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									Family Law Property Essentials: Case Update




               Michael Emerson
        Accredited Family Law Specialist
Emerson Family Law
Contributions
In Marriage of Krassas [2005] FamCA 803


The Trial Judge had assessed the wife‟s contributions in terms of a range rather than a
fixed percentage. The wife had derived a large inheritance late in a 17 year marriage.


The Trial Judge, Justice Watt, had assessed the wife‟s contributions as being in the range
of 75-85% rather than a fixed percentage amount.


On appeal, the Full Court held that a Trial Judge should generally determine the
contribution by each party as a fixed percentage, particularly where the contributions to
assets and the impact of them on the parties‟ overall asset worth can be identified.


The Court held that while the opportunity to depart from the staged process remains open
to a Trial Judge under s.79(4), alternative approaches have dangers and should be
avoided, subject to there being reasons provided for such a departure.


It seems that in this case, despite the evidence as to the overwhelming contributions by
the wife, the Judge allowed himself to be distracted by what might be unfair for the
husband after a 17 year marriage.


Long Marriage – “Unequal Contributions”
RWW v JWW [2006] Fam CA 1288


The case involved a long marriage of 33 years with the parties having two adult children
at the time of the hearing.


Assets acquired during the marriage were met from income produced from businesses
operated by the parties. The parties had also established a trust, the income from which
was used for family purposes.


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At first instance Carmody J had described the wife‟s case as:


       “…an impressive array of friends, acquaintances, employees and
       business associates in support of her case that the husband was a
       basically lazy unmotivated and unsupportive husband, who played little
       or no useful role in business or family matters ”.


In assessing the wife‟s contributions at 70 : 30 Carmody J concluded as follows:


[118]. It is not a special, exceptional or even stellar performance as a superwoman
       balancing business responsibilities with home duties that distinguishes her
       s.79(4)(a), (b) and (c) contributions from those of the husband, but his significantly
       inferior input in both of those realms.         In my assessment, the husband‟s
       contribution, both quantitatively and qualitatively, is overshadowed by the wife‟s.
       This is simply an acknowledgement of a reality that must be reflected in the
       percentage division and final orders to achieve a fair or just and equitable result. It
       is not a form of reverse discrimination on the basis of gender. Nor does it give
       preferential treatment to one role over the other. His performance in his role, in my
       view, fell well below par. The outcome would have been the same if the shoe had
       been on the other foot.


His Honour Justice Carmody had found that the wife‟s contributions outstripped those of
the husband‟s to such an extent that the justice and equity of the situation would not be
met in his Honour‟s opinion unless she received or retained at least 70 per cent of the
available net assets before adjustment.


The husband argued on appeal that the contribution of the parties during the marriage of
33 years expressed as a percentage as to 70/30 per cent in favour of the wife was
outside the generous ambit within which reasonable disagreement is possible and plainly
wrong based on the following facts:


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   a. It is common ground that the parties each came to the relationship with no property
       of substance;

   b. Two children were born to the parties and grew to independent maturity during the
       parties‟ co-habitation;

   c. There is no relevant „external‟ benefit received by either party during their co-
       habitation;

   d. There is no assertion of any „special contribution‟ by the wife;

   e. There is no finding of any „negative contribution‟ by the husband;

   f. Each of the parties worked, though in separate spheres, in their joint interests; and

   g. The parties married „for better or worse‟.


The Full Court, however, held that “in the absence of a successful challenge to the
primary findings of fact, we can only conclude that his Honour‟s assessment of the
parties‟ contributions was open to him”.


This case is interesting as normally in such a long marriage where the parties each
worked in a family business and applied the profit from the business to acquiring
matrimonial assets, we would advise our clients that contributions would ordinarily be
regarded as equal.


The nature of the corroborative evidence called by the wife is also interesting.


Orders Exceeding the Pool of Available Assets
Gollings and Scott (2007) FLC 93-319


This case involved an appeal by the husband against property settlement and spousal
maintenance orders.




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The husband submitted that an order where the wife received the home unencumbered
effectively meant that the wife received more than 100% of the pool of assets. The
husband submitted that such an order was beyond the court‟s power or if within the
court‟s power unjust.


The Trial Judge included a post separation contribution by the husband to his de facto
partner‟s property as an asset in the pool of property.


Issues arose in relation to add backs and failure to include add backs which one or other
party sought to have included, such as the wife‟s sale of her motor vehicle prior to trial.


Reference was made to the Full Court in Chorn and Hopkins where after an extensive
examination of the authorities relating to paid legal fees, the court concluded that whether
or not they were to be added back into the pool of assets available for division was
ultimately a matter for the discretion of the Trial Judge.


On appeal the court held that the Trial Judge had failed to adequately explain her reasons
for including the husband‟s contribution to his new partner‟s property as an add back.


In relation to orders that exceed the pool of available assets, the court held that the case
law establishes that generally an alteration of parties‟ interest in property under s.79 is to
be made out of their identified property at trial. Although the inclusion of add backs can
have the effect where an order giving a party the whole of the pool, effectively gave her
more than was actually there.


Whether Changed Circumstances Rendered s.75(2) Adjustment Insupportable
Van Ballekom v Kelly [2005] FamCA 853


The husband appealed against order for property settlement made by Purdy J in October
2004. The wife had breast cancer and the evidence of her treating doctor at the trial was


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that she had a mean survival time of 12 months. The wife died pending the hearing of the
appeal.


The Trial Judge considered the matters referred to in s.75(2), noting them to be “difficult”.
He concluded that, but for the wife‟s short life expectancy, there would be, “a very big
adjustment for s.75(2)” in her favour. In fact he made an adjustment of 5% in her favour
on the basis of the “difference in their incomes”.


The husband appealed, arguing that the Trial Judge had erred in failing to make an
adjustment in respect of s.75(2) factors in his favour, either on the basis of His Honour‟s
reasons or by further evidence namely the death of the wife.


The Full Court held that the further evidence that the wife is now deceased does
“demonstrate that the order under appeal is erroneous” in that the s.75(2) adjustment in
favour of the wife cannot now be sustained and nor could the failure to make a s.75(2)
adjustment in the husband‟s favour in the circumstances which arose after the wife‟s
death.


Domestic Violence – Kennon
S v S [2005] FLC 93-246


Husband‟s appeal against property orders. An issue on appeal was the Trial Magistrate‟s
treatment of the wife‟s allegations of domestic violence perpetrated by the husband, as a
factor relevant to assessment of contribution. The wife was a legal secretary up until the
birth of the first child and the husband was employed as an air traffic controller throughout
the relationship.


FM Rimmer gave the wife an adjustment on contributions of 5% for Kennon type domestic
violence.




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Family Law Property Essentials.               6                            Michael Emerson
                                                                         Emerson Family Law
On appeal, the husband‟s Senior Counsel submitted that the wife‟s evidence fell short of
establishing the requisite “course of violent conduct which is demonstrated to have had a
significant adverse impact upon the other party‟s contributions to the marriage, or, put the
other way, to have made his or her contributions significantly more arduous that they
ought to have been”.


In dismissing the appeal, the Full Court held that the term “course of conduct” is a broad
one and that conduct need not be frequent to constitute a course of conduct, although a
degree of repetition is required. Further, that a 5% adjustment in favour of the wife taking
account of the husband‟s violence towards her was not shown to have fallen outside a
reasonable exercise of the Trial Magistrate‟s discretion.


In this case, the conduct alleged against the husband apparently comprised “arguments
or incidents” occurring about twice yearly.


Commenting on the case in Current Family Law, Sarah Middleton noted that this case is
significant as seemingly the only reported case since in Marriage of Doherty [1996] FLC
92-652 to recognise an increased contribution by one spouse on account of domestic
violence suffered at the hands of the other spouse and considers that in such
circumstances it was regrettable that the Full Court did not take the opportunity to
elucidate further on the Kennon Principles and their application.


There are a number of unreported decisions involving the application of the Kennon
Principles and these include the following:
          Kennedy v Kennedy [1999] FamCA 425;
          Addison and Addison [Nicholson CJ] 23.11.98;
          Morgan and Morgan [1999] FamCA 31;
          Khan and Khan [Waddy J 27.03.99];
          Eggleston and Eggleston [O‟Ryan J 15.06.99];
          Orr v McDougall [Faulks J 02.07.99];
          X and X [Coleman J 06.08.99]; and

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Family Law Property Essentials.               7                           Michael Emerson
                                                                        Emerson Family Law
          Byrnes and Barnes [Chisholm J 07.02.00].


Extracts of these decisions were collated by my colleague Stephen Page and included in
an addendum to his paper entitled “Kennon Update” prepared for the Queensland Law
Society in May 2003. Doubtless there have been numerous other unreported decisions
involving the Kennon principles since that time.


Long Service Leave Entitlement
M v M [2005] FamCA 1334


The case involved two teachers. When dealing with financial resources, the trial court
omitted to identify the husband‟s entitlement to nine months paid long service leave. The
wife contended on appeal that the husband‟s paid long service leave entitlements ought
to have been referred to and taken into account under s.75(2) of the Act.


On appeal, Warwick J noted that counsel for the wife acknowledged the evidence that the
husband had not made up his mind whether he would take his long service leave
entitlements as a lump sum or as paid leave and there was no evidence about what the
husband intended to do if he took his long service leave as paid leave, in particular, there
was no evidence that he intended to turn the period to his financial advantage.


His honour looked at the authorities and particularly the Full Court decision in Gould and
Gould (1996) FLC 92-657 where at 82,774 the Court said:


       As a matter of principle, we find it difficult to accept that an entitlement to
       substantial long service leave may only be regarded as a financial resource when
       the employee spouse is likely to retire and receive a lump sum payment in lieu of
       leave taken. The ability to take a lengthy period off work, but still be paid a normal
       salary during that period, may constitute a financial resource in at least some
       circumstances. In a given case, for example, that ability may enable the relevant
       party to undertake other temporary employment, pursue a course of further

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Family Law Property Essentials.                8                              Michael Emerson
                                                                            Emerson Family Law
       education or retraining, or even commence or develop a business during such paid
       leave, none of which would otherwise be available to him or her. In such
       circumstances such a facility would be likely to give that party an economic
       advantage which can properly be categorised as a financial resource.


       In this case, however, our attention has not been drawn to any evidence which
       would lead to a conclusion that the husband would be likely to engage in any of the
       sorts of activities which we have identified above in the event that he took his
       12.4 weeks of accrued long service leave, or that he would even wish to do
       anything other than merely enjoy a period of leave. In those circumstances we are
       unable to conclude that his Honour erred in failing to treat this long service leave
       entitlement as a financial resource sufficient to call for an adjustment of the parties’
       property interests in favour of the wife.”


His Honour concluded that “In short, whether weight should be given to a leave
entitlement when considering section 75(2) factors depends on the evidence”.


Whether Wife Should Receive Her Entire Entitlement in Non-Superannuation
Assets
Levick and Levick (2006) FLC 93-254


The parties made competing Property Adjustment Applications following a 22 year
marriage.


The wife‟s Counsel submitted that all her entitlement should come from non-
superannuation assets because of the cost to her of rehousing. The husband‟s Counsel
submitted a mix of assets including superannuation was appropriate and that the husband
also needed to rehouse to a standard appropriate for the children to stay with him.


Moore J held the appropriate arrangement was for the wife to receive part of her
entitlement in superannuation and part in non-superannuation assets.

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                                                                          Emerson Family Law
Doherty and Doherty [2006] FamCA 199


In competing Property Applications the Federal Magistrate divided the property of the
parties 55/45 in the wife‟s favour ordering that she receive her entitlement by retaining the
family home with the husband to receive most of his entitlement in superannuation.


Although dismissing the appeal in the absence of evidence in support of the Orders
sought by the husband and in the absence of submissions on his behalf in relation to the
Form of Orders, the Full Court held that consideration of the “mix” of the assets which
each party will be left as a result of proposed Orders would seem a necessary, if not
critical, factor in determining the justice and equity of proposed Orders in each case in
which superannuation interests are involved.


Bifurcation of s 79A Applications and Summary Dismissal
Gitane and Velacruz (2007) FLC 93-309


This was an appeal by the husband against orders that his s.79A application be
dismissed and that a stay application be vacated.


The husband sought to resist enforcement of earlier orders by the wife.


The wife applied to bifurcate the husband‟s s.79A Application to determine whether any
grounds existed to set aside the original order.


The trial judge summarily dismissed the husband‟s Application and the husband
appealed.


The husband was successful on appeal.




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Family Law Property Essentials.              10                            Michael Emerson
                                                                         Emerson Family Law
The court held that the trial judge seemed to make it abundantly clear that it was a case in
which bifurcation was appropriate, but then proceeded to summarily dismiss the
husband‟s application although there was no such application pending.


On appeal, the court held that, effectively, the wife‟s application was for bifurcation of the
s.79A Application on the basis that if the first step in the 79A Application of showing that a
ground for setting aside could not succeed, then it would be inappropriate to put the
parties to the expense of having to prepare what would be a fresh s.79 case.


The court looked at the principles to be applied in an application to summarily dismiss and
Kay J paraphrased the salient points as follows:


   1. That relief for summary dismissal is rarely and sparingly provided;
   2. That it is only available if it is clear on the face of the documents of the person
       asserting a cause of action that there is no reasonable cause of action or that it is a
       frivolous or vexatious one;
   3. That it is not enough to attain summary dismissal to show that it is a weak case;
   4. That if there is a defect in the pleading and it appears that the party still has a
       reasonable cause of action, the court will allow the party to reframe it‟s pleading;
       and
   5. That one only summarily dismisses if it is clear that the case is doomed to fail.


In this case, the court said that, looking at the case outlined on the husband‟s material, it
could not conclude that his case was doomed to fail nor that it was appropriate for the
Trial Judge to reach that conclusion.


Informal Agreement Followed by Subsequent Proceedings
DW & GT [2005] Fam CA 161


This was an appeal against orders made by Bell J in 2004 dismissing the wife‟s
application for property settlement.

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Family Law Property Essentials.              11                            Michael Emerson
                                                                         Emerson Family Law
The parties had effected a division of their property in 1997 through an informal
agreement. At trial before Bell J, the wife contended the earlier division amounted to a
„partial property settlement‟ while the husband contended the agreement was intended to
finalise the parties‟ financial arrangements. The matter was complicated by the enactment
of the superannuation reforms.


His Honour Justice Bell said where an agreement had been entered into, it could not be
binding upon the court but evidence of what the parties considered to be fair at the time of
the agreement.


On the facts his Honour considered the wife was adequately compensated at the time of
the agreement in 1997 and dismissed the wife‟s application.


The basis of the appeal was that Bell J had failed to apply the law at the date of trial to the
assets at the date of trial.


In determining the matter and allowing the appeal the Full Court set out the following
principles:


[39].   Where parties enter into an agreement concerning property, other than an
        agreement approved under the provisions of the Act or embodied in consent
        orders, and one party subsequently commences proceedings under s.79 for an
        alteration of property interests, the Court must determine the application on its
        merits having regard to the factors as set out in s.79(4) as they exist at the time of
        the hearing of the application under s.79 and according to the law in force at that
        time and not, as to either of those two matters, at the time the agreement was
        made. There is no threshold test, before embarking upon the s.79 exercise, to
        determine whether the earlier agreement was just and equitable at the time it was
        made according to the facts as they then existed and the law then in force. The
        earlier agreement should be considered (as an indication of what the parties may

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        have regarded as just and equitable at the time), but its provisions only given effect
        if they coincide with an order which is just and equitable according to s.79 at the
        time of the hearing.


[40].   In determining s.79 Applications in circumstances where there has been an earlier
        agreement, it will often be necessary to consider what was the value of the parties‟
        assets at the time of the agreement, what their various contributions were to that
        time, and what might have been an appropriate s.75(2) adjustment.                      A
        consideration of these matters might well be necessary in order to provide a
        background to the parties‟ understanding of what was a just and equitable
        settlement at the time. However, and perhaps more significantly, it would generally
        be necessary for the Court to acquaint itself with changes in the composition and
        value of the property pool, so that post-separation contributions can be assessed.


The Full Court considered that his Honour had also erred in not considering all the
relevant s.75(2) factors as they applied at the date of trial rather than in 1997.


Bias, Summary Dismissal, s.79A Applications
DBL & GJL [2006] Fam CA 1289


This appeal involves discussion of issues of bias, summary dismissal and s.79A
Applications arising from the wife‟s persistent efforts to reopen a decision of Judicial
Registrar Jordan as he then was in 1994.


The matter ultimately came before Carmody J at first instance who refused to disqualify
himself on grounds of alleged bias and, having concluded the wife‟s application had no
merit, proceeded to summarily dismiss it, in so doing commenting that it was “a text-book
case for the exercise of the summary dismissal power”.


At paragraph 106 of his judgment at first instance, Carmody J comments as follows:


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Family Law Property Essentials.               13                            Michael Emerson
                                                                          Emerson Family Law
[106]. The wife, in my opinion, is a woman who is desperately seeking to redress what
       she perceives as a wrong resulting from the 1994 property orders. She has a
       sincere but misplaced belief in the moral justice of her cause. She does not feel
       that she is being heard by the courts and has a genuine (but unjustified) sense of
       grievance with, what she regards as, a faulty legal system operated by
       exasperatingly inept people. She wants no more than her due. She has no ulterior
       motive or collateral purpose. In her mind justice (or her version of it) has failed her.
       She refuses to surrender in the face of mounting obstacles. Like Don Quixote, she
       will neither be deterred nor denied. She is, however, tilting at windmills and has to
       realise that the time has come to lay down her arms and for hostilities to cease.


Having dismissed the wife‟s application, his Honour then went further and restrained the
wife from commencing any further property proceedings without leave of the court.


The Full Court looked at the principles applicable to the issue of bias including the
majority judgment in Johnson v Johnson (2000) 201 CLR 488, where the High Court said
the test was:


       “whether a fair-minded lay observer might reasonably apprehend that
       the judge might not bring an impartial and unprejudiced mind to the
       resolution of the question the judge is required to decide”.


The Court could not see any appellable error in Carmody J‟s judgment and dismissed the
appeal.


Admissibility of an unread Affidavit
Miller & Miller [2004] FamCA 1374


This involved an evidentiary ruling in the course of a property dispute between the parties.




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Family Law Property Essentials.               14                            Michael Emerson
                                                                          Emerson Family Law
The wife‟s mother swore an affidavit in support of the wife‟s case but was unavailable for
cross-examination because of illness.


The affidavit was read in part apart from one particular paragraph which the wife‟s
counsel did not seek to adduce as part of the evidence. Counsel for the husband, on the
other hand, sought to tender that paragraph.


In refusing the application, Rowlands J held that a party who files an affidavit is not
obliged to read it and cited Leaders Shoes (1967) 86 weekly notes, part 1 New South
Wales 388 where it was stated “that an Affidavit made by a person who is not a party
which has not been read in the case of the party who filed it, cannot be tendered against
the party”.


Furthermore, in the particular circumstances applying, his Honour did not consider that
justice required that the relevant paragraph 17 be before the court to qualify other matters
in the Affidavit which are presently part of the evidence.


Threshold Test for Spousal Maintenance
McCrossen and McCrossen [2006] FamCA 868


This matter involved proceedings for property settlement and spousal maintenance. The
parties had cohabited for about 13 years with two children aged 9 and 6 respectively. The
husband had held senior positions in the public service but was on sick leave at the date
of trial. The wife had not been in paid employment outside the home since 1996 but had
obtained a university qualification in 1991 and had some previous work experience in the
public service. She stated in her Affidavit that she intended to use the time when she was
not working to obtain a teaching qualification. The husband produced expert evidence
from a recruitment consultant suggesting the wife could get a job in the public service at a
salary higher than she would receive after retraining as a teacher.




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Family Law Property Essentials.              15                           Michael Emerson
                                                                        Emerson Family Law
The trial judge held that the wife had not overcome the threshold test under s.72. He was
not satisfied that she was unable to maintain herself.


In dismissing the appeal on the spousal maintenance issue the full court held that the trial
judge was obliged to consider:


   a) Whether employment was available to the wife having regard to the practical
       realities of her age, experience and confidence having been out of the workforce
       for a number of years; and


   b) If so, the level of income the applicant might earn from such employment and
       whether in the circumstances of this case such income fell below adequate support
       and thus met the requirements of s.72.


The court held that s.72 requires that a party establish that they are unable to support
themselves, not that they are unable to support themselves in a particular area of
endeavour as opposed to another, which may be available to them. “In this case the
wife‟s own evidence enabled his Honour to conclude that she had not sought and did not
want the kind of work that she had done previously albeit that such work may have been
available to her with a relatively short period of training”.


The court on appeal did however consider that the trial judge had failed to make a
sufficient adjustment to the wife under s.75(2) and allowed the appeal on this aspect, re-
exercising the discretion to give her a 15% adjustment in place of the 10% adjustment
allowed by the trial judge.


Injunctions to restrain disposal of property
Mullen and De Bry [2006] FamCA 1380


While property proceedings were pending, the husband became aware that the wife had
placed the former matrimonial home (transferred to her post-separation) for sale. The

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husband sought an interim injunction that the wife retain an amount of not less than
$200,000 from the sale and invest that amount pending the finalisation of the property
settlement. The husband sought such an order primarily on the basis that the wife was
located overseas and that any property settlement order in his favour could be defeated
by the wife disposing of the sale proceeds offshore. The Federal Magistrate relied on the
Full Court decision of Waugh (2000) FLC 93-052 to dismiss the husband‟s application on
the basis that there was no evidence on the wife‟s part of a scheme to defeat judgment by
asset disposition.


In the instant case the husband on noticing an internet advertisement for the sale of the
property had instructed his solicitors to seek an undertaking from the wife to retain
$200,000 but such undertaking was not forthcoming.


The Federal Magistrate did not consider the failure to give an undertaking sufficient,
without more, to warrant a finding “that the failure demonstrates a real risk of asset
dissipation, or a scheme to defeat judgment by asset dissipation”.


On appeal the court in allowing the appeal did “not consider that the Full Court in Waugh
intended to prescribe as a “fundamental” or “threshold” question whether a scheme to
defeat judgment exists, to be answered in the affirmative on the balance of probabilities in
every case, before an order preserving property is made”.


The court held that “nowhere in Waugh did the court indicate that it was conscious of
making “new” law, or formulating “new” guidelines, nor was there any discussion of earlier
Family Court decisions in terms that indicated departure from them, or even development
of them”.


The court said they did not think that Waugh properly understood, lays down any incorrect
principles.




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Further that in addressing the question of whether there is a risk of disposal of assets to
defeat an order the court is not saying that it is unnecessary to enquire whether there is
any evidence of an intention, plan or scheme to dispose of assets but that in an enquiry
into the risk of disposal, the question of intention or scheme is but one of a number of
factors relevant to the objective risk of disposition to defeat an order.


In the courts view the Federal Magistrate had erred in principle and consequently failed to
consider all relevant factors.


In relation to the failure of the wife to proffer an undertaking or consent to the retention of
funds the court said that while these of themselves might not constitute proof of a
scheme, “the absence of response, given relevant opportunity, may well be relevant to
the degree of risk”.


The court held there was a real risk of the sale proceeds being taken out of the
jurisdiction and little or no detriment to the wife if the injunction were granted.


Binding Financial Agreements


Section 90G of the Family Law Act sets out the requirements necessary for a Binding
Financial Agreement.


Different approaches have emerged in relation to interpretation of s.90G and particularly
the degree of stringency with which the requirements for a Binding Financial Agreement
set out in s.90G(1)(b) of the Act are applied.


Two recent cases highlight the differences in interpretation.


J & J [2006] FamCa 442




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Family Law Property Essentials.                18                             Michael Emerson
                                                                            Emerson Family Law
In this case, Collier J had to determine whether a document described as a „Binding
Financial Agreement‟ was in fact binding.


The wife sought to enforce the agreement as though it were an order of the court. The
husband sought dismissal of the wife‟s application for enforcement.


It was asserted for the husband that the agreement sought to be enforced by the wife had
two deficiencies, firstly that it did not contain a statement in the Agreement to the effect
that the party to whom the statement related had been provided with the requisite
independent legal advice and secondly the Certificate annexed to the Agreement
contained incorrect wording.


His Honour considered that the words „if and only if‟ in s.90G(1) are words of real
significance and import a requirement for a level of compliance, if the agreement is to be
binding, that is clearly a standard or level above and beyond what might be described as
substantial compliance.


Furthermore “something approaching full compliance, or something that if looked at in a
less than strict light, might come close to establishing compliance, is not enough”.


His Honour took the view that full compliance was necessary and that any failure to
comply deprived the Agreement of being binding upon the parties.


Accordingly in this case the matter would now proceed as a Section 79 Property
Application rather than enforcement of a Binding Financial Agreement.


Black and Black [2006] FamCA 972.


His Honour Justice Benjamin took a different approach in Black and Black [2006] FamCA
972.


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                                                                        Emerson Family Law
The case involved an application by the husband for orders that a Binding Financial
Agreement entered into between himself and the wife be declared void for non
compliance with s.90 G of the Family Law Act or if not void, that the Agreement ought to
be set aside under s.90 K of the Act. The husband then sought consequential orders for
adjustment of property under the Act. The wife sought dismissal of the husband‟s
application.


The husband submitted that the Financial Agreement is void or should be set aside
because the legislative basis of Financial Agreements under part VIIIA should be
construed strictly because they are unique, in that, if binding, they exclude courts from
exercising powers under part VIII of the Act.


Counsel for the husband submitted the Agreement was not binding and therefore void,
because the provisions of s.90G(1) had not been complied with in two areas. Firstly that it
was not properly certified as there was a change to the terms of the Agreement after a
Certificate was given, by the husband‟s then solicitor and that under ss.90G(1)(b) there
needed to be a new Certificate. Secondly, the sub-section required that the Certificate
needed to be annexed to the Agreement and in addition a statement to the effect required
by ss.90G(1)(b) needed to be included in the body of the Agreement.


There were other grounds relied on by the husband including one that circumstances had
arisen since the Agreement was made that made it impracticable for the Agreement or
part of the Agreement to be carried out.


His Honour Justice Benjamin did not agree with the husband‟s submission that with such
agreements there should be strict compliance with the statutory regime and that such
agreements should be treated differently and the general principle that parties are
generally bound by their agreements, should not apply.




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Family Law Property Essentials.                 20                       Michael Emerson
                                                                       Emerson Family Law
His Honour considered that strict interpretation takes away the legislative meaning and
preferred the purposive approach whereby legislative enactments are construed to give
effect to their purpose.


His Honour noted that the intention of part VIIIA was to enable ordinary people to enter
into Financial Agreements which will deal with property and spousal maintenance and
avoid the necessity of court proceeding and if courts require strict interpretation of the
legislation, then this would have the effect of making such agreements less available to
the broader community. Further that courts “should not make the legal practitioner and
the parties cross all of the “t‟s” and dot all of the “i‟s” to enter into and give effect to
Financial Agreements”. His Honour concluded that “the Act does not create a regime of
strict compliance and there is a requirement on courts to give purpose to legislation.


As to the submission by the husband that not only must the Certificate be annexed to the
Agreement but that the Agreement must also contain a statement to the effect of s.90
G(1)(b), his Honour considered that adopting a purposive construction approach “there
seems to be no reason why the statement contained in the Certificate is not contained
within the agreement. The Certificate is annexed to the Agreement and forms part of it”
and in His Honour‟s view is thus “contained within the Agreement” within the meaning of
s.90 G(1)(b).


In relation to the submission that the amendment to the terms of the agreement was
made after the Certificate had been signed means that the agreement is not binding, his
Honour was satisfied that the independent legal advice provided by the legal practitioner
“included the whole of paragraph 17 including the provision which was subsequently
removed”. In other words the amendment was within the scope of the legal advice
provided to the husband and accordingly there “was no need to provide a new Certificate
as the existing document was adequate”.


His Honour considered that the agreement was binding having met the requirements of
s.90 G of the Act.

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Family Law Property Essentials.              21                           Michael Emerson
                                                                        Emerson Family Law
His Honour went on to reject further submissions of the husband including ones of
duress, unconscionability, impracticability and others and dismissed the husband‟s
application.


Note
The decision of his Honour Justice Benjamin in Black and Black was subsequently
appealed and the appeal heard by the Full Court and judgment reserved on the approach
of his Honour to the Binding Financial Agreement. The Full Court‟s decision and reasons
may be available by the time this paper is delivered.


Interlocutory Relief Against Third Party
Knight v Alesi and Anor [2007] FamCA 156


This case involved an application for urgent ex parte relief under the Part VIIIAA
provisions of the Family Law Act which came before Her Honour Bryant CJ sitting at first
instance in the Melbourne Registry on 14 February 2007.


The matter involved the husband seeking to join the wife‟s mother to the proceedings in
circumstances where at the Case Assessment Conference the wife conceded that she
had transferred the proceeds of sale of the matrimonial home which was owned jointly by
the parties to her mother who had then transferred the money to Greece.


Apart from seeking to join the grandmother, the husband sought orders for the return of
the money and to caveat property owned by the wife‟s mother. Her Honour declined leave
to lodge a caveat but instead treated that as an application for an injunction under section
114 to restrain the wife‟s mother from dealing with her interest in the property in her name
until further order.


The Chief Justice found that Part VIIIAA provided that the court could make orders or
injunctions under s.114 of the Act which bind the third party.

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Family Law Property Essentials.              22                           Michael Emerson
                                                                        Emerson Family Law
Christie v Christie and Others [2007] FamCA 125


This case which came before Cronin J at first instance in the Melbourne Registry in
January 2007 provides an interesting analysis of the operation of Part VIIIAA.


The wife issued proceedings seeking both parenting and financial orders including an
order that the husband be wholly responsible for and indemnify the wife in relation to all
monies owing, if any, to the husband‟s brother. The husband in his response sought
dismissal of the wife‟s Application and division of the matrimonial assets on a just and
equitable basis.


Later the wife filed an Amended Application naming the husband‟s brother as second
respondent.


The husband then joined the wife‟s parents as the third and fourth respondents seeking
an order that the wife assign to the husband her right to sue her parents for funds
advanced to them and other members of the wife‟s family from the matrimonial asset
pool.


Corporate entities which the wife alleged were controlled by the husband‟s brother were
joined as fifth, sixth and seventh respondent.


His Honour Cronin J noted that what was unfolding was “an internecine war between two
families over money that at various points was (or was not) running through the hands of
the husband and wife.”


What followed then was that firstly the fifth respondent and then the second, sixth and
seventh respondents issued writs out of the Supreme Court of Victoria naming the
husband and wife as defendants.


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Family Law Property Essentials.              23                           Michael Emerson
                                                                        Emerson Family Law
The wife then filed another amended application effectively seeking an order that neither
the husband nor the wife owe any monies to the second, third, fifth, sixth and seventh
named respondents or any related entities as claimed in the respective Supreme Court
proceedings or otherwise. The wife also sought injunctive relief.


Counsel for the four respondents who had brought the Supreme Court proceedings
argued that it was his clients‟ right to proceed as citizens in their court of choice and that
the Family Court had no power under Part VIIIAA to interfere with the workings of the
Supreme Court.


His Honour looked at the authorities as to whether the court had power to grant an anti-
suit injunction to interfere with a person taking out a proceeding in another court and is
worthwhile reading on that aspect alone.


Ultimately his honour did not have to find on this issue because it was not argued, the
wife instead chose to proceed to seek the requisite injunctions under Part VIIIAA of the
Family Law Act.


Cronin J then undertook an analysis of the requirements under Part VIIIAA. His Honour
considered that in the circumstances of the case it was reasonably necessary “to make
the order because without the order the property proceedings between the husband and
the wife would be effectively thwarted. He formed the view that it would be more
convenient for all issues to be determined in the Family Court and the respondents would
not be prejudiced.


In reaching his decision Cronin J supported the findings of O‟Ryan J in H & H & Others
Unreported [2006] FamCA 167, that Part VIIIAA was a valid law of the Commonwealth
and considered that the literal reading of Part VIIIAA “makes it clear that its reach is
extremely wide”.




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Family Law Property Essentials.               24                             Michael Emerson
                                                                           Emerson Family Law
In a paper entitled “Lots of Third Parties or just a few Gatherings” delivered on the Gold
Coast in July 2007, Accredited Family Law Specialist Paul Fildes refers to the reluctance
of practitioners to use the provisions and their extreme wariness about seeking to join
third party financial institutions amid concern about “adverse cost consequences of taking
on external financial institutions with deep pockets”.


Registrar’s Decision on Taxation of Costs – Whether Necessary for Registrar to
Give Reasons
Brott and Abeles (2007) FLC 93-310


The Trial Judge, in reviewing a Registrar‟s decision on an assessment of costs, found no
error in the Registrar‟s decision.


The solicitor argued that the trial judge had not followed appropriate appellate principles
in reaching her decision in that it was not open to Her Honour to conclude there was no
error of principle by the Registrar because the Registrar had failed to provide adequate
reasons for disallowing amounts claimed in the solicitor‟s bill.


In partly allowing the appeal, the court held that assessment of a bill by the Registrar was
an administrative rather than a judicial function and that there was no legal or statutory
requirement for a registrar, acting as an assessing officer, to give reasons.


The case sets out the relevant law to be applied in respect of review of decisions of taxing
officers and, while concluding that there is no legal or statutory requirement for the
registrar to give reasons, states that, from a practical point of view, a Judge reviewing the
Registrar‟s administrative decision would be assisted by brief reasons, sufficient to
identify the basis of the registrar‟s decision about disputed items, and says that an
amendment to the rule to so provide appears necessary.


Other Current Issues


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Family Law Property Essentials.               25                           Michael Emerson
                                                                         Emerson Family Law
Family Law Amendment Rules
The Family Law Amendment Rules 2007 (No 1) commenced on 7 July 2007.


Included in the changes introduced by the amendments is one to provide that within 14
days of a costs assessment order, a party may request a registrar to provide reasons for
a decision about a disputed item. This addresses the concerns of the Full Court in Brott
and Abeles above.


A further change introduced by the amendment rules enables parties to confer with a
single expert witness to clarify the expert report. The parties must agree to convene a
conference with the expert and agree on arrangements and the expert advised in writing
and the experts fees secured. Other significant changes have been introduced including
the removal of the mandatory use of a proforma affidavit in interim applications for a
parenting order and amendments to cater for the new child support reforms.


A new FCA practice direction
The Chief Justice has recently issued Practice Direction 1 of 2007 which revokes certain
National Practice Directions and some Local Practice Directions and notes pertinent to
particular registries. Included in those revoked is a Practice Direction of June 1995 setting
out guidelines relating to the conduct of proceedings in the Duty List including the two (2)
hour rule.


Melbourne Arbitration Project
A significant program is underway in Melbourne whereby the Family Law Section of the
Law Council in conjunction with the Australian Institute of Family Law Arbitrations and
Mediations has developed an arbitration model to assist the court to clear the backlog of
cases. More than 60 qualified arbitrators have agreed to conduct arbitrations on a fixed
fee basis with awards to be produced within 28 days of the conclusion of the Arbitration
Hearing.




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Family Law Property Essentials.              26                            Michael Emerson
                                                                         Emerson Family Law
M J Emerson
Accredited Family Law Specialist
Emerson Family Law
12 November 2007




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Family Law Property Essentials.          27                          Michael Emerson
                                                                   Emerson Family Law

								
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