Sanders v Sanders

As the land to which this order referred was part of a larger area, some fifty-seven acres of land, the Supreme Court also ordered that a right of way be provided over other parts of the fifty-seven acres to permit of access to the matrimonial home by the respondent, the children and those who should want to visit her. To my mind, as a matter of expression, these orders in referring to the matrimonial home, as well as the subject land, included the furniture and appointments then in the matrimonial home: but in any case in the instant proceedings the Court made it clear that their inclusion in the settlement was intended. The nature of the intended settlement, however, was not clearly expressed in the decree, but it seems to have come to be understood by the parties and by the Supreme Court when making the order under appeal as intending that the matrimonial home should become the property of the respondent. No appeal was brought against this decree: and in any case it became absolute at the end of June 1966 (see s. 90).

The fifty-seven acres of land on part of which stood the matrimonial home is a leasehold held of the Crown under the Crown Lands Ordinance 1913 of Norfolk Island. By cl. 20 of that Ordinance - "No lease shall be assigned, sublet, or mortgaged without the approval of the Governor-General or the Minister." And by cl. 25 - "Any person who is found occupying or using any land or building of the Crown shall, unless he proves that he was lawfully occupying or using the said land or building under lease or licence from the Crown, be liable, on information by the Administrator or by any person specially authorised by the Minister, to a penalty not exceeding one pound for the first offence and not less than one pound nor exceeding two pounds for the second and every subsequent offence."

A settlement which involved an assignment of the lease thus required the Minister's approval. Also, possibly, occupation of the land by the respondent without such approval might involve a penalty. But neither of these circumstances precluded the making of an order to transfer the title to and possession of the land. I respectfully agree with the decisions of the State Courts to this effect: e.g. Horne v. Horne [1] ; Leach v. Leach [2] .

1. [1963] S.R. (N.S.W.) 121, at p. 133. 2. [1965] V.R. 599, at p. 606.

On 17th November 1966 the matrimonial home was completely destroyed by fire. On 25th November the respondent made an application to the Supreme Court for an order requiring the appellant to rebuild and reinstate the matrimonial home or, in the alternative - "requiring the respondent the now appellant (i) to make suitable and adequate provision for a home for the respondent and the children and (ii) directing the appellant to pay to the respondent all moneys paid or payable to the appellant in respect of insurance moneys on the said former matrimonial home."

Upon this application of the respondent to which I shall refer as the November application, the Supreme Court by an interlocutory order enjoined the Alliance Assurance Co. Limited, the insurer of the matrimonial home and its contents, until further order from paying any moneys to the appellant or to any other person in respect of any claim arising out of the fire damage to the matrimonial home. The Alliance Assurance Co. Limited appeared in the application for this injunction and, in the long run, consented to the order made. For my part I am clearly of opinion that, quite apart from that consent, the Supreme Court had power to grant the injunction in exercise of the power given to it by s. 124 of the Matrimonial Causes Act 1959 Cth. That power may be exercised to maintain an existing situation until the Court can decide what should be done upon the substantive application for maintenance, even though its exercise involves third parties, and the rights of any such party or parties in relation to one or both of the parties to the matrimonial cause, or in relation to the property of one or both of those parties. But, of course, it must be exercised in a proceeding under the Matrimonial Causes Act and must be in aid of the exercise of the Court's jurisdiction in those proceedings: see Horne v. Horne [1] . In the present case, quite clearly the Court could restrain the payment to the appellant of money admittedly due to him. And, in my opinion, if it were necessary for the purpose of deciding whether an injunction should be granted or to determine its extent or to render it effective, the Court could have determined the existence of a disputed liability by the Assurance Company to pay any moneys to the appellant.

After the making of the decree nisi, the appellant discharged a mortgage of the said land held over it at the date of the decree by the Commonwealth Trading Bank of Australia and gave a mortgage thereover to a company known as Myee Limited: but although under covenant to cause the interest of the mortgagee to be included in every policy of assurance of the mortgaged premises, the appellant did not assign the policy of insurance over the matrimonial home to this mortgagee or take steps to add its name to the policy. The policy of insurance contained the names of the respondent and the Commonwealth Trading Bank as the insured to whom payment was promised in the event that any insured contingency occurred. Though neither was a party to those proceedings between the appellant and the respondent, both the Alliance Assurance Co. Limited and Myee Limited were given notice of the further hearing of the respondent's November application. This took place at Norfolk Island on 17th March 1967, the respondent being represented by her solicitor and the appellant appearing in person. Neither Alliance Assurance Co. Limited nor Myee Limited appeared or were represented at that hearing.

In brief, the fact of the destruction of the matrimonial home, the terms of the insurance policy, the execution of the mortgage to Myee Limited and its terms, the fact that no assignment of the policy had been effected, and that the Commonwealth Trading Bank, named as a co-insured with the appellant, no longer had any interest in the policy were proved before the Supreme Court. Also, it appeared that the Minister had not approved a transfer of the lease of the subject land. The terms of the mortgage to Myee Limited showed that that mortgage was of all the appellant's land on Norfolk Island, specifically including the subject land but subject to the rights of the respondent therein under the decree nisi to which I have referred. Also, from those terms, it appeared that the appellant was not only entitled to other land of a freehold tenure on Norfolk Island but that he was interested in a company known as W. A. Sanders and Sons Limited, in a butchery business and slaughter yard on the island and that he had other personal property. But there was no evidence before the Court on this application as to the value of such land or such business interests.

That the respondent is not required to settle the matrimonial house on the petitioner as directed by the decree nisi, but only the land as described in the decree nisi on part of which the matrimonial home formerly stood before it was burned down.

That the respondent pay to the petitioner a lump sum being the sum payable by the Alliance Assurance Co. Limited under any policy or policies of insurance in respect of the destroyed matrimonial home or its contents.

That the respondent execute an assignment of the said sum payable by the Alliance Assurance Co. Limited under any policy or policies of insurance in respect of the destroyed matrimonial home or its contents, to the petitioner.

That the respondent is restrained from assigning the whole or any part of the said sums payable by the Alliance Assurance Co. Limited under any policy or policies of insurance in respect of the destroyed matrimonial home or its contents, to any person other than the petitioner and the respondent is restrained from receiving such moneys.

That the Alliance Assurance Co. Limited is restrained from paying the said moneys otherwise than to the petitioner or her solicitor on her behalf.

That the respondent execute the said assignment within twenty-four hours, that is to say, not later than 10.30 in the forenoon of 22nd March 1967.

That it shall not be necessary to serve this order or a copy thereof upon the respondent as a condition precedent to his execution of the said assignment.

1. That in the event of the respondent not having executed the said assignment on or before the said time whether or not he has refused or neglected to do so, the Registrar of the Court be and he is hereby appointed to execute the said instrument in the name of the respondent and to do all acts and things necessary to give validity and operation to the instrument.

2. That the petitioner have liberty to apply including liberty to apply for an order under s. 120 of the Matrimonial Causes Act should that be necessary.

3. That the respondent pay the petitioner's costs of and incidental to the application including the costs of preparation and execution of the said assignment and the costs reserved of the application heard on 21st December, 1966.

4. That the respondent pay the costs of the Alliance Assurance Co. Limited of the application heard on 21st December, 1966.

The appellant seeks to set aside all these orders on a number of grounds. He complains, first, that an application for a settlement under s. 86 was not as such included as a claim in the respondent's petition. He therefore submitted that by the combined operation of ss. 68 and 89 of the Matrimonial Causes Act 1959 and of r. 198 of the Matrimonial Causes Rules, the November application could only be made by leave of the Court; and that no such leave was obtained.

Supposing, however, for the moment that a general request for maintenance made in the petition was insufficient to ground an order under s. 86 - a matter to which I will later refer - the Supreme Court not only entertained the application when first it came before it, but set a time for its further consideration: and at the latter time fully heard it. No objection was at any time taken to the application for want of the Court's leave to bring it. In my opinion, there is no substance in this objection by the appellant. Though given inferentially and without formality, I have no doubt that, assuming it to be necessary, the Supreme Court did give leave for the making of the November application.

The appellant next submits that the November application was not an application for a settlement and that the Supreme Court acting under the Matrimonial Causes Act could not exercise the powers given it by s. 86 except upon an application made in due form and in due time specifically claiming a settlement of property.

Before I refer to the form of the application, I should observe that in any case the objection to the form of application misconceives the place of s. 86 (1) in the Matrimonial Causes Act and its relationship to ss. 84 and 87. Section 86 (1) is not, in my opinion, built upon nor in any wise related to provisions such as s. 55 of the Matrimonial Causes Act, 1899 of the State of New South Wales. No elements of punishment or deprivation of a party such as might be considered in exercising the power given by such provisions are appropriate in considering whether any and if so what order should be made under s. 86 (1). If any of the judgments in Smee v. Smee [1] , properly understood, is to the contrary, I am respectfully unable to agree with it. No doubt an order dealing with property vested in a wife, whether or not beneficially, can be made under the latter sub-section in an appropriate case: but, if made, it will be upon the ground that in the circumstances of the case, having regard to the means, earning capacity and conduct of the parties to the marriage and all other relevant circumstances, it is just and equitable that it should be made. Section 86 (1), with the great width properly to be given to the word "settlement", gives an extensive and flexible power to the court to "settle" property upon a wife as a means of providing for her maintenance and for that of the children of the marriage. In this respect, in my opinion, it is evidently intended to be and is aptly expressed and so placed in the Act as to be complementary to s. 84. Consequently, I can see no reason to doubt that a court exercising jurisdiction in proceedings for maintenance under the Matrimonial Causes Act can exercise the powers given by s. 86 (1), though there be no greater claim made by the petitioner in the petition than a claim for maintenance, without specifying a settlement as the desired means or as a component of the desired means of the provision of such maintenance. Section 87 as clearly appears from its terms is as applicable to the exercise of power under s. 86 (1) as it is to an exercise of power under s. 84. Both powers, in relation to the provision of maintenance, are grounded on the same considerations which earlier in these reasons I have expressed by combining expressions taken from each section. In my opinion, the Court is not limited in the exercise of the power given by s. 86 (1) to cases where the wife has contributed to the property which it is thought appropriate to settle on her as a means of providing her maintenance, or which it is thought ought to be settled upon her in adjusting as between them the rights or moral claims of the spouses upon the dissolution of their marriage. With respect I am unable to agree with expressions to the contrary to be found in Smee v. Smee [1] .

1. (1965) 7 F.L.R. 321. 2. (1965) 7 F.L.R. 321.

But, of course, s. 86 (1) covers other situations than the provision of maintenance. As is rightly pointed out in Horne v. Horne [2] disputes between the parties to the matrimonial cause as to the beneficial ownership of property vested in one or both of them, or in a trustee for one or both of them can be, and indeed can only be determined in the matrimonial cause. Further, in my opinion, in an appropriate case, although one of the parties has no legal or equitable right to property vested in the other, or to any greater interest in property than is already wholly or partially vested in him or her, the Court hearing the matrimonial cause may make orders settling that property on that one or increasing the beneficial interest of that one in property already wholly or partially vested in him or her as the case may be. No doubt cogent considerations of justice founded on the conduct and circumstances of the parties would need to be present if such orders were to be made. But, if those considerations are present, settlements beyond the provision of mere maintenance, or the determination and enforcement of rights, legal or equitable, in my opinion, can be made. Doubtless, the extent of these powers and the far-reaching consequences of their exercise were among the factors which moved the Parliament to provide in substance that they should be exercised so far as practicable by the judge who hears the proceedings for the principal relief in the matrimonial cause: see s. 68 (4).

It will be appreciated from what I have thus far said that I would be unable to agree with much that was said in Smee v. Smee [1] . Had there been sufficient material in that behalf before the primary judge in that case, not necessarily including any evidence of any contribution by the wife to the husband's property, I would not have seen any reason for disturbing the order he made. Whether or not there was such material is not a matter with which I am presently concerned.

The Supreme Court of Norfolk Island is a superior court of record: thus there is no question, in any case, of treating its order as a nullity. What I have so far said indicates, however, that, in my opinion, the Supreme Court had before it proceedings under the Matrimonial Causes Act in which it could exercise its powers under ss. 84, 86 (1) and 87 of that Act. Part XIV of the Matrimonial Causes Rules provides, amongst other things, for the form and content of applications for maintenance. Part XXI deals with the consequences of non-compliance with the rules. But, though failure to comply with the rules will not deny a court sitting under the Matrimonial Causes Act ability to exercise its powers, and though, as I think, a general claim for maintenance would be enough to attract the powers given by ss. 84, 86 (1) and 87, great care ought to be exercised to ensure that opponent parties are fully apprised of what is claimed against him or them before the Court's powers are exercised. Substantial adherence to the Matrimonial Causes Rules will no doubt be the most efficacious way of ensuring both that knowledge and adequate opportunity to meet the claims in fact being made. Thus, though, as I think, a claim for maintenance in general terms will in point of power warrant an order for a settlement, no such order should be made until the person to be affected is aware either of the claim for such an order, and preferably of the nature of the particular order sought, or of the Court's disposition to make it and adequate opportunity is afforded to that person to present his or her case in opposition to the making of the order.

However, in my opinion, the November application was clearly an application for a variation of the terms of the decree in so far as they related to the maintenance of the petitioner and the children: see s. 87 (1) (j). Those terms included an order for a settlement: and it was the variation, by substitutionary provisions, of this order which had not been carried out that the application principally sought. Thus, allowing for the desirability of the formality in that respect which I think should obtain, the terms of the November application were, in my opinion, quite adequate to claim a "settlement". Further, in my opinion, on any view that application did adequately bring to the appellant's notice the nature of the order sought against him. Also, in my opinion, the Supreme Court, by its orders, did not travel beyond the substance of the claim which was made.

The appellant then submits that there was no material before the Supreme Court upon which it could order the payment by the appellant of a sum equal to the sum payable by the Alliance Assurance Co. Limited under the policy of insurance. But the situation created by the decree, the fact and manner of the destruction of the insured property, the policy and its amount were all before the Court. Whilst it was not found that the insurance company had admitted a claim under the policy, there was nothing before the Court to cast doubt upon the validity of such a claim. If in the unexpected event that the amount for which the property was insured is not paid by the insurance company because in the event it is not payable, the proper construction of the Supreme Court's second order will arise and will result, either in a further application by the respondent because no sum was actually payable by the appellant, or in an application by the appellant for a variation of the order on the ground that the sum which at the time of making the order was fairly concluded as likely to be paid under the policy, did not actually become payable. But these possibilities do not mean that there was no material before the Court upon which it could make the orders it did make. Accordingly, in my opinion, no ground is shown for wholly setting aside the second of the orders made by the Supreme Court. The appellant did complain, however, that that order contained no restriction on the use which the respondent might make of the lump sum of money when received by her: and, in my opinion, this was a just complaint. However, it will be met by varying the second order, by consent of the respondent, by the addition of the following words, namely, "to be used by the petitioner so far as the same shall extend to provide and furnish a home for herself and the children of the marriage whilst minors and unmarried, which home shall be the property of the petitioner".

The appellant attacked the fourth and fifth orders made by the Court upon the ground that compliance with them would deny him the ability to pay the lump sum directed by the second order to be paid. However, although not expressed with precision, the substance of the Court's order is sufficiently conveyed. As I read the order, the respondent is to provide a lump sum equal in amount to the sum payable to him by the insurance company. Although ambiguous, I think the expression "sum payable to him" was intended in this order to mean the amount for which the property was insured. On the other hand, it could mean the amount which in fact and in law is payable under the policy. But, in either case, orders 3-8 inclusive were intended, in my opinion, as a means of securing that sum to the respondent. Upon the assignment of the policy being effected and the payment thereunder of the insurance moneys to the respondent, the second order would be satisfied.

However, the appellant further disputed the propriety of the fourth and fifth orders upon the ground that in substance it ordered the insurance company to pay to the respondent the amount insured. But, clearly, in my opinion, these orders went no further than to restrain the insurance company from paying such moneys as it decided to pay under the policy to any other person than the respondent. The Court did not affect to decide what, if any, moneys were payable under the policy of insurance. There is therefore no need in this case to determine how far the Supreme Court in its final order could have determined rights to property as between one or both of the parties to the matrimonial cause and the third party as an incident to the grant of matrimonial relief.

Lastly, the appellant claimed that by ordering him to pay, or by assignment of the policy secure, the payment of the proceeds of the policy to the respondent, the Court unauthorizedly trenched upon the rights of the mortgagee, Myee Limited. In my opinion, there is no substance in this submission. That mortgagee had no rights in the proceeds of the policy. True it is that under the terms of the mortgage the appellant promised to include the name of the mortgagee in all policies of insurance over the mortgaged property. But this did not give the mortgagee any legal rights in the policy itself or in its proceeds. The Supreme Court in ordering an assignment of the proceeds of the policy to the respondent was not dealing with any property of the mortgagee.

For these reasons, I am of opinion that, by consent, the second order of the Supreme Court should be varied in the manner I have indicated but that otherwise the appeal should be dismissed with costs.

I agree in the judgment of the Chief Justice and in his reasons.

I agree that this appeal fails, except to the extent that the order under appeal should be varied. It should direct that the moneys in question, when received by the respondent (the petitioner in the original proceedings) whom I shall call the wife, are to be applied towards the acquisition of a home for herself and her children.

I shall not traverse all the objections which counsel for the appellant raised to the order which Joske J. made in the Supreme Court of Norfolk Island. In so far as they were not disposed of in the course of the argument, they are answered by what the Chief Justice has said in his judgment.

I wish however to state for myself what I consider to be the effect of s. 86 (1) of the Matrimonial Causes Act 1959 Cth. The power (under s. 84) to make an order for maintenance, and the power (under s. 86 (1)) to order a settlement are not mutually exclusive. They overlap and may be exercised separately or in combination to produce a total result which in the circumstances of the case is just and equitable. An order under s. 86 (1) may be a means of providing maintenance. Section 87 shows how flexible and far-reaching are the powers which a court dealing with a matrimonial cause may now exercise. The discretion must of course be exercised according to accepted principle, for what is just and equitable in this jurisdiction is not a matter of unfettered individual opinion. One party is not to be required to make over property to the other simply because the judge thinks his (or her) conduct was reprehensible. There is a distinction between s. 84 and s. 86 (1). But it is not, as I read the Act, a distinction between two different ends: rather it is between two different means directed to the same end, a just and equitable arrangement of proprietary rights and interests, ancillary to one of the forms of principal relief for which the Act provides. The basic distinction between s. 84 and s. 86 (1) is that a provision for maintenance under s. 84 does not involve an order relating to some particular item of property or an interest therein. An order may be made under s. 84 providing simply for periodic payments, or for a lump sum, by way of maintenance. The party liable to perform it may then satisfy the obligation out of any resources available to him (or her). That is a matter for him (or her) to decide. An order under s. 86 (1), on the other hand, must be for a "settlement of property to which the parties are, or either of them is, entitled (whether in possession or reversion)". I agree with what Walsh J. said in Smee v. Smee [1] , that an order that one party should "settle" a sum of money, not being any existing separate fund, upon the other is not an order which can be made by virtue of s. 86 (1). But that does not mean that such an order cannot be made; for a provision for maintenance under s. 84 is not restricted to a sum sufficient to provide subsistence. A lump sum may be ordered. And the order is not the less valid because it be described as a "settlement" and the party liable is permitted to raise it out of whatever of his assets he chooses. Moreover if an order be made that a party "settle" a sum upon the other as a means of providing maintenance, it would be well within the powers of the court to direct that it be secured, or in a strict sense "settled". For example the order could provide for payment to trustees for the benefit of the party in whose favour it was made, he (or she) maintaining the children.

The use of the word "settlement" in s. 86 (1), instead of, say, "disposition", has it seems been taken to narrow the application of that provision by separating rigidly the power it gives from the power given by ss. 84 and 87 and by colouring it by the past history of earlier enactments going back to their remote ancestor, s. 45 of the English Act of 1857. This I think is a mistake. Sugerman J. in Smee v. Smee [2] summarized the history of the earlier provisions. I agree with what his Honour said in that case. One consideration, and in many cases no doubt the main or only consideration, when an order for the settlement of specific property is sought is how that property came to belong to the party entitled to it. Was it acquired directly or indirectly through the other party? Was it, for example, obtained as a result of a marriage settlement? Was it the result of material contributions or the endeavours or enterprise of the other party? Considerations of this sort may justify an order under s. 86 (1) notwithstanding that, because of the respective means of the parties or for some other reason, an order for maintenance in the ordinary sense would not be thought necessary. But that these considerations may be cogent does not mean that they alone are relevant. When a decree for dissolution of marriage has been made then, to adopt what was said by Kitto J. in Lansell v. Lansell [1] "a re-adjustment of the property rights of the spouses may be required if consequential injustice to one or both of the spouses and to the children is not to result. The making of a settlement may be a way of carrying to completion, or nearer to completion, the task of dealing fully with the relationship which is the subject of the matrimonial cause. Orders with respect to maintenance are familiar as one means of dealing with an economic situation arising from the granting of substantive matrimonial relief. Orders varying ante -nuptial or post-nuptial settlements, as provided for by s. 86 (2), provide another example: see Dewar v. Dewar [2] . The orders which s. 86 (1) authorizes are more akin to the latter than to the former, for in considering under s. 86 (1) what is just and equitable in the circumstances the court is not restricted to considerations relevant to maintenance; but they share with both the character of relief incidental to, because consequential upon, the dissolution of a marriage or the granting of one of the other forms of relief which identify a cause as a matrimonial cause in the ordinary English sense of the expression."

1. (1965) 7 F.L.R., at p. 325. 2. (1964) 110 C.L.R. 353, at pp. 361, 362. 3. (1960) 106 C.L.R. 170, at p. 174.

On the other questions argued I have few observations to make. The power of the Supreme Court to grant the injunction it did seems to me beyond question. Apart from anything in the Act, the general jurisdiction of the Supreme Court of Norfolk Island would, I consider, be quite sufficient for the purpose.

The consent of the Minister was necessary for the transfer to the wife of the land and house as ordered by his Honour. This consent was not given, for reasons which are, of course, unrelated to the matrimonial differences between the parties. I shall assume that the Minister's consent having been refused, his Honour's order was wholly abortive. I shall assume that technically his Honour was wrong in his judgment in describing the consequences of his order as giving the wife an equitable interest in the house and land. But that does not mean that the house having been burnt down the wife cannot now be given the insurance moneys as representing in part what his Honour had wished her to have. If his Honour's order in respect of the land on which the house stood is to be varied because it is impossible for her to obtain a title to it, that is a matter for his Honour to deal with if the parties cannot come to agreement as to some of the parcel of land.

I would only add that there may be some cases - I do not say this is one - in which when specific property is settled by an order under s. 86 it may be desirable that it be vested in trustees for the party to be benefited, with a gift over (to the children or the other party) in the event of his or her marrying again, rather than leave this contingency to be dealt with under s. 87 (1) (j). I say this because, although the word "settlement" has in this context a very wide denotation - see Dewar v. Dewar [1] - I think that as used in s. 86 (1) it does postulate, ordinarily if not necessarily, something more than the mere making over of the property in question to one of the parties to be dealt with in any way that he or she may choose. The requirement which I have in mind would be met in the present case by a provision such as the Chief Justice proposes, that the money to be received by the wife be used to provide a home for herself and the children.

I agree that an order for a settlement of property, real or personal, ought not to be made except after due notice to the party in whom that property is vested. But, for reasons given by the Chief Justice, the order that the wife have the house cannot now be challenged on the ground that it was not asked for in the petition.