Brooks v Burns Philp Trustee Co Ltd

[1969] HCA 4

High Court of Australia|1969-03-05|Before: Owen JJ, Kitto J

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Court

High Court of Australia

Decision date

1969-03-05

Before

Owen JJ, Kitto J

Source

Original judgment source is linked above.

Judgment (53 paragraphs)

[1]

For the reasons I have given I would not be prepared to accept all that it was urged flows from the judgments in Bennett v. Bennett [2] . I realize, however, that the decision has been accepted without question in later cases in England and here; and members of this Court, other than I, think that it should be followed. I shall assume therefore, for the purposes of this case, that it should be followed by us for what, confined by its facts, it actually decides. I am not prepared to push it further than that. This case then differs from it in two important respects, which I shall deal with separately. The first is that there the wife was still able to pursue the remedy which the Act gave her and out of which she could not validly contract: here she is not. The second is that there the deed between the parties was not approved by the Divorce Court when it pronounced its decree for divorce: here it was.

[2]

As to the first matter. Even if an order could have been made in favour of the appellant against her husband in his lifetime for periodical payments to continue after his death - a very doubtful proposition: see Perpetual Trustee Co. (Ltd.) v. Alldritt [3] ; Sugden v. Sugden [4] ; Johnston v. Krakowski [5] ; cf. Tyson v. Tyson [6] - no such order was made; and s. 104 (2) of the Matrimonial Causes Act 1959-1965 Cth has no application. The appellant cannot now have any remedy in the divorce jurisdiction; and the respondents say she is now without remedy by action on her husband's covenant. The contrast with Bennett v. Bennett [1] is striking. There Denning L.J. began his judgment by saying [2] :

[16]

First it was said that Lord Denning's proposition, that the sanction of the Divorce Court would confer validity on an agreement, applied only when, using his Lordship's words, the parties had preserved the jurisdiction of the Court "by making their agreement subject to the sanction of the Court". In the case of a deed it was said this meant a delivery in escrow. That an instrument was delivered as an escrow can be inferred from circumstances: Bowker v. Burdekin [6] and other cases cited in Norton on Deeds, 2nd ed., p. 20; also In re Carile; Dakin v. Trustees Executors and Agency Co. Ltd. [1] . But I do not think that it can be inferred from the evidence in the present case that the deed was executed as an escrow - that is that its operation, either as a whole or as to any particular term, was from the outset intended by the parties to be conditional on the Divorce Court's approval. But it can, I think, be inferred that when the parties executed the deed, each in the presence of his or her solicitor, they, or at all events their advisers, understood that it was to be next day placed before the Divorce Court. The lawyers must have been conscious of the need to disclose it to rebut any suggestion of collusion. It was of special importance in this case that this be done, for a petition for judicial separation had been, by leave, amended to be a petition for dissolution of the marriage; and the cases of Doutrebande v. Doutrebande [2] , and Cohen v. Cohen [3] , stood as warnings. I have no doubt that the intention throughout was to place the deed before the Court; and I have no doubt that if the Court's approval of the deed was necessary to make it fully binding, and the parties knew of this, they would have wanted to obtain this approval. But I am unable to think that it was intended by them that the deed was to have no operation at all unless the Court approved it. It seems to me that they intended that it should operate according to its terms so far as the law allowed and according to events.

[20]

It is, of course, well established that the jurisdiction of the Court to award maintenance to a wife cannot be ousted by any private agreement between the parties: see Bennett v. Bennett [2] following Hyman v. Hyman [4] . Such an agreement is unenforceable against the wife as being contrary to public policy. But it is otherwise when the agreement is brought before the Court and an order of the Court is made giving effect to its terms. The making of an order would of course put the matter beyond doubt; but I do not think that the cases which deal with the need for the Court's approval or sanction require that this be made manifest by an order in the terms of the agreement. Moreover, again if the reasoning in Bennett v. Bennett [2] be accepted in its entirety, the Court can I think approve of an agreement as an instrument operative inter partes, although it might not be able itself to make an order in the same terms. That position arises when the agreement provides, as in this case, for payments to the wife to continue beyond the joint lives of the parties. I agree that cl. 3 of the deed was of no effect for it contemplated the Divorce Court making an order which it could not make. But an agreement to endure for the life of the wife and to bind the husband's executors is not inherently invalid: cf. Kirk v. Eustace [5] . And, notwithstanding criticisms in later cases, I am not persuaded that the decision of Roper J. in Perpetual Trustee Co. (Ltd.) v. Alldritt [6] , was mistaken in so far as his Honour held that the agreement between the parties, intended to endure for the lifetime of the wife, was enforceable against the husband's estate. That it could not be translated into an order of the Court does not mean that it was invalid as an agreement or that it could not have had the approval of the Court: cf. Tyson v. Tyson [7] . 1. [1962] P. 101, at pp. 118, 119. 2. [1952] 1 K.B. 249. 3. [1929] A.C. 601. 4. [1952] 1 K.B. 249. 5. [1937] A.C. 491. 6. (1942) 42 S.R. (N.S.W.) 246. 7. (1903) 4 S.R. (N.S.W.) 51.

[23]

Two questions emerge from this. They are important, not only for this case, but I imagine for other parties in other cases too. The first is whether the deed in this case was one which could have been approved under s. 39. Street J. held that it was not. I am of the same opinion, because it was not executed as a result of an order of the Court made after the inquiry which s. 39 (2) directed. I should, however, add that his Honour's other reason for putting it outside s. 39 - namely that it did not secure a "gross or annual sum" - is perhaps questionable. Surprising though it may seem, an amount calculated as a weekly amount and payable monthly can, it seems, be called an "annual sum": In re Janes' Settlement; Wasmuth v. Janes [2] . Moreover, apparently all annual, monthly and weekly payments are alike in being by the law of New South Wales regarded as accruing from day to day and apportionable accordingly: Conveyancing Act, 1920 N.S.W., s. 144. The second of the two questions which, as I have said, emerge at this point is whether the absence before 1958 of any express authority for the Court to sanction agreements, the Court's formal statement in this case that it had approved the deed was altogether nugatory. The decision of the Supreme Court of New South Wales in Whittle v. Whittle [1] , supported by the dicta in Shaw v. Shaw [2] , is certainly weighty; and it is with some hesitation that I have come to a different conclusion. I see no reason to disagree with the actual decision in Whittle v. Whittle [1] upon the facts of that case. Whatever effect the approval of the deed there had in the proceedings for judicial separation, it must I think have operated only while the parties remained married, though separated. I do not see how the approval of it in those proceedings could destroy the statutory rights which public policy assured to the wife in altogether different proceedings which occurred ten years later. But the case is important because the Full Court did not say that the approval was ineffective or spent. It held that it was not competent in 1955 for the Court (either by the judge or the Registrar) to have sanctioned or approved the agreement, there being no statutory authority for doing so. I am not satisfied that that is a correct view. The law says to a wife who is a party to divorce proceedings: You have rights which you cannot relinquish by agreement unless you get the approval of the Court in which you could assert them. It seems to me that whenever a compromise or settlement of a claim is valid in law, if it has the sanction of approval of the court having jurisdiction in the matter of such a claim, then that Court has inherent power to sanction or approve the compromise or settlement. Express statutory authority is not I think needed to enable it to do so.

[50]

it may well be that the objectionable clause in the deed would have been severable from the husband's promise; this may explain, if any explanation be needed other than the fact that the point was not under consideration, why some of their Lordships, particularly Lord Atkin, referred to the husband's promise in that case as being still alive. In the Court of Appeal Somervell L.J. made the same points. He pointed out [6] , and again [7] , that the question whether the wife's covenant "voided the whole deed" had not arisen for consideration and added that "the doctrine of severability being applicable might well have prevented the whole agreement from being regarded as void. The main subject of the agreement was the separation. The possibility of divorce was remote and seemed to depend on a change in the law. It might well, in these circumstances, be held to be subsidiary and "severable" ". Denning L.J. [1] , drew attention to the fact that the deed was a deed of separation and pointed out that in such case the substantial consideration for the promise by the husband might well be the agreement to live apart and that in these circumstances the husband's promise would be severable. That, his Lordship thought, was "implicit" in the speeches in Hyman's Case [2] . He went on to say [3] , that in the case of an agreement for the payment of alimony upon the dissolution of a marriage different considerations arose since if a promise by the wife to accept agreed payments in settlement of any claims she might have for alimony was void, that promise might well form the whole or substantially the whole of the consideration for the husband's promise to make the agreed payments and, in such case, "if her promise does not bind her, then his should not bind him". He went on [3] : If the parties do not oust the jurisdiction of the Divorce Court, but preserve it by making their agreement subject to the sanction of the Court, then, once it is sanctioned, it is valid. The Court, however, cannot and will not give its sanction before decree nisi. It has itself no jurisdiction before decree nisi to deal with permanent maintenance. Its jurisdiction only arises "on" the decree. Its sanction should, I think, be obtained in this way: if the parties agree on a figure for maintenance, the Court should be asked to make an order for that figure; if they agree on a secured provision, the Court should be asked to approve the deed which contains the provision. Counsel for the appellant placed some reliance upon this passage in support of a submission made by him that, assuming cll. 1 (b) and 2 to have been invalid when the deed was executed, the recital in the decree nisi that the deed had been approved had in some way had the effect of validating covenants which up to that time had been invalid. But what his Lordship said in the passage last quoted is not, in my opinion, to be read as meaning that the mere approval by the Court of an agreement for alimony made between husband and wife validates that which the law regards as invalid. I think that what his Lordship meant was that if an agreement for alimony was made by the parties subject to the approval of the Court, the Court, assuming that it had jurisdiction to do so, could, if it thought fit, make an order in terms of the agreement in which case it would be the order of the Court and not the terms of the agreement that would be binding and enforceable. This was the view of his Lordship's remarks which commended itself to the Full Supreme Court of New South Wales in Shaw v. Shaw [1] and Whittle v. Whittle [2] in which questions arose as to the effect of the Court "sanctioning" or "approving" an agreement for alimony or maintenance made between husband and wife which was void as purporting to oust the jurisdiction of the Court and I agree with their Honours. 1. [1951] 2 K.B. 572; [1952] 1 K.B. 249. 2. [1929] A.C. 601. 3. [1951] 2 K.B., at pp. 575, 576. 4. [1952] 1 K.B., at p. 251. 5. [1952] 1 K.B., at p. 259. 6. [1952] 1 K.B., at p. 261. 7. [1929] A.C. 601. 8. [1952] 1 K.B., at pp. 262, 263. 9. [1952] 1 K.B., at pp. 262, 263. 10. (1965) 66 S.R. (N.S.W.) 30. 11. (1965) 66 S.R. (N.S.W.) 141.