order was made, and in this respect it is the facts and circumstances peculiar to the wife and the husband and their legal advisers at the time the order was made which are relevant. It was submitted that this exercise has nothing to do with the Superannuation Board and that it would not be appropriate to allow someone who was not a party to the initial proceedings to now take part in a hearing with respect to issues that go to the circumstances in existence at the time of the making of the orders.
Ms Pyke argued that the submission made on behalf of the Board that it would suffer detriment if it was not heard on the first issue as there would be no splitting instrument if the order is set aside, overlooks the fact that the wife’s application is not just an application to have the previous order set aside, but is also seeking orders in substitution.
In support of her argument, Ms Pyke used the analogy of grandparents intervening in proceedings involving property settlement and children’s issues to seek orders in respect of the children, highlighting that this does not give them “carte blanche” to make submissions in relation to the property issues between the parties. Ms Pyke also provided the additional analogy of a creditor intervening in property proceedings to be heard in relation to their debt. This would not give the creditor status to cross examine the parties at large about the parties’ contributions, for example, as their status or right to be heard would be limited to the issue of the debt.
Ms Pyke contended that it is not appropriate to give someone status to be heard in proceedings simply because there may otherwise be no contradictor.
Addressing the distinction raised on behalf of the Superannuation Board between varying and setting aside an order under s 79A, Ms Pyke made reference to the decisions of Simpson and Hamlin (1984) FLC 91-576 and Parker and Parker (1983) FLC 93-364. Ms Pyke submitted that whether an order is set aside or varied depends on the degree of intervention required and that, whether an order is set aside and substituted, or varied, the power to make the new order or the variation of the old order comes from s 79.
Discussion
The first issue for my determination is whether the Superannuation Board should be permitted to intervene in these proceedings or be joined as a party.
The power of the Court to grant leave to a party to intervene is provided by s 92 of the Act, and rule 6.05 of the Family Law Rules outlines the procedure to be followed in seeking that permission.
However, rule 6.02 also provides that “[a] person whose rights may be directly affected by an issue in a case, and whose participation as a party is necessary for the court to determine all issues in dispute in the case, must be included as a party to the case”. There is also s 79(10)(b) of the Act.
In the event the wife is successful in her application to have the 2003 orders set aside pursuant to s 79A, she seeks an order (proposed order 2.1), inter alia, that there be no order as to the superannuation interests of the parties. The effect of such an order would be that the Superannuation Board may be required to make pension payments to the wife as there would be no splitting instrument in existence.
The Superannuation Board is therefore a “person” whose rights will be directly affected by an issue in the case. Indeed, the wife concedes that if the previous order was set aside pursuant to s 79A, the Superannuation Board would clearly have an interest in, and would be affected by the making of, a further order.
Thus, although it is quite appropriate that the Superannuation Board be permitted to intervene in these proceedings that in fact may be unnecessary for the Board to become a party. The Board clearly comes within rule 6.02, but more importantly comes within s 79(10)(b). As such the Board is a “person entitled to intervene”, ie, without obtaining leave of the Court. Strictly, all that would be required of the Board would be compliance with rule 6.06(2) of the Family Law Rules and in effect the Board would automatically become a party. However, what I propose to do is to make an order to short cut that process and I will set that out later in these reasons.
The second issue, and which is the contentious issue, is whether the Superannuation Board is able to take part in the hearing with respect to the wife’s s 79A application itself, or only as to the issue of any further order to be made.
In this case, the Superannuation Board was not a party to the original proceedings for property settlement between the husband and the wife. The orders made by consent in 2003 did not directly affect the South Australian Superannuation Board. The only order made with respect to the husband’s superannuation entitlements, was that his superannuation and any rollover entitlements were to vest absolutely in him.
However, the relevant question here is whether the Board has a sufficient interest in the order sought, namely the order setting aside the previous orders, and not whether the facts and circumstances that existed at the time the previous orders were made concerned matters only between the husband and the wife.
I consider, as submitted by Mr McDonald, that while the setting aside of the order under s 79A may technically be a distinct step from the subsequent determination of what orders are to be made in substitution, they are nonetheless part of the same proceeding. The “second step” is necessarily predicated on the first.
If the wife is unsuccessful at the first step and the order is not set aside, there will be no question of the Court looking at what order should be made in substitution. As Mr McDonald submitted, the determination of the s 79A application is an “important threshold question”, which depending on the result “opens the gate” to the rights and obligations of the Board being affected. The Board is able to, in effect, “protect” its interests if it is successful in opposing the wife’s application to have the order set aside.
I also accept the submission of Mr McDonald that, given the particular circumstances of this case, if the s 79 order is set aside, without more, the rights of the Board would be affected. As the previous order would no longer be in existence, there would no longer be a splitting instrument, and the requirement of the Board to make pension payments to the wife may effectively be “enlivened” even if no further order was made by this Court. As Mr McDonald submitted “one of the barriers which presently absolves the Board of any duty to make pension payments to the wife will be removed.”
It is not to the point that the wife is in fact seeking further orders. In the event an order is set aside pursuant to s 79A, the Court may make an order in substitution “if it considers appropriate”. It is possible that the Court in this case may not consider it appropriate to make an order in substitution, however, in which case the Board may be left in the position of being required to make payments to the wife.
Thus the Superannuation Board’s rights could also be affected by the result of the “first step” of whether the order should be set aside.
In the course of her submissions, Ms Pyke made reference to the situation where grandparents or creditors may intervene in proceedings, highlighting that in such cases, the extent of the participation of such an intervener is limited. I do not consider, however, that such examples are analogous to this case. Here, the Superannuation Board’s interest in any order the Court may make in substitution of the order set aside is necessarily intertwined with the initial s 79A determination. Indeed if the order is set aside, the Superannuation Board’s interests will be affected even without a further order. This is not a case where the two steps involve distinct and separate issues such that the Board has no interest in the determination of the s 79A application.
In these circumstances I am satisfied that is necessary and appropriate for the Superannuation Board to be permitted to take part in the hearing with respect to the wife’s s 79A application. In saying that, I acknowledge that the extent of the Superannuation Board’s involvement in the s 79A application may be limited given the Board was not privy to the circumstances at the time the consent orders were made. I note that it was conceded by Mr McDonald that it was probably unlikely the Board would be a position to adduce any evidence itself, but that it would want to cross examine any witnesses called and to test any evidence adduced.
On another issue, there was some discussion at the hearing before me regarding the distinction between the variation of an order and the setting aside of an order pursuant to s 79A, and whether an order varying the original order is an order made under s 79. It seems such discussion arose from the wording of s 79A that “the court may, in its discretion, vary the order or set the order aside and, if it considers appropriate, make another order under section 79 in substitution for the order so set aside.” (Emphasis added)
Although this issue does not require my determination given that in this case the wife seeks only that the order be set aside and new orders made, the authorities make clear, despite any ambiguity that may appear from the wording of s 79A itself, that whether an order is varied or the order set aside and a new order made as a result of s 79A proceedings, the power to do so is under s 79 of the Act. (See Parker and Parker (1983) FLC 91-364, Simpson and Hamlin (1984) FLC 91-576)
Conclusion
In the circumstances I propose to make an order that the South Australian Superannuation Board be joined as a party and file an affidavit setting out the orders that it seeks (if any). However, it is unnecessary to make an order as to the involvement of the Board in the determination of whether the previous orders should be set aside. The Board will have that right as a party. Thus I will just make an appropriate notation.
I certify that the preceding 60 paragraphs are a true copy of the reasons for judgment of the Honourable Justice Strickland delivered on 25 March 2010.
Associate
0
2
6