Thursday, 17 May 2007

S 90K defined

In the recent case of S and S [2007] FMCAfam 272, Altobelli FM in the Federal Magistrates Court has said that there are keys differences between sections 79A and 90K of the Family Law Act.

His Honour was dealing with a preliminary point about an application to set aside a binding financial agreement.

Section 79A is the section used to set aside property settlement orders, when for example there has been a fraud or other miscarriage of justice. Section 90K is the similar section dealing with setting aside binding financial agreements.

His Honour said:

(Counsel for) the wife… submitted that in the same way as a s.79A application is often dealt with at the same time as a s 79 application (even though the latter is dependent on the success of the former) the same should apply in relation to s.90K….

(T)here are some essential differences between s.79A and s.90K that lead me to conclude that the section 90K application should be dealt with as a discrete issue. The focus of s.90K is on a private agreement entered into between the parties, the purpose of which was to exclude the operation of Part VIII of the Family Law Act. Its essential foundation and basis is in contract and private rights. Section 79A, however, has its essential basis in an order of the court, and whether miscarriage of justice has been caused by various circumstances, or there has been, in the broad sense, an abuse of process such that the exercise of the court’s discretion in making the order has been in some way tainted, vitiated, or affected. In this sense, public rights are effected.

Even though the grounds for setting aside an order under s.79A(1) and setting aside a Binding Financial Agreement under s.90K(1) have some similarity, the essential nature of these sections is entirely different.

This essential difference is demonstrated by fact that there is no equivalent of s.90K as regards section s.79A. The other significant difference is that the concluding words of s.79A(1) ….expressly provides that if the court does vary or set aside the order under s.79A "if it considers appropriate" the court may "make another order under s.79 in substitution for the order so set aside." It is quite possible that the concluding words to s.79A(1) explain the practice that did develop in the Family Court for the s.79A application to be dealt with at the same time as a s.79 application, assuming the former was successful.

However, there is no parallel in this regard with s.90K. If the application is successful, the parties are left with an invalid, unenforceable or ineffective agreement and there is no express statutory power as exists in s.79A to enable a court to exercise s.79 jurisdiction. In this regard s.90K(3) is silent as to the source of the power to make the orders referred to there, and the link between the power to make ancillary orders, and the substantive proceedings to set aside the agreement is not clearly articulated as it is in s.79A(1).


For the full judgment, click here.

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