Stant & Stant & Anor

[2015] FamCA 734

FAMILY COURT OF AUSTRALIA

STANT & STANT AND ANOR [2015] FamCA 734

FAMILY LAW – PROPERTY SETTLEMENT – Consent orders – Superannuation – Whether the Court is empowered to order payment of a specified sum from a spouse party’s superannuation fund to a non-spouse third party – Where the Court finds there is no power to do so and declines to make the consent orders proposed.

Family Law Act 1975 (Cth) ss 90MA, 90MB, 90MS, 90MT

APPLICANT: Mr Stant

1^st RESPONDENT: Ms Stant

2^nd RESPONDENT: Ms Mulberry

FILE NUMBER: SYC 4330 of 2014

ORDERS MADE: 4 September 2015

JUDGMENT DELIVERED: 7 September 2015

PLACE DELIVERED: Melbourne

PLACE HEARD: Sydney

JUDGMENT OF: Stevenson J

HEARING DATE: 27 August 2015 and written submissions

REPRESENTATION

COUNSEL FOR THE APPLICANT: Ms Bridger

SOLICITOR FOR THE APPLICANT: Garland Hawthorne Brahe

THE 1^ST RESPONDENT: Ms Stant appearing for and on her own behalf

COUNSEL FOR THE 2^ND RESPONDENT: Mr Di Francesco

SOLICITOR FOR THE 2^ND RESPONDENT: Wood Marshall Williams

Orders

1. The application that orders be made, by consent, in accordance with the document set out in paragraph 2 of these reasons is refused.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Stant & Stant and Anor has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

FAMILY COURT OF AUSTRALIA AT MELBOURNE

FILE NUMBER: SYC 4330  of 2014

Mr Stant

Applicant

And

Ms Stant

1^st Respondent

And

Ms Mulberry

2^nd Respondent

REASONS FOR JUDGMENT

The Proceedings

1. These proceedings concern alteration of property interests and spouse maintenance.  The parties are Mr Stant (“the husband”), Ms Stant (“the wife”), and Ms Mulberry (“the second respondent”).  The second respondent is the mother of the wife.  She holds a judgment against the husband, obtained with his consent, in an amount of $540,729.92.

2. The proceedings are listed for trial on 9 and 10 September 2015.  The parties have now submitted proposed consent orders in the following terms:

   BY CONSENT IT IS ORDERED:

   1.(a) An order under s.79 and s.90AE of the Family Law Act that Legal Super Pty Ltd ABN 37 004 455 789 as trustee of Legalsuper ABN 60 346 078 879 transfer an amount of $220,000.00 from the superannuation account of Mr Stant in respect of Membership No 40758961 to an account to be created in legalsuper in the name of [Ms Mulberry] (the creation of such account may be contingent on this transfer taking place) to [Ms Mulberry’s] Legalsuper account and that the said trustee comply with this order within 4 business days after the service of a sealed order and that [Mr Stant] pay the said trustee’s costs and expenses incurred in complying with this order;

   (b)An order under s.79 and s.90AE of the Family Law Act that AMP Superannuation Limited ABN 31 008 414 104 as trustee of AMP Flexible Lifetime Super Fund transfer an amount of $80,000.00 from the superannuation account of [Ms Stant] in respect of Membership Account number 940294945 to to an account to be created in legalsuper in the name of [Ms Mulberry] (the creation of such account may be contingent on this transfer taking place) [Ms Mulberry’s] Legalsuper account held by Legal Super Pty Ltd ABN 37 004 455 789 as trustee and that the said trustee comply with this order within 4 business days after the service of a sealed order together with notification of [Ms Mulberry’s] Legalsuper membership number and that [Mr Stant] pay the said trustee’s costs and expenses incurred in complying with this order;

   (c)An order that the Judgment in the transferred proceedings from the Supreme Court of New South Wales be set aside.

   (d)An order that Mr Stant pay [Ms Stant] spousal maintenance in a flat sum of $6000 per month on the first business day of each month until 21 January 2024 and which sum remains a flat monthly sum for the said period and is not to be indexed or otherwise increased.

   (e)If orders (a) and (b) above are not made, the proposed compromise between the parties contemplated by a Deed between them dated 11 August 2015 (“the Deed”) is null and void (including order 1(c) above) and the whole matter remains listed for hearing on 9 and 10 September 2015.

   (f)An order under s.79 of the Family Law Act that the personal property of the parties to the dissolved marriage is vested in the respective party holding possession to the exclusion of the other party.

   (g)An order under s.90G of the Family Law Act declaring that this financial agreement between [Mr Stant] and [Ms Stant] is binding on [Mr Stant] and [Ms Stant].

   THE COURT NOTES:

   1.If orders (a) and (b) above are not made, the proposed compromise between the parties contemplated by a Deed between them dated 11 August 2015 (“the Deed”) is null and void (including order 1(c) above) and the whole matter remains listed for hearing on 9 and 10 September 2015

   2.The Deed dated 11 August 2015 and in particular:

   (h)The Court notes that [Ms B]  agrees to pay [Ms Mulberry] a further sum of $210,000.00 (which is separate and in addition to the sums referred to in 1(a) and 1(b) above) as follows:-

   i)as to $60,000.00 within seven days of the making of Orders (a) and (b) above; and

   ii)as to $150,000.00 by instalments of $3,000.00 per month payable on the first business day of each month commencing on 30 August 2015 until payment has been made in full.

   (i)The Court notes that [Ms B]  agrees to provide [Ms Mulberry] with a consent judgment in the sum of $210,000.00 to be held in escrow pending the making of the payments referred to in paragraph (h)(i) and (ii) above.

   (j)If part only of the $210,000.00 referred to in (i) above is unpaid at the time of any breach of the payment obligations under paragraph (i) above the parties agree that the consent judgment will only be entered for the balance of the $210,000.00 that is outstanding.

   (k)If any amount in clause (h)(i) or (ii) above is not paid within the time for payment set out therein, then interests shall accrue on that sum to the extent it is not paid at Court rates in the Family Court in respect of the outstanding balance of the $210,000 that remains unpaid at that time.

   (l)Note the agreement that payment of the $210,000.00 contemplated by paragraph (i) above is exclusive of all moneys paid to date to [Ms Mulberry] by [Ms B]  or [Ms Stant] prior to the date of these orders, including any payments paid to [Ms Mulberry] by [Ms B]  in reduction of the Judgment or pursuant to the orders of Associate Justice Harrison made in the Supreme Court Action on 5 September 2015 and in the Family Court proceedings up to the date of this Deed.

   (m)In the event Orders 1(a) and 1(b) above cannot be made by the Family Court prior to 6 September 2015 then the entirety of these Orders and agreement will be of no effect.  In that event:-

   i)the Hearing Date is preserved; and

   ii)subject to any changes considered necessary by the Family Court the balance of the Family Law Orders must be complied with by the Parties.

   (n)Upon receipt by [Ms Mulberry] of the monies referred to in 1(a), 1(b) and 1(h)(i) above then by consent of [Ms Mulberry], [Ms B] and [Ms Stant]:

   i)all unsatisfied costs orders in the Supreme Court Action will be vacated;

   ii)the Second Family Court Proceeding will be dismissed within no order as to costs except that leave will be given for the proceedings to be resumed for the purpose of judgment being entered in accordance with 1(i), 1(j) and 1(k) above;

(o)Noted that these Orders are intended to finally resolve matters between [Ms Mulberry] and [Ms B]  and between [Ms Mulberry] and [Ms Stant] and between [Ms B]  and [Ms Stant] as to property issues and spousal maintenance.

1. On 26 August 2015 an authorised delegate of the trustee of AMP Superannuation Limited wrote to the wife in the following terms:

   26 August 2015

   [Ms Stant]

   PO Box 595

   NARRABEEN NSW 2101

   Dear [Ms Stant]

   Re; Proposed Orders under AMP Flexible Lifetime Superannuation Plan

   …- Member [Ms Stant]

   Under the Superannuation Savings Trust

   AMP Superannuation Ltd (Trustee)

   Please note the following

   Dear [Ms. Stant]

   Further to your email to the undersigned on 25 August 2015 and an email from Judge Stant on 24 August 2015 (which your email address was copied in on) we write to you in the capacity as our client.

   With respect to the proposed request of AMP Superannuation Limited as trustee of AMP Flexible Lifetime Super Fund (the “Trustee”) we confirm on behalf of the Trustee that:

   1.The Trustee does not wish to be joined in respect of the issue as to the making of the revised proposed order;

   2.The Trustee does not wish to be heard on 27 August 2015 as to either the power to make the revised proposed orders or the form of the order;

   3.The Trustee reserves the right to obtain legal advice on the issue of whether it can comply with an order in the form of your revised proposed order 1(b) given its obligations under applicable legislation.

   We have previously noted that the balance of your account has been moving due to changes in the market.  Please consider this in any re-drafting to your revised proposed order.

   The Trustee would further request the parties to the revised proposed order request that the court take a number of matters into account pursuant to section 90AE of the Family Law Act 1975 including the “economic, legal or other capacity of the third party” (i.e. the Trustee) to comply with the revised proposed order. The Trustee notes that the conditions of release of benefits of the Superannuation Industry (Supervision) Act 1993 and its associated regulations may apply to the revised proposed order 1(b).

   Please be advised that there is no power in the AMP Flexible Lifetime Super Fund to transfer a member’s interest in the fund to another member’s
   non-spousal or non-de facto account in another fund.

   We request that the parties to the revised proposed order provide a copy of this letter to the Family Court of Australia.

   The undersigned has authority to respond on behalf of the Trustee.

   Further Information
   If you have a question that is not answered in this kit, or you require further information, please contact AMP Customer Service on 131 267, who will be happy to assist.

   Sincerely,

   Ms Co

   Senior Family Law Administrator”

1. The request for the proposed orders to be made by consent came before me on 27 August 2015.  On that date counsel for the husband provided written submissions, which I incorporate into these reasons.  I raised with the parties’ legal representatives my serious doubts that I had jurisdiction to make the proposed orders.  Counsel for the husband and the second respondent then requested an opportunity to make further written submissions.  I have now received further written submissions from the husband and those of the second respondent, both of which were dated 31 August 2015. I incorporate these further submissions into my reasons.

2. On 4 September 2015 I refused to make the proposed consent orders.  I now furnish my reasons for that determination.

Consideration

1. The scheme of the Court’s treatment of superannuation benefits is contained in Part VIIIB of the Family Law Act 1975 (Cth) (“the Act”). The object of

   
   

   Part VIIIB is set out in section 90MA which reads as follows:

   SECTION 90MA OBJECT OF THIS PART

   90MA  The object of this Part is to allow certain payments (splittable payments) in respect of a superannuation interest to be allocated between:

   (a)the parties to a marriage; or

   (b)the parties to a de facto relationship;

   either by agreement or by court order.”

2. Section 90MB provides:

   SECTION 90MB THIS PART OVERRIDES OTHER LAWS, TRUST DEEDS ETC.

   90MB(1)  Subject to subsection (3), this Part has effect despite anything to the contrary in any of the following instruments (whether made before or after the commencement of this Part):

   (a)   any other law of the Commonwealth

   (b)   any law of a State or Territory;

   (c)   anything in a trust deed or other instrument.

   90MB(2)  Without limiting subsection (1), nothing done in compliance with this Part by the trustee of an eligible superannuation plan is to be treated as resulting in a contravention of a law or instrument referred to in subsection (1).

   90MB(3)  This Part has effect subject to the Superannuation (Unclaimed Money and Lost Members) Act 1999.

3. Section 90MS provides as follows:

   SECTION 90MS ORDER UNDER SECTION 79 OR 90SM MAY INCLUDE ORDERS IN RELATION TO SUPERANNUATION INTERESTS

   90MS(1) In proceedings under section 79 or 90SM with respect to the property of spouses, the court may, in accordance with this Division, also make orders in relation to superannuation interests of the spouses.

   Note 1: Although the orders are made in accordance with this Division, they will be made under either section 79 or 90SM. Therefore they will be generally subject to all the same provisions as other orders made under that section.

   Note 2: Sections 71A and 90MO limit the scope of section 79.

   Note 3: Subsections 44(5) and (6) and sections 90SB, 90SK and 90 MO limit the scope of section 90SM.

   90MS(2) A court cannot make an order under section 79 or 90SM in relation to a superannuation interest except in accordance with this Part.

4. Section 90MT provides as follows:

   SECTION 90MT  SPLITTING ORDER

   90MT(1)  A court, in accordance with section 90MS, may make the following orders in relation to a superannuation interest (other than an unsplittable interest):

   (a)if the interest is not a percentage-only interest – an order to the effect that, whenever a splittable payment becomes payable in respect of the interest:

   (i)the non-member spouse is entitled to be paid the amount (if any) calculated in accordance with the regulations; and

   (ii)there is a corresponding reduction in the entitlement of the person to whom the splittable payment would have been made but for the order;

   (b)an order to the effect that, whenever a splittable payment becomes payable in respect of the interest:

   (i)the non-member spouse is entitled to be paid a specified percentage of the splittable payment; and

   (ii)there is a corresponding reduction in the entitlement of the person to whom the splittable payment would have been made but for the order;

   (c)if the interest is a percentage-only interest – an order to the effect that, whenever a splittable payment becomes payable in respect of the interest:

   (i)the non-member spouse is entitled to be paid the amount (if any) calculated in accordance with the regulations by reference to the percentage specified in the order;

   (ii)there is a corresponding reduction in the entitlement of the person to whom the splittable payment would have been made but for the order;

   (d)such other orders as the court thinks necessary for the enforcement of an order under paragraph (a), (b) or (c).

   90MT(2)  Before making an order referred to in subsection (1), the court must make a determination under paragraph (a) or (b) as follows:

   (a)if the regulations provide for the determination of an amount in relation to the interest, the court must determine the amount in accordance with the regulations;

   (b)otherwise, the court must determine the value of the interest by such method as the court considers appropriate.

   90MT(2A)  The amount determine under paragraph (2)(a) is taken to be the value of the interest.

90MT(3)  Regulations for the purposes of paragraph (2)(a) may provide for the amount to be determined wholly or partly by reference to methods or factors that are approved in writing by the Minister for the purposes of the regulations.

90MT(4)  Before making an order referred to in paragraph (1)(a), the court must allocate a base amount to the non-member spouse, not exceeding the value determined under subsection(2).

Note:  The base amount is used to calculate the entitlement of the non-member spouse under the regulations.”

1. It seems to me to be clear on the face of the legislation itself that I am unable to make the proposed orders. Section 90MS(2) provides that the court is able to make orders concerning the parties’ superannuation benefits only in accordance with Part VIIIB of the Act. The object of Part VIIIB is to allow splittable payments only between spouses or parties to a de facto relationship

   
   

   (section 90MA). Section 90MT permits splittable payments to ‘the

   
   

   non-member spouse’, which would include a non-member former de facto partner. There is no mandate in section 90MT for a splittable payment to a third party. Pursuant to section 90MB, Part VIIIB overrides ‘any other law of the Commonwealth’, which would include other provisions within the Act.

2. The letter to the wife dated 26 August 2015 from the delegate of the trustee of AMP Superannuation Ltd indicates clearly a view on the part of the trustee that the Court lacks power to make the proposed orders. The letter requested that the parties convey that view to the Court.

3. For those reasons, I declined to make orders by consent in the proposed terms.

I certify that the preceding twelve (12) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Stevenson delivered on 7 September 2015.

Associate: 

Date:  7 September 2015