(v) The 3rd plaintiff accepted a
position as trustee of the G.K. and F. Liveris Foundation, a
unit trust, on the 18th December
1981 as evidenced by a
Deed of Trust dated the 18th December 1981.
(vi) The first and second
plaintiffs executed a Deed
dated the 15th January 1982
described as a "Maintenance Agreement", sections 4 and
86Family Law Act (Commonwealth)". The defendant
has at
all times denied and continues to deny that the
Agreement constitutes a maintenance agreement for the
purposes of
the Family Law Act.
(vii) The second plaintiff,
Florence Liveris, executed and affidavit verifying the said
agreement on
the 15th January 1982. The defendant only
admits that the affidavit was executed.
(viii) The first plaintiff, George
Kailis
Liveris, executed an affidavit verifying the said
agreement on the 15th January 1982. The defendant only
admits that the affidavit
was executed.
(ix) A Memorandum of
Transfer transferring Lots 1650, 1651 and 1654 to Liveris
Nominees Pty Limited pursuant
to the said Deed was
executed on the 15th January 1982. The defendant only
admits that the transfer was executed. The Deed
was
registered pursuant to section 86 on the 15th day of
January 1982.
(x) On the 29th January 1982,
the plaintiffs through
their solicitors, Messrs Waters
James and O'Neil forwarded the Memorandum of Transfer, a
sealed copy of the said Deed, a copy
of the affidavits
referred to in paragraphs (vii) and (viii) to the defendant
with a request that the documents be stamped
'exempt'
from stamp duty.
(xi) On the 19th February 1982 a letter was
received from the defendant advising the
plaintiff's
solicitors that the Memorandum of Transfer
would be stamped as a conveyance transfer under item
5(i) of the Stamp Duty Act at a value to be assessed by
the Valuer-General and that, in addition, the said Deed
called a Maintenance Agreement would be
stamped as a
Deed assessed at $5.00.
(xii) On the 5th May 1982 a Notice
of Assessment was received by the plaintiffs' solicitors
Messrs Waters James and O'Neil from the defendant
assessing the market value of the property to be
transferred at $535,000
as at the transfer date, and
assessing stamp duty on the said transfer to be $14,050-
00 and, in addition, on the said Deed
called a Maintenance
Agreement, at $5-50.
(xiii) On the 13th May 1982 by
letter written by Messrs Waters, James and O'Neil
to the
defendant, formal objection to the assessment of the
defendant was made setting out the basis of objection.
(xiv)
By letter dated 22nd April
1983 from the defendant to Messrs Waters James and O'Neil
disallowance of the objection was made.
(xv) The duty so assessed
was paid without prejudice to these proceedings.
B. Questions for determination by the Court
are:-
(i) Is the Deed of the 15th
January 1982 by the first and second plaintiffs a
maintenance agreement for the
purposes of the Family
Law Act and is the Memorandum of Transfer of the 15th
January 1982 an instrument executed for the purposes
of
such an agreement?
(ii) If yes, is section 90 of the
Family LawAct as in force on the 15 January 1982 valid in
its application to the stamp duty or other duties or
charges imposed on those documents under the law of the
Northern Territory
of Australia?
DATED this 31 day of March 1989."
2. It will be noted that Question B(ii) involves a matter arising under the
Constitution or involving its interpretation. I am assured that the
appropriate notices under s.78B of the Judiciary Act have been
sent to all
State Attornies-General and to the Federal Attorney-General and that none wish
to intervene. I therefore proceed with
the matter.
3. S.90, as in force at the time of the execution of the Deed referred to in
paragraph A (vi) of the Statement read
as follows:-
"SECTION 90 INSTRUMENTS NOT LIABLE TO DUTY
90 A maintenance agreement, or a deed or other
instrument executed
by a person for the purposes of such
an agreement or for the purposes of, or in accordance with
an order under, this Part,
is not subject to any duty or
charge under any law of a State or Territory or any law of
the Commonwealth that applies only
to or in relation to a
Territory."
4. The Deed referred to in paragraph A (vi) of the Statement is Exhibit A,
and is made between
the husband and wife. It recites that they were married
on 8 May 1948 and "desire to enter into this agreement to make provision
for
the various matters herein agreed to in consideration of their natural love
and affection for each other". It then sets out
the names and dates of birth
of the children of the marriage (c.f. paragraph A (iv) of the Statement) and
describes the property
of which the husband and wife are the registered
proprietors. See also paragraph (i) of the Statement which gives the
additional
information that they are proprietors as tenants in common and
equal shares. The Deed then continues:-
"NOW THEREFORE THIS AGREEMENT
WITNESSETH ASFOLLOWS:-
- The parties shall continue to live together in
mutual love and respect.
- The husband confirms
his
obligations to maintain the wife and the children in the
manner appropriate to their station in life and consonant
with
his love and affection for them.
- Both the husband and the wife shall
at all times have the joint custody, guardianship
and
control of such children still residing in the matrimonial
home.
- To make provision for the family,
the husband
and wife shall transfer the property to Liveris
Nominees Pty Ltd as trustees of the G.K. and F. Liveris
Foundation, and the
husband and wife shall execute a
Memorandum of Transfer of the property under the
RealProperty Act in favour of Liveris Nominees
Pty Ltd
forthwith for the purposes of giving effect to this
agreement."
The Deed is headed as follows:-
"FAMILY LAW ACT
(COMMONWEALTH)
Sections 4 and 86
Maintenance Agreement"
As I have commented in an earlier ruling in this case, (17/2/88)
the fact that
the Deed was registered pursuant to s.86 of the Family Law Act as a
maintenance agreement does not prevent the Court
from examining whether it is
in fact such. Nor, of course, does the fact that it is described in the
heading as a maintenance agreement
under the Act. The question must be
determined by examining the Deed in the light of the definitions supplied by
the Act. These
definitions have since, in part, been amended - although I do
not think to any relevance on this question. However I proceed under
the Act
as it stood on the date of the registration of the Deed which was 15 January
- At that time the definition of "maintenance
agreement" was as
follows:-
" 'Maintenance Agreement' means an
agreement in writing made, whether before or after the
commencement
of this Act, between the parties to a
marriage, being an agreement that makes provision with
respect to financial matters,
whether or not there are
other parties to the agreement and whether or not it also
makes provision with respect to other matters,
and
includes such an agreement that varies an earlier
maintenance agreement;".
"Financial matters" is defined as:-
" 'Financial
Matters', in relation to the
parties to a marriage, means matters with respect to -
(a) the maintenance of one of the parties;
(b) the property of those parties or of either of them;
or
(c) the maintenance of children of the marriages;".
- I
say at once that clauses 1, 2 and 3 of the Deed of 15 January 1982
cannot in my view come within the definition of "financial matters".
- Clause 1 merely recites that the parties shall continue to live together
in mutual love and respect. While that is a desirable
state of affairs it does
no more than express an intent that the marriage continue. No doubt in a very
broad sense it may be argued
that mutual love and respect imply a promise to
maintain each other; but that obligation is recognised, within defined limits,
by
s.72 of the Family Law Act whether or not mutual love and respect prevail.
At most, and so far as any legal obligations are concerned,
Clause 1 can go no
further than s.72. Merely to set out that obligation does not thereby make
provision for financial matters or
make the Deed a matter "with respect to"
the maintenance of one of the parties.
On the other hand in Bowlas v Bowlas (1965) 1 All ER 803 at 806 Scarman
J. delivering the judgment of the Divisional Court saw the act of marriage as
marking the advent of a new social unit
- In the context of this Deed I consider that the expression "family" in
clause 4 includes husband, wife and children.
I think one may for this
purpose look at Clauses 1, 2 and 3 which, however ineptly expressed, recognise
an interaction between husband,
wife and children as a family unit.
Furthermore in the discretionary trust, of which Liveris Nominees Pty Ltd is
the trustee, the
husband, wife and all the children are mentioned as unit
holders.
- Clause 4 of the Deed recites that the husband and wife shall
execute a
Memorandum of Transfer of the property to Liveris Nominees Pty Ltd "forthwith
for the purpose of giving effect to this
agreement". The transfer to that
effect was duly executed by the parties on 15 January 1982 is Exhibit "C".
- While one must
acknowledge and lament the loose and unsatisfactory
phraseology contained in the Deed, its purpose is sufficiently clear to give
it operation as a Deed under seal. That purpose is to transfer certain
designated property of the spouses to a trustee to hold that
property for the
benefit of the family, being the husband, wife and all the children.
- Therefore, within the definitions of the
Act, the Deed makes provision
"with respect to" financial matters, financial matters meaning, inter alia,
matters with respect to
the property of the parties. In my view it must be
regarded as a "maintenance agreement" within the meaning of the Act, and the
transfer executed as a result must be regarded as "a deed or other instrument
executed for the purposes of such an agreement", within
the meaning of s.90.
- It is submitted that it cannot be shown that this Deed arises out of any
duty by either spouse to maintain
the other; and that the existence of such a
duty is necessary before the Deed can be regarded as a maintenance agreement.
I do not
accept that. It is not what the definition sections say; and the use
of the word "maintenance" in the expression "maintenance agreement"
need not
connote a duty to maintain in the sense used in s.72. Many such agreements
are postulated on rights or claims to property
under s.79; or are settlements
of both maintenance and property. The width of the definitions is in my view
deliberate, to encourage
settlement rather than court disputes as part of the
general conciliation policy of the Act. See, for example, Parts II and III.
- Gibbs C.J. observes in Gazzo v Comptroller of Stamps(1981) [1981] HCA 73; 149 CLR 227 at
232 that the definition is "very wide in its scope and includes many
agreements that could not be described as maintenance agreements
in the
ordinary sense". At p 233 His Honour gives an instance of the spouses agreeing
to sell the matrimonial home and divide the
proceeds equally. That sort of
transaction does not in itself connote a duty to maintain. See also p 263,
where Aickin J. after
referring to the definitions of "maintenance agreement"
and "financial matters" says,
" An examination of the interaction of those
two definitions demonstrates that the prima facie
operation of the expression 'maintenance agreement' is
extremely wide
and goes far beyond what would be the
ordinary meaning of the term 'maintenance agreement' as
between the parties to a marriage,
whether in respect to a
period when the marriage was still on foot or in respect to
a period after the marriage had been dissolved."
The definition of "matrimonial cause" includes (d) proceedings between
the parties to a marriage for ... the registration of a maintenance
agreement". Such "proceedings" which are defined as "a proceeding in a court"
are sufficiently achieved under s.86(1) by registration
"in any court having
jurisdiction under this Act". If it were, therefore, necessary to link the
agreement to a proceeding in a court,
the link is there; without any
suggestion that a condition precedent of such proceeding is some element of
marital discord.
20.
Mr Pauling QC for the Commissioner of Taxes submits that parliament could
never have intended the wide results that might flow from
a literal
interpretation of the definitions. He may well be correct in submitting that
there must be something more than a merely
incidental connection between the
marriage and a particular property transaction. An agreement by spouses to
purchase shares jointly
or to lend money jointly to a third party may be
transactions which are not "with respect to" the property of the parties; or
may
not be transactions which arise out of the marital relationship; though
the circumstances would need to be considered in every case.
But it is not
necessary to decide in this case how far or near the boundaries must be drawn.
Insofar as Mr Pauling suggests that
in this case there is no substantial
connection between the Deed and the marital relationship I must disagree. The
Deed is between
the parties only, it makes provision for the "family", which
in the context includes the husband and the wife, and it contemplates
the
transfer of the property to a trustee for the benefit or presumed benefit of
the husband wife and children. Save for the trustee,
no parties outside the
immediate family are involved. As a rearrangement of marital assets it seems
to me a transaction which arises
out of the marital relationship or is at
least sufficiently connected with it to bring this agreement within the class
of agreements
contemplated under the Act as a "maintenance agreement".
Further than that I need not go.
21. On a constitutional argument, Mr Pauling
makes the rather courageous
submission (in view of certain dicta in Gazzo's case [1981] HCA 73; (1981) 149 CLR 227) that
once s.90 had been held not to be a valid law of the Commonwealth vis-a-vis
the States (Gazzo's case) it must be held not to
be a valid law with respect
to the Northern Territory. He submits that on a proper construction of s.90
the intention of Parliament
was to legislate to exempt the specified
instruments from duties and charges Australia-wide (including Territories) or
not at all.
I think that argument must fail for three reasons:-
- Although it is correct that in Gazzo's case the High Court were
determining
whether s.90 of the Family Law Act was sufficiently within federal
power to apply to stamp duty imposed by a State on transfers of
land executed
in accordance with orders under Part VIII of the Family Law Act, it would be
surprising if the High Court had not at
least commented on the fact that their
reasoning embraced duties imposed in all parts of Australia (i.e. including
the Territories).
The specific answer given by the High Court was that "s.90
in its attempted application to stamp duties imposed under the Stamps
Act
(Victoria) on transfers of land executed by a person in accordance with an
order under Part VIII of the Family Law Act 1975 is not a valid law of the
Commonwealth". (See p 280).
- Mr Pauling relies on the comments of Windeyer J. in Spratt v Hermes
[1965] HCA 66; (1965) 114 CLR 226 at 278 where His Honour says,
" ... in my view when the Parliament makes a law intended
to be of general application throughout
the whole of the
Commonwealth and its Territories it does so in the
exercise of all powers it thereunto enabling. If the law
be
within power under s.51 it will, by the combined effect of
that section and of s.122, be law in and for States and the
Territories alike. If it be invalid as beyond s.51 then, in
the absence of a clear indication that it should
nevertheless apply in the Territories, it will I consider fail