STRICKLAND & PURCELL
[2015] FamCA 372
•15 May 2015
FAMILY COURT OF AUSTRALIA
| STRICKLAND & PURCELL | [2015] FamCA 372 |
| FAMILY LAW – SUPERANNUATION – where consent orders entered into prior to Family Law Legislation Amendment (Superannuation) Act 2001 (Cth) – where consent orders provided for the foreshadowed superannuation amendments - where wife sought consequential orders to enable a splitting order to be made pursuant to s 90MT – intention of the Parliament to exclude orders made prior to commencement date – orders are not consequential – wife’s application dismissed. |
| Family Law Act 1975 (Cth) s 79A, 90MT, 90MZD |
Family Law Legislation Amendment (Superannuation) Act 2001 (Cth) s 4, 5
Bassi & KD Salesforce Specialists Pty Ltd v Maas (1999) FLC 92-867
Greetham & Greetham [2010] FamCA 246
Hackett & Hackett [2007] FamCA 1618
Lehear & Lehear [2009] FamCA 645
In the Marriage of Ravasini (1983) FLC 91-312
In the Marriage ofWest & Green (1991) 16 Fam LR 811
Molier & Van Wyk (1980) FLC 90-991
Wooley & Kingston [2007] FamCA 1509
| APPLICANT: | Ms Strickland |
| RESPONDENT: | Mr Purcell |
| FILE NUMBER: | ADF | 5212 | of | 1999 |
| DATE DELIVERED: | 15 May 2015 |
| PLACE DELIVERED: | Adelaide |
| PLACE HEARD: | Adelaide |
| JUDGMENT OF: | Berman J |
| HEARING DATE: | 14 May 2015 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr Heffernan |
| SOLICITOR FOR THE APPLICANT: | Heffernan & Co |
| COUNSEL FOR THE RESPONDENT: |
| SOLICITOR FOR THE RESPONDENT: | No appearance of Litigant in Person |
Orders
That the Application in a Case filed 8 April 2015 be dismissed.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Strickland & Purcell 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 ADELAIDE |
FILE NUMBER: ADF 5212 of 1999
| Ms Strickland |
Applicant
And
| Mr Purcell |
Respondent
REASONS FOR JUDGMENT
INTRODUCTION
On 8 April 2015 Ms Strickland (“the wife”) filed an Application in a Case seeking the following orders:-
(a)pursuant to paragraph 90MT (1) (a) of the Family Law Act 1975 (Cth) (“the Act”) whenever a splittable payment becomes payable in respect of the husband’s interest in AMP Super Policy (“AMP Flexible Lifetime Superannuation No. … but since converted by the respondent husband to Policy No. …) the applicant is to be paid the sum of $28,450 plus interest at the rate earned by the respondent’s AMP Fund on that amount calculated upon the date of separation (28.8.99) to the date of the payment to the applicant and there be a corresponding reduction in the entitlement the husband would have received in the aforesaid superannuation fund but for this order;
(b)that the operative time for paragraph (a) of these orders in respect of the husband’s interest in AMP Super is four business days after service of the sealed orders of the court on the Trustees for AMP Super, and;
(c)these orders bind the trustees of AMP Super to observe its obligations as Trustee under the Act and the Family Law Superannuation Regulations 2001.
Mr Purcell is the husband named in the proceedings. He has not filed a Notice of Address for Service, does not appear in the proceedings. He has signed an Acknowledgement of Service confirming his receipt of the documents on 12 May 2015. The document tendered on 14 May 2015 annexes email communication from the husband giving his consent to the proposed orders.
The Application in a Case is supported by an affidavit of Michael Anthony Heffernan (“the solicitor”) filed 8 April 2015. The basis upon which the application is brought is summarised in paragraph 9 of the affidavit:-
The application is by way of what is described as machinery provisions that is consequential orders required in order to enable the substantive orders to be implemented as intended and seen in the case of Wooley & Kingston [2007] FamCA 1509 which is a similar application.
Accordingly, the wife seeks to amend orders made by consent on 19 December 2000 for a final property settlement by the addition of orders that would seek a splitting order pursuant to s 90MT(1) (a) of the Act as against the husband’s interest in his AMP Superannuation policy.
Inherent in the wife’s application is the submission that the proposed splitting order should be considered as consequential relief and not as a variation of the original consent orders.
It is notable that the wife does not seek orders pursuant to s 79A of the Act nor is it alleged that the current orders are not able to be given effect and operation.
BACKGROUND
The husband was born in 1955. The wife was born in 1958. The parties were married in 1979 and separated on 21 August 1999 after a 20 year relationship. There are six children of the marriage none of whom are under the age of 18 years.
The proceedings commenced with the husband’s Application for final parenting orders filed 1 October 1999 and the wife’s Response filed 22 October 1999.
Comprehensive parenting orders were made on 29 October 1999 with a subsequent variation on 15 November 1999.
Upon the application of the wife, a divorce order was made on 27 October 2000.
The attention of the parties then clearly turned to settlement of property and an Application for Consent Orders was filed by the wife on 14 October 2000.
Consent orders were made by a Judge of the Family Court of Australia on 19 December 2000.
It is in respect of those orders that is the focus of the current application.
The orders were relatively straightforward. The wife was to transfer her interest in the former matrimonial home at Suburb B to the husband and contemporaneously with the said transfer the husband was to pay the wife a settlement sum. There is no suggestion that there was any default on the part of either party and there is no issue raised in the current application that impacts upon any part of the final orders other than as they relate to the husband’s superannuation interest.
The paragraphs of the order made 19 December 2000 that are relevant to the current application are as follows:-
…
1.8That the husband forthwith do all such acts and things as may be necessary to maximise the lump sum entitlement payable to him in respect to his superannuation entitlements.
1.9That the husband irrevocably authorises and directs the Trustees of the AMP Superannuation Fund or any successor thereof to pay to the wife on the vesting of the husbands AMP superannuation entitlement (“the husband’s fund”) the sum of TWENTY EIGHT THOUSAND FOUR HUNDRED AND FIFTY DOLLARS ($28,450) plus interest at the rate earned by the husband’s fund on that amount calculated from the date of separation to the date of payment to the wife less any pro rata tax or other deductions thereon payable by the husband’s fund (“the wife’s sum”);
1.10In the event that amendments are made to the Family Law Act 1975 and/or any operative superannuation legislation which enables the payment or assignment of the wife’s sum to the wife at a date earlier than that referred to in paragraph 1 (1.9) then the husband irrevocably authorises and directs the Trustees of the husband’s fund to forthwith pay or assign the wife’s sum or the equivalent thereof to the wife;
1.11That should the wife predecease the husband or die prior to receiving payment or assignment as described in paragraph 1 (1.9) of this order, then the entitlement due under such paragraph shall be paid or assigned to the legal personal representative of the estate of the wife.
1.12That in order to secure the payments referred to in paragraph 1 (1.9) to the wife or her estate, the husband shall forthwith:-
(a)notify in writing the Trustees of the husband’s fund of these Orders and give irrevocable consent to being bound by these Orders;
(b)irrevocably authorise the Trustees of the husband’s fund to:-
(i)deal with any benefits or payments due to the husband in the manner prescribed by these Orders;
(ii)pay all monies payable to the wife pursuant to these orders into a bank account to be nominated by the wife;
(c)instruct in writing the Trustees of the husband’s fund not to release any monies to him save and except in accordance with his irrevocable authorities as set out in these orders and his directions and elections as set out in these orders.
1.13That the husband do advise the wife in writing, through her solicitors, a minimum of fourteen (14) days before such time as he elects to retire from his present employment or to take voluntary retrenchment or if he is notified of retrenchment and/or otherwise becomes eligible to receive his superannuation entitlements and the husband irrevocably authorises the Trustees of the husband’s fund to so advise the wife in the event of his death or disability.
The orders sought do not seek to vary or discharge orders 1.9 to 1.13 inclusive but rather, seek to amend the final orders by the inclusion of the additional orders that make provision for a superannuation splitting order.
Accordingly, paragraph 1.10 of the final order is an attempt to foreshadow the amendments to the superannuation legislation pursuant to the provisions of the Family Law Legislation Amendment (Superannuation) Act 2001 (Cth) which came into effect on 28 December 2002.
Paragraph 1.9 of the orders was crafted in recognition that prior to the amending legislation superannuation entitlements were not considered property and accordingly the s 79 power did not extent to altering interests in unvested superannuation (In the Marriage ofWest & Green (1991) 16 Fam LR 811, Hackett & Hackett [2007] FamCA 1618).
On 5 February 2001, the wife’s solicitor forwarded a copy of the sealed Minutes of Order to the Trustees of the husband’s AMP Superannuation Fund. Consistent with the intent of the orders, the purpose was to obtain their acknowledgement and confirmation that they had received the orders and that they would undertake to comply with the obligations pursuant to the order.
The correspondence forwarded to the Trustees is Annexure MAH-2 to the solicitors affidavit. The terms of the letter are important and accordingly are set out as follows:-
I advise I act for [Ms Strickland]. Matrimonial property has finally been settled between her and her husband. This includes an agreement as to his superannuation fund. Enclosed is a copy of a sealed minutes of order. You will particularly note clauses 1.8,1.9, 1.10, 1.11, 1.12, 1.13, 2.1, 2.2 and 3. I should be pleased if you would write to me confirming receipt of:-
1.this letter dated 5 February 2001;
2.copy of sealed minutes dated 19 December 2000;
3.and that you have noted my clients’ interest in the above policy.
Hopefully when the new legislation is available [Ms Strickland’s] interest can be rolled over into her own superannuation fund.
The intent of the letter was to secure confirmation of receipt of the copy of sealed minutes and that the wife’s interest was noted.
The final reference to “when the new legislation is available” has an uncertain purpose. It does not suggest that the wife has an expectation of any interest she may have in the husband’s superannuation being the subject of a rollover, nor is it suggesting that she considers the provisions of the consent order to be conditional upon any new legislation providing for a rollover of any splittable entitlement.
The letter should therefore be read as confirming the finality of the consent orders made 19 December 2000 rather than there being any suggestion of the orders being of interim or transitory in nature.
It would appear uncontroversial that notwithstanding several attempts to evoke a response from the trustees of AMP Super, further correspondence was forwarded to them in 2000, 2003 and then in July, September and October 2014. No response has been apparently received.
Whilst the wife is not the author of the affidavit, I accept her solicitor’s report that the wife sought to confirm that upon the husband satisfying a condition of release and his superannuation entitlement then vesting, the trustees would pay her entitlement pursuant to the order. The advice apparently given was that they would be paying the entirety of the proceeds to the husband. I am prepared to accept the accuracy of the wife’s alleged telephone conversation simply because it confirms what is obvious (and was at the time) namely that the provisions of the order, but in particular paragraph 1.9, could not be binding on the trustees. What is not known is what efforts if any the husband has taken to seek the assistance of the trustees to enable his compliance with the orders notwithstanding that obviously they have no other obligation than to forward the husband’s entitlement to him upon it vesting.
Paragraph 8 of the affidavit sets out the husband’s perceived position:-
I also wrote to the respondent on the 8th July 2014 explaining the current situation and asking if he would consent to application to the Court to have the current orders brought under the provisions of the amended legislation so that AMP could pay the applicant her share direct rather than the whole proceeds of the Super Fund first going to him and he having to comply with the consent orders of 19 December 2000. He has generally indicated in a series of emails that he is content for this to be done, and asked AMP to do the same as indicated in the consent orders but that they replied they would need a court order directing them to comply.
There is no suggestion that the husband has not complied with the obligations under the order. Clearly, the husband cannot force the trustees to comply with terms of an order which are not able to be enforced against them. He can only do so much and it is not suggested that he has evinced an intention to not comply with the orders in terms an appropriate request to the trustees to pay to the wife her entitlement directly or in the alternative, to pay the wife the amount as set out.
DISCUSSION
The provisions of the Family Law Legislation Amendment (Superannuation) Act 2001 (Cth) provided for separating married partners to split and flag superannuation as and from 28 December 2002.
The amending legislation has no retrospective effect.
Sections 5 (2), 5 (3) and 5 (4) of the amending legislation state:-
5 (2)Subject to subsections (3) and (4), the superannuation amendments do not apply to a marriage if a section 79 order, or a section 78 agreement, is enforced in relation to the marriage at the start up time.
5 (3)If a section 79 order that is in force at the start up time is later set aside under paragraph 79A (1) (a) (b) (c) or (d) of the Family Law Act, then the superannuation amendments apply to the marriage from the time the order is set aside.
Where a court has made orders in relation to the property of the parties, the court has no jurisdiction and no power to make an order splitting or flagging any superannuation interest the parties may have.
The explanatory memorandum states that:-
The policy intention is that the superannuation amendments will not apply if a property settlement, either by a court approved agreement, under section 87 of the Family Law Act or a court order, under section 79 of the Family Law Act, has been finally concluded prior to the commencement of the superannuation amendments.
Subsection 4 of the amending legislation state:-
Section 79 order means “an order (other than an interim order) made under section 79 of the Family Law Act”.
Orders made pursuant to s 79A (1A) cannot be used to enable a subsequent splitting or flagging order to be made.
The wife does not seek an order pursuant to s 79A (1) of the Act. It is also not suggested by the wife to argue that the order was not a final order but rather an “interim” order. If so, it could be argued that the finalisation of the proceedings under s 79 has not yet been concluded and therefore consideration could be given to an order pursuant to s 90MT (1) of the Act not by way of consideration of consequential or machinery relief but rather, as part of the final orders.
In Bassi & KD Salesforce Specialists Pty Ltd v Maas (1999) FLC 92-867 at 86,265 the Court said:-
55.The Court’s power, under s. 79(6), to make property orders where it makes an order under s. 79(5) adjourning proceedings to await the occurrence of a significant financial event such as the receipt of superannuation, is not confined to making “interim” orders. By that sub-section it may make “such interim order or such other order or orders (if any) as it considers appropriate with respect to any of the property of the parties to the marriage or either of them” (emphasis added). Whilst the Full Court in Harris & Harris[1993] FamCA 49; (1993) FLC 92-378 at 79, 929 considered it unnecessary to draw the distinction which Nygh J drew between “interim” and “partial” orders in Burridge & Burridge (1980) FLC 90-902, it did not decide that there is no such distinction, or that it is inappropriate to draw it in a proper case.
It can be argued therefore that there is a distinction between an interim property order, a final order and perhaps even a final partial property order.
The wife however has not relied on s 79A or to argue that the orders are “interim” orders. Nor has she put forward an argument that seeks to amend the final orders so that paragraph 1.9 of the orders can be given better effect.
The wife instead relies upon a decision of Wooley & Kingston [2007] FamCA 1509 as authority for the proposition that the orders sought are machinery provisions and merely consequential orders required in order to enable the substantive orders to be implemented. Brown J varied the orders in Wooley (supra) on the basis that the variations sought would have no effect on the substantive property rights of the parties, it would cause no prejudice to the husband and that it gave effect to the intentions of the orders. In do so her Honour relied upon the decisions of McDonald & McDonald (1976) FLC 90-047 and Molier & Van Wyk (1980) FLC 90-991.
The Full Court In the Marriage of Ravasini (1983) FLC 91-312 considered that the Court has the ability to vary the machinery or “consequential” provisions of a property order but “has no power to vary an order for property settlement, it has power to enforce the order and to modify the machinery provisions of the order to effect enforcement…”.
The Court also found that:-
The test is not whether the unchangeable or substantive order is a just or proper order – that is a matter for appeal or an application under s79A but whether the part or parts of the order sought to be changed are part or parts of the substantive or whether they are orders made to give efficacy to that substantive order.
In Molier & Van Wyk (supra) the Full Court said at page 75,768:-
It has been decided that while this court has no power to vary an order for property settlement, it has power to enforce the order and to modify the machinery provisions of the order to effect enforcement provided this does not affect the substantive property rights of the parties… This power exists whether liberty to apply is reserved in respect of the order… the power to modify the machinery provisions of an order can be used to spell out the effect of the order where that is not clear.
The circumstances in Wooley (supra) are different to those as presented on behalf of the wife in these proceedings. Brown J considered that the proposed order would have no effect on the substantive property rights of the parties and would not cause prejudice to the husband. It was also important to her Honour that the husband was clearly recalcitrant and had not participated in the proceedings at any stage. The original order for settlement of property was made by a Registrar and undefended. The wife had no knowledge of the husband’s present circumstances of his whereabouts. Her Honour considered the intention of the original order and acknowledging that the wife would have the benefit of the husband’s superannuation entitlements upon him satisfying a condition of release namely, a vesting of the interest at age 55, given that the husband was about to reach that age the orders that she proposed to make did not change or effect the substantive rights of the husband.
That could not be said to apply in this case. There is no evidence as to the husband’s retirement plans or that he has satisfied a condition of release which would see his superannuation entitlement vest in him. Even if that was the case there is nothing to suggest that the husband will not comply with the order. Certainly the proposed amendments to the order do not carry an inference that the husband lacks goodwill. If anything the communication between the husband and the wife’s solicitors suggest that the husband has done all that is required of him under the order.
In Lehear & Lehear [2009] FamCA 645 Cronin J said:-
[23]…if it is suggested that by extending the time and exercising the power under Rule 18.10 a court is now invested with power to make orders pursuant to Part VIIB of the Family Law Act, I reject that. That is because the parties are not seeking to have the Court exercise its power generally under s 79 but rather, only the discrete issue in relation to superannuation because that power was not available in 2001. The parties themselves indicate that they do not want the court to examine any of the financial circumstances outside of making the orders relating to superannuation. That flies in the face of the court making an order which is just and equitable under s 79.
[24]In addition, I have serious doubts about the appropriateness as I have already indicate, of endeavouring to circumvent the very clear legislation of 2001.
In Greetham & Greetham [2010] FamCA 246 Strickland J considered the decision in Lehear (supra) and said:-
[70]The reasoning of Cronin J is quite persuasive. His Honour is arguably correct that allowing an extension of time for a party to seek the review of a Registrar’s decision, particularly by consent, is contrary to the policy intention of the superannuation amendments and seems to be contrary to s 5(2) of the amending Act. However, in my opinion, if it was the intention of Parliament to exclude the option of review of a Registrar’s decision, which would otherwise be open to the parties subject to an extension of time being granted, or to exclude the application of the amending legislation to the hearing of the review, the legislature should have made this intention clear and expressly said so.
Obviously, in Lehear and Greetham the Court was faced with the consideration of an order made by a Registrar and therefore the argument centres upon whether it was appropriate for a party to seek a review of the Registrar’s decision. That is not the case here but in both decisions I consider that their Honours were consistent in finding that Parliament intended that orders made in respect of superannuation are not amenable to the retrospective application of the amending legislation.
CONCLUSION
It cannot be said that the orders sought by the wife are consequential or machinery orders. The proposed orders create a right which did not previously exist.
The current order is clear. The wife is entitled to the sum of $28,450 plus interest at the rate earned by the husband’s fund calculated as and from the date of separation to the date of payment. It may be a consequential amendment that would change the obligation in terms of the manner by which the wife received her entitlement to better identify that it is the husband that bears the obligation rather than the trustees of the AMP Superannuation Fund but that is qualitatively different to an order under s 90MT (1) of the Act.
Section 90MZD (1) provides:-
An order under this Part in relation to a superannuation interest may be expressed to bind the person who is the trustee of the eligible superannuation plan at the time when the order takes effect. However:-
(a)in the case of a trustee who is not a secondary government trustee – the court cannot make such an order unless the trustee has been accorded procedural fairness in relation to the making of the order;
…
It cannot be said that the proposed amendments are inconsequential in their effect. An order pursuant to s 90MT(1) is an order that binds the trustees providing they have been afforded procedural fairness. The substantive rights of third parties are directly affected by such an order and it could not be suggested that the orders are merely mechanical. It is also trite to observe that even were I to consider the wife’s argument to have merit, that does not relieve her of the obligation to afford the trustees procedural fairness under s 90MZD. The trustees have not sighted a copy of the proposed order.
The modifications to the final orders sought by the wife will have a significant effect on the substantive property rights of the parties and the trustees.
There has been no evidence placed before the Court in respect of the calculation of interest. The current order provides for interest to be calculated at the rate earned by the husband’s fund from the date of separation to the date of payment “less any pro rata tax or other deductions thereof payable by the husband’s fund…”. The proposed order makes no reference to tax or other deductions in respect of the fund.
It is reasonable to opine that the sum likely to be calculated by reference to paragraph 1.9 of the final orders will be a different amount to the lump sum to which the wife would be entitled pursuant to the proposed order. If that is a reasonable assumption then clearly the substantive rights of the parties but in this case the husband, will be affected.
For these reasons I propose to dismiss the wife’s Application in a Case.
I certify that the preceding fifty five (55) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Berman delivered on 15 May 2015.
Associate:
Date: 15 May 2015
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