I. INTRODUCTION

10.1 In this Chapter we deal with matters arising out of our earlier recommendations concerning property and maintenance. By designating them as “consequential” we do not mean to imply that they are unimportant. On the contrary, they are significant issues, and often raise difficult technical questions. We examine a number of matters:

• claims by and against third parties in proceedings for adjustment of property or for maintenance;
• the means of dealing with a prospective entitlement to property or financial resources;
• the procedures for ascertaining existing property rights in accordance with general principles of law;
• the variation setting aside and termination of orders for financial adjustment;
• the effect of the death of a party on proceedings;
• the setting aside of transactions designed to defeat claims;
• stamp duty on the transfer of property; and
• the allocation of the financial adjustment jurisdiction to courts in New South Wales.

II. CLAIMS BY AND AGAINST THIRD PARTIES

A. Claims By Third Parties

10.2 We have referred to the possibility of conflicting claims under our proposed legislation and the Family Law Act (paragraphs 9.34-9.37). There is a broader question as to how to protect people who are not the primary parties to proceedings for financial adjustment but who have an interest in the proceedings. A parent of a de facto partner may, for example, claim a proprietary interest in property in dispute by reason of contributions to the acquisition of the property. The parent could institute independent proceedings asserting this claim but the most convenient course of action may be for the parent's claim to be determine in the context of the proceedings between the de facto partners.

10.3 We have considered whether it is necessary to provide specifically for the intervention of third parties in proceedings between de facto partners. Section 92 of the Family Law Act, for example, empowers the court to make an order entitling a third party to intervene in the proceedings. The intervener is deemed to be a party to the proceedings, with all the rights, duties and liabilities of a party. However, at this stage we think it is unnecessary to introduce equivalent legislation since existing powers to add third parties to proceedings appear to be sufficient. Under our proposals for the allocation of the adjustive jurisdiction most claims relating to property would be heard in the Supreme Court (paragraph 10.40). Part 8, rule 8 of the Supreme Court Rules, 1970, allows a person to be added as a party to proceedings if this

“ is necessary to ensure that all matters in dispute in the proceedings may be effectually and completely determined and adjudicated upon”. ¹

The addition of a party may be made on the application of the person concerned, or on the application of a party to the proceedings. Alternatively, the court may act of its own motion. If we are proved wrong in thinking that existing powers are adequate, legislation can be introduced later to overcome any deficiencies.

B. Claims Against Third Parties

10.4 A second problem which has given rise to some difficulties under the Family Law Act is the extent to which a court should be able to make orders binding third parties. The issue can arise, for example, where assets such as the partners’ home are held by a family company under the control of one party and the claimant seeks an order binding the company. The scope of the courts powers under the Family Law Act is complicated by the constitutional limitations referred to in Chapter 2 and by the terms of the Act particularly section 114 which is concerned with injunctions. Experience under the Family Law Act provides some guidance as to the issues that are likely to arise in practice.

10.5 In the leading case of Ascot Investments Pty. Ltd v. Harper, ² the High Court held, as a matter of interpretation that the Family Court did not have jurisdiction to order a company and its directors (other than the husband) to register a transfer to the wife of the husbands shareholding in the company, notwithstanding the husband’s refusal to abide by other orders of the court. Despite this decision there are some circumstances in which an order can be made against a third party, or at least affect the interests of a third party. The law is in a state of flux, ³ but the following are illustrations of the circumstances in which orders of this kind have been made in proceedings under the Family Law Act.

• An order was made against an insurance company restraining it from paying money due under a fire policy to any person other than the wife. ⁴ This has been justified on the basis that the company s substantive rights were not prejudiced. It was not required by the order to pay out money but was simply restrained from paying to any person other than the wife. ⁵
• Interlocutory injunctions have been granted against family companies to prevent property dealings by them. These orders have been justified as necessary to preserve the ability of the court to make orders for transfer of property or for maintenance. ⁶ In general interlocutory injunctions of this kind will only be made where one of the parties to the marriage has effective control of the company, but orders have been made (more contentiously) where control rests with other family members, for example, the mother of one of the parties. ⁷
• An interlocutory injunction has been granted to restrain the husband’s mother (who had intervened in the Family Court proceedings) from continuing proceedings in a State Supreme Court in which she claimed that the matrimonial home was held in trust for her. The injunction was granted pending determination of the property proceedings between husband and wife. ⁸

10.6 If we make no specific recommendations concerning orders against third parties, the extent to which a court determining a dispute between de facto partners can make such orders will depend on an interpretation of its general powers to issue injunctions and to make other orders (paragraphs 9.27-9.30). Unlike the Family Court, there is no constitutional barrier to a State court making orders against third parties, if such orders are authorised by the relevant legislation or the inherent powers of the court. For this reason, the experience of the Family Court cannot be applied without qualification to the new jurisdiction that we have recommended should be created. Nonetheless, the circumstances in which the Family Court has made orders against third parties may provide some guidance as to the circumstances in which a State court would be likely to make orders binding third parties. We refer to the following situations as examples:

• We have pointed out in paragraph 10.3 that procedures are available under Part 8, rule 8, of the Supreme Court Rules to add third parties to proceedings in order to ensure that all matters are effectually and completely determined. Thus, for example, a third party who claims property also claimed by a de facto partner, could be added to the proceedings. The court would have power to make an order in favour of or against the third party in relation to the claim.
• The general power of the court to issue injunctions where it considers it proper to do so would permit a court to make a temporary order against the third party. This could be done to preserve the status quo until the claims between the de facto partners are determined. For example, we consider that where a de facto couple have been living in a house owned by a family company or a relative of one of the parties, the court would have power to make a temporary order against the company or the relative, restraining any sale of the house until further order. Whether the power was exercised in a particular case would depend upon a variety of circumstances, including the relationship between the third party and the de facto partners.
• Orders could be made against third parties where the commercial or property interests of those parties are not substantially affected. If, for example, a dividend has been declared by a family company but not yet paid, the company could be restrained from paying the dividend except to one of the de facto partners. Similarly, if one of the partners has an immediate entitlement to payment from a superannuation fund, an order could be made against the trustees restraining them from paying out moneys except pursuant to a direction from the court.

10.7 How much further a State court would go in making orders against third parties could be determined on a case by case basis. We think it likely that a State court would take a more generous view than the Family Court of its powers to make orders against third parties, particularly where these are necessary to give effect to orders for the adjustment of property or the payment of maintenance. For example, we think that the narrow interpretation of the Family Law Act adopted in Ascot Investments Pty. Ltd. v. Harper would not necessarily be applied to a State Act in similar terms, given that there is no constitutional impediment to the State court requiring a company to register a transfer of shares from one party to another. Again, whether the order would be made in the particular case would depend upon the circumstances, including the need to protect the interests of bona fide third parties.

10.8 We have given consideration to granting specific powers to the court in proceedings between de facto partners, to make orders against third parties. There are, however, great difficulties in attempting to define in statutory form the circumstances in which an order should be made against third parties. For the limited number of cases in which third parties are involved, we think it is enough for the court to proceed on a case by case basis, utilising its general powers and the procedures available under rules of court. The experience of the Family Court is likely to prove valuable, but will not determine the issue in any given case since State courts will not be bound by the same constitutional shackles.

III. PROSPECTIVE ENTITLEMENTS

A. The Problems

10.9 If the experience of the Family Court is any guide, courts dealing with financial disputes between de facto partners may find that the resources available to the parties do not take the form of property in the strict sense of that term. The resources may include, for example, interests or contingent interests in, or benefits derived from, superannuation funds, discretionary trusts or family companies. We have recommended earlier that contributions to the “financial resources” of the parties should be taken into account in determining an application for adjustment of property. Accordingly, contributions by one partner which have enabled the other to build up resources that are not strictly property, may nevertheless be taken into account in determining an application (paragraph 7.44). This does not, however, resolve all problems where superannuation, discretionary trusts or family companies are involved. We now refer briefly to some of the difficulties.

1. Valuation of Superannuation Entitlements

10.10 One common problem is how a prospective entitlement to superannuation benefits is to be valued for the purpose of determining the resources of the parties. The Family Court has adopted a number of strategies, but a consistent approach is yet to emerge. The strategies include the following:

• Treat the future entitlement as one factor to be taken into account in adjusting property, without attempting to quantify the present value of the entitlement. ⁹
• Divide the accrued superannuation entitlement as at the date of separation or divorce. ¹⁰ This can be done by calculating actual contributions plus accrued interest or by calculating a pay out figure on the basis of a notional resignation at the relevant date. One difficulty is that pay out figures vary considerably, depending on the terms of the fund, while actual contributions may bear little relationship to ultimate entitlement.
• Calculate a percentage of the ultimate pay out figure by reference to the period of cohabitation during which payments were made, as a proportion of the total period of contributions, and then discount that sum in accordance with accepted practice to take into account the accelerated “entitlement”. ¹¹ This has the disadvantage of complexity and often involves speculative calculations.

10.11 We have considered whether to propose a formula for valuing a prospective superannuation entitlement We have concluded that because superannuation arrangements vary so widely, it is not practicable to design a suitable formula to cover all cases. ¹² For this reason, we p refer to leave questions of valuation to be dealt with by the court according to the particular circumstances of the case.

2. Adjustment of Prospective Entitlements

10.12 Our earlier recommendation that contributions to financial resources generally be taken into account in property adjustment will assist a claimant whose partner has property in addition to, say, a prospective superannuation entitlement or the possibility of future benefits from a discretionary trust or family company. If there is no such property available for immediate distribution or it is of little value, the court will be unable to make an order for the transfer of property. A lump sum order may also be inappropriate or unlikely to be enforceable. There are two principal techniques available to a court to deal with the case where the only substantial “asset" is a prospective entitlement or the possibility of a future benefit. We describe these techniques in the following paragraphs.

B. Solutions

1. Adjournment

10.13 First, where the respondent is likely to be eligible to receive benefits within a relatively short time after the breakdown of the relationship, the court could adjourn the proceedings for adjustment of property rights until the time when the benefits are likely to vest or accrue. In the context of marriage, this solution was favoured by the Family Law Council in a paper on Superannuation and Family Law and by the Joint Select Committee on the Family Law Act. ¹³ It has been adopted in the Family Law Amendment Bill 1983 which specifically empowers the court to adjourn proceedings with respect to the property of the parties for a specified period if it is of opinion

“(a) that there is likely to be a significant change in the financial circumstances of the parties to the marriage or either of them and that, having regard to the time when that change is likely to take place, it is reasonable to adjourn the proceedings; and

(b) that an order that the court could make with respect to the property of the parties to the marriage or either of them if that significant change in financial circumstances occurs is more likely to do justice as between the parties to the marriage than an order that the court could make immediately with respect to the property of the parties to the marriage or either of them”. ¹⁴

10.14 An adjournment of proceedings for property adjustment, in our view, may be a satisfactory solution where, for example, the respondent is likely to receive substantial superannuation payments or allocations from a discretionary trust within a relatively short period. Since an adjournment inevitably will delay termination of the parties’ financial relationship, the power of adjournment should be exercised cautiously. We recommend that the court should have power to adjourn proceedings for adjustment of property similar to the power conferred by the proposed amendments to the Family Law Act.

10.15 We note here a difficulty that may arise where proceedings for -the adjustment of property are adjourned. If, for example, the respondent is a member of a superannuation fund and dies while the proceedings are adjourned, payments from the fund will usually be made to the dependents nominated by statute or by the member, or designated in the superannuation trust deed. The payments therefore will not become part of the respondent s estate. However, in this case, the Family Provision Act 1982 enables a surviving de facto partner to apply for family provision. Under section 22 of the Act the court may, in some circumstances, and subject to a number of stringent conditions, follow superannuation payments into the hands of a third party in order to satisfy a family provision claim. Thus, the death of one de facto partner after the institution of proceedings does not necessarily prevent the other partner from obtaining all or some of the proceeds of superannuation (paragraph 10.31).

2. Deferment of Order

10.16 The second technique, which has been used under the Family Law Act, ¹⁵ is for the court to order the respondent to pay a lump sum, but to defer the operation of the order until the prospective entitlement matures (for example, where the respondent receives superannuation payments on retirement). Again, this procedure is likely to be suitable only where the entitlement can be expected to arise within a short time. However, we recommend that the court have power to defer the operation of an order where an entitlement is likely to arise within a short time. We note that the court would also have power to order the respondent and the trustees of the superannuation fund to notify the applicant of the respondents intended date of retirement.

IV. RIGHTS UNDER THE GENERAL LAW

10.17 We have recommended that the court in proceedings between de facto partners, should have power to adjust their property rights having regard to their respective contributions. However, in some cases it will be necessary to determine the existing property rights of the parties under general principles of law, without recourse to the power to adjust those rights. These cases include the following:

• where neither party wishes to invoke the jurisdiction of the court to adjust property rights;
• where neither party is able to invoke the jurisdiction because the basic requirement of cohabitation for a specified time has not been satisfied, or proceedings have not been instituted within the required time;
• where existing rights are uncertain and must be ascertained before an order for adjustment can be made;
• where a third party claims an interest in disputed property.

Of course, even without a specific power to issue such a declaration the Family Court would be empowered to ascertain the existing rights of the parties as a prelude to making an order for settlement of property. The Supreme Court already has power to ascertain the rights of the parties in accordance with the ordinary principles of contract and property law. The court also has power, where appropriate, to issue a declaration as to the parties’ rights. Nonetheless, we think that the court s power to issue a declaration should be expressly included in any legislation dealing with the financial relationship between de facto partners. Accordingly, we recommend that legislation should specifically provide that in proceedings between de facto partners with respect to the existing title or rights to property the court may issue a declaration specifying the rights of the partners or either of them. The court could issue such a declaration in the course of proceedings for financial adjustment It could also issue such a declaration in proceedings between the parties where the court lacks power to adjust their property rights (as where neither party can invoke the adjustive jurisdiction). In other words, the power to issue a declaration would not be dependent on the parties being able to satisfy the jurisdictional requirements in paragraph 9.7.

10.18 Where the court is called on to exercise its power to ascertain and declare existing interests in property it will apply general principles of law, including the law of trusts. We have previously pointed out that general principles state that where one de facto partner purchases property in the name of the other, the presumption of resulting trust and not the presumption of advancement applies (paragraph 7.3). The law does not presume an intention to make a gift even where the partners have been living together for many years. We have considered whether we should change this principle, but we have decided to recommend no change. Of course the presumptions will play no role in determining how the court should exercise its powers to adjust property rights, except that the court, before exercising those powers, may wish to ascertain the existing rights of the parties.

10.19 We emphasise that the express recognition of the jurisdiction to issue a declaration as to the rights of the parties is not intended to affect the adjustive powers of the court. In particular, we do not intend that where an order for adjustment of property is sought, the court must first issue a declaration as to existing rights or determine whether the applicant is entitled to other relief based on general principles of law. In short, it should not be a condition precedent to the exercise of the adjustive jurisdiction that a specific prior determination be made in respect of the parties’ rights under the general law. We therefore recommend that the court’s powers of adjustment should not be dependent upon a prior determination of the parties’ rights under the general law.

10.20 A situation might arise where one de facto partner seeks an order for the adjustment of property and the other partner seeks different relief relying on the general law. It may be appropriate, where each of the proceedings is commenced, in the Supreme Court to consolidate them under Part 31, rule 7 of the Supreme Court Rules. Alternatively, it may be necessary to adjourn one of the proceedings pending determination of the other, particularly where there is a jurisdictional question to resolve. The possibilities are endless and we make no recommendation except to say that experience will tell whether new rules are necessary to cope with new problems.

V. VARIATION, SETTING ASIDE AND TERMINATION OF ORDERS

A. Variation and Discharge

1. Periodic Maintenance

10.21 Section 83 of the Family Law Act confers power on the court to discharge (terminate), suspend, vary or revive maintenance orders. The power to vary an order is not to be exercised unless, since the order was last made or varied, certain specified events have occurred. These include a change in

• the circumstances of the person for whose benefit the order was made;
• the circumstances of the person liable to make payments under the order; or
• the cost of living;

sufficient to justify a variation. The section permits the court to discharge an order if there is just cause for doing so.

10.22 We have adopted a restrictive approach to maintenance, and this may limit the scope for applications to vary or discharge maintenance orders. For example, there may be little room for variation of an order based on the need for economic rehabilitation since the maximum life of such an order is only three years. Nonetheless, some circumstances may justify variation of an order. An example would be where a custodial parent receiving modest support loses part-time employment opportunities because of the long-term illness of a child in his or her care. ¹⁶ Even an order based on a need for rehabilitation may require modification if the circumstances change significantly. Discharge of the order may be appropriate if the need no longer exists. We recommend that the court should have powers to vary, discharge, suspend or revive orders for periodic maintenance similar to those powers specified in section 83 of the Family Law Act. ¹⁷

2. Orders for Transfer of Property and Lump Sum Payments

10.23 Orders for the transfer of property or for payment of a lump sum differ from orders for periodic payments, in that they are designed to end the financial relationship between the parties and usually require compliance within a short time (although lump sum orders may be payable by instalments). Where such orders are made in recognition of past contributions, we think it clear that the grounds for variation should be limited and should not include the broad grounds justifying a variation of periodic orders. Where the orders are made in recognition of future needs (that is, in substitution for an order for periodic payments), there is a stronger case for a wider power of variation. It can be argued, for example, that a lump sum order which has not been fully complied with, or even one that has, should be capable of variation simply because of changed circumstances. ¹⁸ Our view, however, is that the goal of achieving finality should take precedence. We recommend that, subject to what we say about the setting aside of orders (paragraph 10.24), orders for the transfer of property and the payment of lump sums should not be capable of variation. Where an applicant seeks a substantial lump sum payment on the basis of needs which may change within a very short period, the absence of any power of variation can be expected to influence the outcome of the application.

B. Setting Aside Orders

10.24 The Supreme Court has power to set aside decisions (otherwise than on appeal) on certain limited grounds which include fraud.” Section 79A of the Family Law Act specifically empowers the court to set aside an order for transfer of property where it

“is satisfied that there has been a miscarriage of justice by reason of fraud, ¹⁹ duress, suppression of evidence, the giving of false evidence or any other circumstance....”

One of the proposed amendments to the Family Law Act would extend the courts power to set aside a property order to cases where it is satisfied that

“(b) in the circumstances that have arisen since the order was made it is impracticable for the order to be carried out or impracticable for a part of the order to be carried out [or]

(c) a person has defaulted in carrying out an obligation imposed on him by the order and, in the circumstances that have arisen as a result of that default it is just and equitable to vary the order or to set the order aside and make another order in substitution for the order .... “ ²⁰

We recommend that powers equivalent to those specified in section 79A of the Family Law Act (including those specified in the proposed amendments to that section) should be conferred on a court exercising jurisdiction in proceedings between de facto partners. These powers should be available in respect of any order which a court is empowered to make, and not merely in respect of orders for the transfer of property. The court, before setting aside an order, should be required to have regard to the interests of any third party who might be affected by such action.

C. Termination of Periodic Maintenance Orders

10.25 We have recommended that an order for periodic maintenance in favour of a de facto partner should be subject to time limits. An order made on the basis of the applicant s child care responsibilities would end, at the latest when the youngest child attained the age of 12 years (or, in the case of a physically or mentally handicapped child, 16 years) (paragraph 8.32). An order based on the need for economic rehabilitation would terminate no later than three years from the date the order was made (paragraph 8.33). In addition to these limits on the duration of an order, we recommend that an order for periodic maintenance should cease to have effect on

• the death of the party for whose benefit the order is made;
• the death of the person liable to make payments under the order; or
• the marriage or remarriage of the person for whose benefit the order is made. ²¹

10.26 Two members of the Division (the Chairman and Mr Gressier) propose that an order for periodic maintenance should also automatically cease to have effect when the person for whose benefit the order is made enters into a de facto relationship. In their view it would be inappropriate for a former de facto partner to remain under any obligation to maintain his or her partner, after that partner has entered into a new relationship. They argue that it would be anomalous if the legislation provided for automatic termination if the party receiving maintenance married, but not if that party entered into a de facto relationship. If this view is accepted it will be necessary for the legislation to provide that when the person for whose benefit the order is made, marries or enters into a de facto relationship, he or she should be under a duty to advise the other party without delay. ²² The termination of an order should not, however, affect the recovery of arrears due under an order at the time when the order ceased to have effect. ²³

10.27 The other members of the Division (Ms Cass and Mr Justice Nygh) do not agree that entry into a de facto relationship should automatically terminate an obligation to make periodic payments. They point out that under our recommendations, a person who has lived in a de facto relationship may obtain maintenance from the other partner only in very limited circumstances. If a person receiving maintenance from a former partner enters into a new de facto relationship, he or she will not acquire any automatic right to obtain maintenance from the new partner. This may be contrasted with the consequence of a marriage by a person receiving maintenance from a former de facto partner. Under section 72 of the Family Law Act the new spouse will have an obligation to maintain his or her husband and wife, to the extent that the spouse is unable to support himself or herself. These members of the Division are not concerned that their view differentiates between a de facto partner receiving maintenance who marries, and a de facto partner who enters into a new de facto relationship. On their analysis, this is simply a corollary to the proposition that entry into a de facto relationship does not confer a legal status on the partners. If this view were accepted a person paying maintenance to a former de facto partner would, of course, be able to apply for a variation or discharge of the order if the former de facto partner entered into a now de facto relationship, under our recommendations relating to discharge and variation (paragraph 10.22).

10.28 Where it is the partners’ intention that periodic maintenance should continue beyond the periods specified in paragraph 10.25, they can achieve this result by entering into a cohabitation or separation agreement, as outlined in Chapter 11. For example, the partners may specifically agree that an obligation to pay periodic maintenance shall be enforceable against the estate of the partner undertaking that obligation. Under our proposals such an agreement if embodied in a cohabitation or separation agreement, will be effective. The same agreement could not, however, be effectively embodied in a court order by consent, that is one putting into effect an agreement between the partners, because of the limits on the duration of periodic orders referred to in paragraph 10.25.

VI. EFFECT OF A PARTY S DEATH

A. Introduction

10.29 Section 2 of the Law Reform (Miscellaneous Provisions) Act 1944, expresses the general rule that all causes of action subsisting against or vested in a person on his or her death survive against, or, as the case may be, for the benefit of his or her estate. There are some exceptions to this rule but, for present purposes, they are irrelevant. Part 8, rule 10 of the Supreme Court Rules, 1970, is also concerned with the impact of death on causes of action. The rule says that where a party to proceedings dies “but a cause of action in the proceedings survives”, the proceedings shall not “abate” (terminate) by reason of the death. We now discuss the effect of this rule or first proceedings for adjustment of property, and secondly, proceedings for maintenance.

B. Applications for Adjustment of Property

10.30 It is arguable whether proceedings for adjustment of property are proceedings with respect to “a cause of action” within the meaning of the 1944 Act. The Full Court of the Family Court of Australia has held that a claim for alteration of property interests under section 79 of the Family Law Act is not “a cause of action” for the purposes of the equivalent. Western Australian legislation ²⁴ and therefore does not survive against or for the benefit of the estate of a deceased person. However, the decision turned on the structure and terms of the Family Law Act rather than on general principles of law. For present purposes, we assume that proceedings for adjustment of property are proceedings with respect to “a cause of action”, which would survive against or for the benefit of the estate of a deceased person. Even if this assumption is incorrect, our recommendations will clarify the position.

1. Death of (Potential) Respondent

10.31 Where a person dies and at the date of death was living with a de facto partner, the surviving partner is an eligible applicant for the purposes of the Family Provision Act, 1982, and may claim provision from the estate of the deceased partner (paragraph 4.41). If no claim for adjustment of property had been made at the date of death (as one would expect where the partners were living together at that time), the appropriate course of action for a surviving de facto partner who has been inadequately provided for is to institute proceedings under the Family Provision Act. Even if the partners had separated at the date of death the survivor is still an eligible applicant under the Family Provision Act, provided he or she can show sometime dependence on the deceased (paragraph 4.42). In this case (that is, where the parties separated before death) we consider it appropriate that the surviving partner should be left to his or her remedies under the Family Provision Act We therefore recommend that, where a de facto partner dies and the survivor has not at that time instituted proceedings for the adjustment of property, the survivor should be left to such remedies as are available under the Family Provision Act, 1982. On the assumption that a claim for adjustment of property constitutes proceedings with respect to a “cause of action”, this recommendation will require an amendment to the Law Reform (Miscellaneous Provisions) Act, 1944, to ensure that the cause of action does not survive against the estate of the deceased.

10.32 The recommendation made in the previous paragraph leaves a possible gap between the proposed jurisdiction of the court to order the adjustment of property and the jurisdiction conferred by the Family Provision Act. This gap may occur in at the date of death, the de facto couple had separated and the survivor had not applied for an order for the adjustment of property. A survivor who cannot establish sometime dependence on the deceased (whether whole or partial) is not eligible to apply for an order under the Family Provision Act and is therefore left to his or her general law remedies, if any, against the estate. This result is a consequence of the scheme of the Family Provision Act and we do not think it appropriate to attempt to overcome it in this Report.

10.33 If, however, a de facto partner applies for adjustment of property and the respondent dies after the application is made, we do not think the proceedings should thereby terminate (abate). We are influenced by the policy to this effect embodied in the Family Law Amendment Bill 1983 ²⁵ and reflected in the Supreme Court Rules. Moreover, since a claim for an interest in property is based on contributions, it is appropriate that the claim once instituted, should proceed notwithstanding the respondents death. Accordingly, we recommend that where the respondent to an application for adjustment of property dies, the proceedings should continue against his or her estate.

2. Death of (Potential) Applicant

10.34 We recommend that, if a de facto partner dies without having instituted proceedings for adjustment of property, the cause of action (assuming it is one) should not survive for the benefit of his or her estate. However, if the applicant dies after proceedings are instituted, we recommend that the proceedings should not abate and should be able to be continued by the applicant’s personal representatives.

C. Applications for Maintenance

1. Death of Respondent

10.35 We recommend that where an application for maintenance is instituted, the proceedings should abate on the death of the respondent, and the applicant should be restricted to a claim under the Family Provision Act, 1982. A fortiori, if proceedings have not been instituted at the date of the (potential) respondent’s death, we recommend that the surviving de facto partner should also be restricted to a claim under the Family Provision Act, 1982. These recommendations are consistent with our view that an order for periodic maintenance should cease to have effect on the death of the person liable to make payments under the order. The recommendations will not, however, prevent an order for the payment of a lump sum (or an order for the transfer of specific property), which has been made on an application for maintenance being enforced against the estate of a respondent who dies after, the order, but before payment. Nor will they prevent the enforcement of a cohabitation or separation agreement which provides that periodic maintenance shall be paid from the estate of one of the partners.

2. Death of Applicant

10.36 Where an applicant for maintenance dies after the institution of proceedings, we recommend that the proceedings should abate.

VII. TRANSACTIONS TO DEFEAT CLAIMS

10.37 Parties to intra-family disputes are often tempted to enter into transactions with other people involving sales, gifts, and the like which are intended to defeat or will have the effect of defeating, the just claims of another party. For the purposes of its proposed powers to make property or maintenance orders, we consider that the court should be given extensive powers to set aside or restrain transactions of this kind. Section 85 of the Family Law Act is in point:

“(1) ... the court may set aside or restrain the making of an instrument or disposition by or on behalf of, or by direction or in the interest of, a party, which is made or proposed to be made to defeat an existing or anticipated order in ... proceedings for costs, maintenance or the declaration or alteration of any interests in property or which irrespective of intention is likely to defeat any such order.

(2) The court may order that any money or real or personal property dealt with by any such instrument or disposition may be taken in execution or charged with the payment of such sums for costs or maintenance as the court directs, or that the proceeds of a sale shall be paid into court to abide its order.

(3) The court shall have regard to the interests of, and shall make any order proper for the protection of a bona fide purchaser or other person interested.”

We recommend that a provision similar to section 85 be adopted in relation to claims by de facto partners for adjustment of property or for maintenance.

VIII. STAMP DUTY ON TRANSFER OF PROPERTY

10.38 Section 74CB of the Stamp Duties Act, 1920, has the effect that a document is exempt from duty to the extent that it makes provision for, or with respect to, the conveyance to the parties to a marriage, or to either of them of matrimonial property. The exemption is conditional upon, among other things, the dissolution of the marriage and the document having been executed for the purposes of or in accordance with an approved settlement or an order of the Family Court. This exemption was added to the Stamp Duties Act in 1982 . In some instances, stamp duty is payable upon the execution of the document but the person paying it becomes entitled to a refund at a later date. We recommend that consideration be given to the granting of a similar exemption with respect to documents executed for the purposes of, or in accordance with, an order of h court made in proceedings between parties to a de facto relationship with respect to the adjustment of property.

IX. COURTS

A. Allocation of Jurisdiction

10.39 To this point we have spoken generally of “courts” and “orders”. We now recommend a framework to be followed in determining which courts should exercise the powers referred to in this Part.

10.40 In our view, both the Supreme Court and Local Courts should be able to exercise the recommended powers to adjust property and to award maintenance. (Local Courts are soon to be established under the Local Courts Act 1982, and, when established, will take the place of Courts of Petty Sessions). The basic jurisdiction should be entrusted to the Supreme Court, partly because the powers we propose are novel and important, and partly because they relate to a jurisdiction to determine property disputes already exercised by the Supreme Court. It will clearly be convenient for that Court to have power to decide all aspects of a dispute between the parties to proceedings. However, we think it is also appropriate that Local Courts should have power to determine claims within their usual jurisdictional limits. This will increase access to the courts, minimise costs and relieve the burden that would otherwise fall on the Supreme Court.

10.41 We think that the allocation of work between the courts could follow the lines suggested by the Family Law Act, which specifies the respective powers of the Family Court of Australia and State courts of summary jurisdiction. We recommend that the allocation of work between the courts should take the following form:

• The Supreme Court should have jurisdiction to exercise all the powers relating to the adjustment of property and the award of maintenance which we have recommended in this Report. Presumably the powers would be exercised by the Equity Division of the Supreme Court.
• Local Courts should have concurrent jurisdiction to make any order open to the Supreme Court, subject to an appropriate jurisdictional limit. That limit should be the maximum amount or value specified for civil claims (currently $5,000). ²⁷
• Where proceedings are instituted in a Local Court with respect to property of a value greater than the limit or claiming a lump sum greater than the limit, the court should, unless the parties agree to the matter continuing, transfer the proceedings to the Supreme Court. ²⁸
• The Local Court should have power of its own motion, notwithstanding any agreement between the parties, to transfer proceedings to the Supreme Court.
• The Supreme Court should have power of its own motion, to transfer proceedings f or the adjustment of property or the award of maintenance to a Local Court where, in the opinion of the Supreme Court, it is appropriate to do so and the claim is within the jurisdiction of the Local Court.

10.42 We consider that, under this framework, few claims within the jurisdictional limit of Local Courts will be determined by the Supreme Court The cost of proceedings in that court will deter minor claims and, in any event, the court would have power to transfer proceedings to a Local Court Similarly, we envisage that few, if any, claims for periodic maintenance will be dealt with by the Supreme Court unless claims are made concurrently with other claims for substantial financial adjustment.

B. Enforcement of Orders

10.43 In general, the Rules of the Supreme Court relating to the enforcement of its ordinary judgments and orders will cover the enforcement of judgments given, or orders made, pursuant to the powers we have recommended. To this general statement there is at least one exception. We see a need for the enforcement of orders for the payment of periodic maintenance made by the Supreme Court to be governed by the procedures of the Local Courts rather than by those of the Supreme Court. We therefore suggest that consideration be given to the creation of a system under which orders of this kind would be registered as orders of the Local Court and be enforceable accordingly. ²⁹

10.44 The enforcement of judgments given, or orders made, by Local Courts in the exercise of the powers we recommend calls for brief comment. In our view, a judgment or order for the payment of money could, for the purposes of Division 6 of Part IV and Part V of the Local Courts (Civil Claims) Act, 1970, be deemed to be a judgment. In this way, the enforcement procedures of that Act including, for example, all the provisions relating to the attachment of debts and execution against goods and chattels would attach to orders for, say, the payment of lump sum maintenance. In the case of orders for the payment of periodic maintenance, the enforcement procedure prescribed by the regulations made under the Maintenance Act, 1964, could also serve as a model. For the purposes of the draft Bill attached to this Report, we have adopted the enforcement procedures of the Local Courts (Civil Claims) Act, 1970.

10.45 Where, in the exercise of its adjustive jurisdiction a judgment is given or an order is made by a Local Court which requires a person to do an act or to refrain from doing an act, (that is, other than the payment of money), the position is a little more complicated. We are concerned, for example, with cases where a court may direct a person to deliver a household appliance such as a refrigerator or a washing machine to another person or to refrain from attempting to remove such an appliance from the possession of the other person. There should be means of securing compliance with such orders.

10.46 There are broadly two approaches that can be taken to this problem. Breaches of orders could be dealt with by proceedings for contempt. The Supreme Court has power to punish for contempt and this power extends to cases where a person is guilty of contempt of some other court. ³⁰ The Supreme Court will of course retain its contempt powers, but proceedings for contempt before that court should not be a regular method of enforcing orders of the Local Court. The second approach is to create a specific offence for a wilful breach of or refusal to comply with an order of the court. Such an approach has been taken under the Family Law Act ³¹ and has also been taken in relation to orders made to prevent apprehended violence. ³² We think that a provision of this kind would provide an appropriate means of securing enforcement of an order of a Local Court other than for the payment of money. We recommend accordingly.

X. SUMMARY

10.47 In this Chapter we discuss a number of consequential matters arising from our earlier recommendations concerning financial adjustment. Our principal conclusions are as follows:

• State courts have adequate powers in proceedings between de facto partners to deal with claims by and against third parties.
• Courts exercising the adjustive jurisdiction should have power to adjourn proceedings or make a deferred order. These powers are designed to deal with the case where one party to property or maintenance proceedings has a prospective entitlement to property or other financial resources.
• The court should have a power to adjust the property rights of the partners without making a prior determination of their rights under the general law.
• The court should have power to discharge, vary, suspend, or revive periodic maintenance orders. We recommend automatic termination of such orders on the death of either party, or on remarriage by the party for whose benefit the order has been made. We are equally divided as to the effect on periodic maintenance orders of entry into a de facto relationship by the party for whose benefit the order has been made. Provision is also made for the setting aside of orders in cases of fraud, duress or similar circumstances, or where it is impracticable for the order to be carried out.
• We make detailed recommendations dealing with the effect of death of a party, whether or not the proceedings have been instituted before the party dies.
• Provision is made for the setting aside of transactions designed to defeat claims.
• We recommend that both the Supreme Court and Local Courts should be able to adjust the property rights of the parties and award maintenance. In the case of Local Courts, this should be subject to the relevant jurisdictional limit.
• Generally, orders should be enforced under existing rules of court. However, provision is made for the creation of a specific offence for wilful breach of, or refusal to comply with an order of the court.

1. There is some doubt about the precise scope of this rule. See Re Great Eastern Cleaning Services Pty. Ltd. and the Companies Act [1978] 2 NSWLR 278.

2. (1981) 55 ALJR 233; 33 ALR 631.

3. D. Kovacs, “The Jurisdiction of the Family Court With Respect to Family Companiea” (1982) 8 Adelaide Law Review 163; J H Wade, Property Division Upon Divorce (1982) pp.63-81.

4. Sanders v. Sanders (1967) 116 CLR 366.

5. Ascot Investments Pty.Ltd. v. Harper (1981) 55 ALJR 233, at p.238; 33 ALR 631, at p.641.

6. Smith and Saywell [1980] FLC 90-856.

7. Harris and Harris; Re Banaco Pty. Ltd. (No.2) [1981] FLC 91-100.

8. Gillies and Gillies [1981] FLC 91-054.

9. Crapp and Crapp [1979] FLC 90-615.

10. Woolley and Woolley (No.2) [1981] FLC 91-011.

11. Thomas and Thomas [1981] FLC 91-018.

12. A similar approach has been taken by the Scottish Law Commission in relation to the rights of married spouses under pension schemes. See Scottish Law Commission. Family Law, Report on Aliment and Family Provision (Scot. Law Com. No.67, 1981), p.97.

13. Joint Select Committee on the Family Law Act, Family Law in Australia (1981), vol.1, pp.95-96. The technique has been used by the Family Court Makin and Makin [1980] FLC 90-818.

14. Family Law Amendment Bill 1983, cl.31, inserting a new s.79(5) into the Family Law Act 1975.

15. Crosthwaite and Crosthwaite [1981] FLC 91-082.

16. If the view of two members of the Division on cessation of orders is accepted (see para.10.26) another example would be the case where the custodial parent enters into a de facto relationship. In these circumstances, the partner making the payments could apply to the court for a discharge or variation of the order on the ground of changed circumstances.

17. We exclude the provision relating to withholding of material evidence from the court (Family Law Act 1975, s.83(2)(c)), as the provisions we recommend for setting aside orders on the basis of miscarriage of justice give sufficient protection.

18. Cf. Anast and Anastopoulos [1982] FLC 91-201, where the Full Court of the Family Court assumed that a lump sum order was capable of variation under s.83 of the Family Law Act 1975.

19. See generally Halsbury’s Laws of England (4th ed. 1979), vol.26, para.560, Supreme Court Rules, Part 40, r.9.

20. Family Law Amendment Bill 1983, cl.32.

21. Cf. Family Law Act 1975, s.82.

22. Id., s.82(6).

23. Id., s.82(8).

24. Sims and Sims [1981] FLC 91-072. Many of the relevant, but somewhat inconsistent authorities are reviewed in King v King [1974] Qd. R. 253.

25. A proposed amendment of the Family Law Act 1975 will provide for the continuation of property proceedings where either party to the proceedings dies before they are completed: see clause 31 of the Bill and the proposed section 79(8).

26. Stamp Duties Amendment Act 1982.

27. Courts of Petty Sessions (Civil Claims) Act. 1970. s.12.

28. Cf. Family Law Act 1975, s.46(1).

29. The Supreme Court currently has power to make periodic maintenance orders under the Infants Custody and Settlements Act 1899, s.5(3). As to enforcement see s.10A(3).

30. Supreme Court Rules, Part 55, Div.3. As to contempt under the Family Law Act 1975. see paras.14.17, 14.36.

31. Family Law Act 1975, s.114(4).

32. See paras.14.10, 14.38.