In the Marriage of Smith [1986] HCA 36

[1986] HCA 36

High Court of Australia|1983-11-18|Before: Dawson JJ, Nygh J

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Court

High Court of Australia

Decision date

1983-11-18

Before

Dawson JJ, Nygh J

Source

Original judgment source is linked above.

Judgment (156 paragraphs)

[1]

These proceedings arose in the Family Court. The parties to the proceedings in that Court had been husband and wife, but the marriage was dissolved by a decree made on 13 January 1983. Subsequently, the parties reached agreement concerning the division of their property and embodied that agreement in a deed dated 18 November 1983, which was a "maintenance agreement" within the definition contained in s. 4 of the Family Law Act 1975 Cth, as amended. The deed, which was expressed to be binding on the heirs, executors, administrators and assigns of each party (cl. 1) provided that on payment by the wife to the husband of $10,000 the husband would transfer to the wife the whole of his right, title and interest in a property at Taren Point which the parties held as joint tenants: cll. 2-4. By cl. 5 the parties agreed that the agreement contained in the deed related to the whole of the financial matters between them and was intended to operate in relation to such financial matters in substitution for any rights of either of the parties under Pt VIII of the Family Law Act. Clause 7 of the deed was in the following terms:

[2]

(a) Each of the parties hereby releases and forever quits claim to the other party and the whole of his or her estate and notional estate from and against all rights, if any, by or on behalf of that party to make any application or claim under or pursuant to the Family Provision Act 1982 of the State of New South Wales and any Act of the State of New South Wales or elsewhere replacing or amending the same or making like or similar provisions or giving like or similar rights to those under that Act and hereby indemnifies and covenants forever to keep indemnified the other party and his or her estate and notional estate from and against all such applications and claims.

[89]

It is apparent that the Family Law Act and the Family Provision Act are not inconsistent in the way described by Isaacs J. in Clyde Engineering Co. Ltd. v. Cowburn [1] - i.e., the State legislation does not enter upon a field which the Commonwealth legislation has evinced an intention wholly to cover. The nature of that test of inconsistency has recently been discussed in Viskauskas v. Niland [2] , and it was there pointed out that it may sometimes be difficult to ascertain the precise limits of the field which the Commonwealth legislation reveals an intention to cover. The extent of the relevant field in the present case can more easily be revealed by description than by definition. The Family Law Act, so far as material for present purposes, deals with the provision of maintenance for a party to a marriage, the determination of property rights in proceedings between the parties to a marriage and the variation of the interests of either or both parties to a marriage in the property of either or both of them. Although a party to a marriage is defined by s. 4(2) of the Family Law Act to include a reference to a person who was a party to a marriage that has been dissolved, annulled or terminated by death, it appears quite clearly from the provisions of Pt VIII that no order for maintenance may be made against the personal representative of a deceased person who, while alive, was a party to a marriage and that, with the exceptions about to be mentioned, no order for the variation of property rights may be made against the personal representative of any such deceased person. Those exceptions are provided by s. 79(8), which enables proceedings with respect to the property of the parties to a marriage or either of them which were pending at the death of a party to be continued by or against the personal representative of the deceased party and, subject to the conditions in s. 79(8)(b), for an order to be made with respect to the property, and by s. 79A(1C) which makes similar provision with regard to pending proceedings to set aside or vary an order made under s. 79. The Part does make provision for the enforcement, against the estate of a deceased party, of an order varying property rights (s. 79(1A)) or varying an order made under s. 79 (s. 79A(1B)) and, subject to exceptions, for the continued operation, after the death of a party, of a maintenance agreement registered under s. 86 (s. 86(3A)) or approved under s. 87: s. 87(10). Maintenance orders made after 25 November 1983, on the other hand, cease to have effect on the death of the person liable to make payments under an order (s. 82(3)), although orders made before that date continue in force against the personal representative of the deceased party if expressed to continue in force throughout the life of the person for whose benefit the order was made or for a period that had not expired at the time of the death of the person liable to make payments under the order: s. 82(3). If no order has been made, and no proceedings were pending at the time of the death of a party to a marriage, nothing in Pt VIII enables proceedings of any kind respecting maintenance or property to be brought against the personal representative of a deceased party to a marriage.

[92]

In Johnston v. Krakowski [3] this Court held that there was no inconsistency between the provisions of the Matrimonial Causes Act 1959 Cth and Pt IV of the Administration and Probate Act 1958 Vict. There are dissimilarities between those statutes and the Acts now in question, although they are not in our opinion material for present purposes. Certainly it is as true in this case as it was in that to say that the Commonwealth Act and the State Act deal with "entirely different problems": see Johnston v. Krakowski [4] . The former deals with the adjustment of rights to property and maintenance on the breakdown of a marriage; the latter enables persons (including former spouses) regarded as having a moral claim against a testator or an intestate to enforce that claim against his estate after his death. The situation with which the State Act is concerned arises at a different time, and in different circumstances, from those with which Pt VIII of the Commonwealth Act deals, and the respective criteria provided by the State and the Commonwealth Acts for the grant of relief are different. Ultimately the question is whether the Parliament, in enacting the Family Law Act, revealed an intent "completely, exhaustively or exclusively" to state the law regarding claims by a surviving spouse (whether divorced or not) against the estate of a deceased spouse: cf. Johnston v. Krakowski [5] . It is clear that it did not, because under the Family Law Act proceedings may be taken against the personal representative of a deceased spouse with respect to the property of that spouse only to enforce an existing order or an approved maintenance agreement or to continue proceedings already commenced, and, except in relation to certain orders made before 25 November 1983, no proceedings at all may be taken with respect to an order for payment of periodic sums by way of maintenance. At the time when the Family Law Act was passed, legislation providing for testators' family maintenance was a familiar feature of the law in every State and Territory. It is quite impossible to suppose that the Parliament, in enacting the Family Law Act, intended to deprive a spouse of the right to make application under that legislation for provision out of the estate of the deceased spouse, when the Family Law Act did not at the same time allow any application for maintenance to be made by the surviving spouse and an application with respect to property could be made only if proceedings had been commenced before the death had occurred. Counsel for the wife was driven to contend that the field covered by the Commonwealth law was that which related to financial provision for one party to a marriage when proceedings had been commenced under s. 79 of the Family Law Act or an agreement had been approved under s. 87 of that Act, during the lives of both parties. There is nothing in the provisions of Pt VIII to suggest that the Parliament intended exclusively to cover a field so arbitrarily defined, and the very description of the field in that way indicates that the Family Law Act reveals no intention to express exhaustively what the law should be governing the provision of maintenance or other benefits for one spouse out of the deceased estate of the other spouse. Some reliance was placed in argument on s. 81 of the Family Law Act; however, although that section requires that some orders under Pt VIII should finally determine the financial relationships between the parties to a marriage inter vivos and avoid further proceedings between them, it reveals no intention to prevent or inhibit proceedings by a spouse against the personal representative of a deceased spouse. Indeed, the very scope and object of the Family Law Act suggests that it was not intended that all disputes between spouses regarding matters affecting their property should be dealt with under Pt VIII. For example, a claim by one spouse against another for contribution as a joint tortfeasor, or an application to approve the settlement of an action by a spouse who was an infant, would not fall within the scope of the Family Law Act. However, it is unnecessary to pursue that aspect of the matter, since for the reasons given there is no general inconsistency between the Family Law Act and the Family Provision Act.

[94]

Further, there is no direct inconsistency or actual contrariety between the two statutes, at least in so far as they apply to the present case. It is possible to imagine a case in which property which had been the subject of an order made under the Family Law Act in favour of one spouse might, after the death of the other spouse, be liable, under the Family Provision Act, to be treated as part of the notional estate of the deceased, so that provision might be made out of that property in favour of some other eligible person, e.g., a person with whom the deceased had been living. In such a case a direct inconsistency might arise. However, it is unnecessary to consider that question, for it does not arise in the present case. The Family Law Act says nothing as to applications of the kind mentioned in s. 31 of the Family Provision Act. Neither the making nor the refusal of an order approving of a release by a party to a marriage of his or her rights to make an application for provision out of the estate of the other party to the marriage after the death of that party would "alter, impair or detract from the operation of" the Family Law Act, to use the words of Dixon J. in Victoria v. The Commonwealth [6] . If the Supreme Court approved of the release, no application for provision out of the estate could be made and obviously no order which had been made under Pt VIII with respect to the maintenance or property of either party could be affected. If the Supreme Court refused to approve of the release, the only consequence would be that a potential barrier to the making of an application for provision out of the estate of the other spouse, after his or her death, would be removed. The position then would be exactly the same as if s. 31 did not appear in the Family Provision Act, for a line of cases, including, in this Court, Lieberman v. Morris [7] , would support the view that in the absence of statutory authority an attempt to contract out of the benefits of the Family Provision Act would be ineffective. The fact that an order made thereafter under s. 7 of the Family Provision Act for provision out of the estate of the deceased spouse might possibly, in some circumstances, affect the operation of an order previously made under the Family Law Act means that an inconsistency might arise between those two orders, but does not mean that there is any direct inconsistency between s. 31 of the Family Provision Act and any provision of the Family Law Act.

[96]

The fact that the deed, which contains, in cl. 7(a), what purports to be a release by each party of his or her rights to make any application under the Family Provision Act for provision out of the other's estate, has been approved under s. 87 of the Family Law Act, does not create any inconsistency with s. 31 of the Family Provision Act. The effect of an approval under s. 87 is very limited. By s. 87(4) certain orders made under the Family Law Act, or under the Act which it repealed, will cease to have effect in so far as they relate to financial matters dealt with in the approved agreement and, subject to certain exceptions, the approval of the agreement will prevent any court having jurisdiction under the Act from making any order with respect to those financial matters. Thus, s. 87(4) gives the approved agreement no effect relevant to s. 31 of the Family Provision Act. Nor does s. 87(5) give the approved agreement any relevant effect. That sub-section, when read together with s. 87(1), has the effect that notwithstanding any rule of law or equity, an approved maintenance agreement shall not be taken to be void, voidable or unenforceable by reason that it makes provision that it shall operate, in relation to the financial matters dealt with in the agreement, in substitution for any rights of the parties to the agreement under Pt VIII. Section 87(5) was no doubt intended to prevent the deed from being held to be void as contrary to public policy, in accordance with the principle applied in such decisions as Hyman v. Hyman [8] and Brooks v. Burns Philp Trustee Co. Ltd. [9] . It is unnecessary to consider whether, having regard to s. 87(3), the provisions of s. 87(5) were necessary or whether they were inserted merely out of an abundance of caution. However, when s. 87(5) is read in the context provided by s. 87(1) it is apparent that it was not intended to deal with any question which arises under s. 31 of the Family Provision Act. An agreement is protected from being rendered void, voidable or unenforceable by reason of the circumstance to which s. 87(5) specifically refers. It is not protected from being or becoming invalid, unenforceable or ineffective for some other reason. If s. 31(2) of the Family Provision Act renders an agreement ineffective, s. 87(5) does not render it effective. The provisions of s. 87(11) carry the matter no further. Under that sub-section the validity, enforceability and effect of an approved maintenance agreement is to be determined according to the principles of law and equity that are applicable in determining the validity, enforceability and effect of contracts and purported contracts. However, if the ordinary law (which in New South Wales includes s. 31 of the Family Provision Act) is applied, the provisions of cl. 7(a) will be ineffective unless they have been approved by the Supreme Court under s. 31. For these reasons, the release contained in cl. 7(a) of the deed did not become effective when the maintenance agreement embodied in the deed was approved by the Family Court.

[97]

The next question is whether the Family Court itself has jurisdiction to exercise the power of approval given by s. 31 of the Family Provision Act to the Supreme Court of New South Wales. The Solicitor-General for the Commonwealth, and counsel for the wife, in contending for an affirmative answer to that question, submitted that an application by one spouse for approval of the release of his or her rights to make an application under the Family Provision Act in relation to the estate of a deceased person is part of the same matter as the application to the Family Court for approval of a maintenance agreement containing such a release. The foundation of the argument is the proposition that when jurisdiction is conferred on a federal court in a matter within the meaning of s. 75 or s. 76 of the Constitution, the court has jurisdiction to determine all the questions which form part of the matter, including questions which in themselves are not federal questions, i.e. not questions which would answer one or other of the descriptions contained in s. 75 or s. 76. Quite clearly, under the Constitution, the jurisdiction conferred on a federal court cannot be wider than the matters mentioned in s. 75 and s. 76. However, the view that has been accepted by the majority of the court in a line of cases commencing with Philip Morris Inc. v. Adam P. Brown Male Fashions Pty. Ltd. [10] is that the grant of jurisdiction to determine a matter carries with it jurisdiction to determine the whole matter, and that "a "matter" is a justiciable controversy which must either be constituted by or must include a claim arising under a federal law but which may also include another cause of action arising under another law, provided it is attached to and is not severable from the former claim": Fencott v. Muller [11] . In Stack v. Coast Securities (No. 9) Pty. Ltd. [12] , Mason, Brennan and Deane JJ. affirmed the view that the Constitution gave power to the Parliament "to give authority to federal courts to decide the whole of a single justiciable controversy of which a federal issue forms an integral part". For present purposes, these propositions may be accepted as being correct.

[101]

Since the application for approval under s. 31 does not arise under the Family Law Act, it is unnecessary to decide whether if it did it would be in respect of a matrimonial cause as defined in s. 4(1). That definition has been amended since it was held in Perlman v. Perlman [13] that a proceeding to enforce a maintenance agreement approved by the Court was not a matrimonial cause - such a proceeding will now fall within par. (ea) of the definition in s. 4(1). However, the present proceedings are not proceedings for the enforcement of the maintenance agreement. Further, in our opinion, they are not proceedings "in relation to" the maintenance agreement within the meaning of the definition. The deed does not contain any agreement to request the Family Court to grant approval under s. 31. On the contrary, the parties agreed to join in and support any application seeking such approval from the Supreme Court. No doubt some connexion can be discerned between the agreement and the present proceedings, but the fact that a topic is dealt with in a maintenance agreement does not mean that proceedings in relation to that topic will be proceedings in relation to the maintenance agreement. A maintenance agreement must make provision with respect to financial matters, but may make provision with respect to other matters, and the fact that it does so does not necessarily mean that proceedings in relation to those other matters will be proceedings in relation to the maintenance agreement. Some examples may be given. If a maintenance agreement provided that it would operate of its own force as a conveyance, and was to be registered as a transfer of the land mentioned in it, the Family Court would not have jurisdiction to entertain proceedings seeking an order that the agreement be registered under State legislation relating to the registration of title. If one spouse owned premises subject to a liquor licence, or had an interest in leasehold that could be assigned only with the consent of the lessor, and the maintenance agreement provided that the premises and the licence should be transferred, or that the leasehold should be assigned, to the other spouse, the Family Court would have no jurisdiction to entertain proceedings seeking approval of the transfer of the liquor licence or seeking an order that the lessor should consent to the assignment of the lease or that the Court should give consent in his stead. The relationship between proceedings of this kind and the maintenance agreement would be too tenuous to bring the proceedings within par. (ea) of the definition. Similarly, the relationship between the maintenance agreement and the proceedings for approval of the release for the purposes of s. 31 of the Family Provision Act was not sufficiently close to bring the proceedings within the description of "proceedings in relation to a maintenance agreement". In determining the effect of particular words in the Family Law Act which give jurisdiction to the Family Court, it is necessary to have regard to the subject-matter and object of that Act and to the context which it provides. Thus, it has been held that wide general words in the Family Law Act do not give the Family Court jurisdiction or power to order the appointment of a receiver of the assets of a partnership of which the parties to the marriage were members (see Reg. v. Ross-Jones; Ex parte Beaumont [14] ) or to entertain proceedings for the issue of a writ of fieri facias to enforce a judgment of a Supreme Court, or bankruptcy proceedings against a husband or a wife: see Reg. v. Ross-Jones; Ex parte Green [15] . For these reasons the application for approval under s. 31 does not come within par. (ea) of the definition; even more clearly it is not within any other paragraph of the definition.

[155]

The Supreme Court of each State is invested with federal jurisdiction, by s. 39(5) of the Family Law Act, with respect to matters arising under the Act in respect of which any of pars. (a) to (e) of that sub-section apply. However, s. 40(3) empowers the Governor-General to end the jurisdiction of a Supreme Court by making a proclamation fixing a date on and after which proceedings referred to in s. 39(5) may not be instituted in or transferred to that Court. Such a proclamation has been made in relation to the Supreme Court of New South Wales, fixing 25 November 1983 as the date on which the jurisdiction of that Court was terminated in all proceedings under s. 39(5)(a)-(e): see Commonwealth of Australia Gazette No. S288, 24 November 1983. The combined effect of s. 39(5), s. 40(3) and the proclamation is to exclude the jurisdiction of the Supreme Court to approve the release only if it be shown that the Act (1) conferred such jurisdiction on the Supreme Court and (2) then terminated that jurisdiction by virtue of the proclamation. An examination of the terms of the legislation shows that the first proposition is not made out. Section 39(5) of the Act confers jurisdiction on the Supreme Court only "with respect to matters arising under this Act". However an application for approval of a release under s. 31 of the Family Provision Act is not a "matter" arising under the Family Law Act. Clearly it is a matter arising under the State Act, and the fact that the Family Court may, under the Commonwealth Act, approve a maintenance agreement which includes releases in respect of claims under the State Act does not lead to the conclusion that an application for approval of a release, as contemplated by the State Act, is a matter arising under the Commonwealth Act, when the different criteria involved in each approval are properly borne in mind. Although the provisions of the Family Law Act relating to the jurisdiction of the Family Court and of the State Supreme Courts do not appear to have been thought through, it is inconceivable that Parliament intended to exclude from the Supreme Court of a State the jurisdiction to entertain an application arising under State law for approval of a release.