Monday, 8 September 2008

Queensland: equivalent to s.79(8) means person must be alive when court case starts

Section 79(8) of the Family Law Act allows people to continue claims for property settlement after one of the parties has died. It provides:

Where, before property settlement proceedings are completed, a party to the marriage dies:
(a) the proceedings may be continued by or against, as the case may be, the legal personal representative of the deceased party and the applicable Rules of Court may make provision in relation to the substitution of the legal personal representative as a party to the proceedings;
(b) if the court is of the opinion:
(i) that it would have made an order with respect to property if the deceased party had not died; and
(ii) that it is still appropriate to make an order with respect to property;
the court may make such order as it considers appropriate with respect to:
(iii) any of the property of the parties to the marriage or either of them; or
(iv) any of the vested bankruptcy property in relation to a bankrupt party to the marriage; and
(c) an order made by the court pursuant to paragraph (b) may be enforced on behalf of, or against, as the case may be, the estate of the deceased party.

In the recent Queensland Court of Appeal case of CAG v Public Trustee, the court had to consider the equivalent Queensland provision to s.79(8): s.315 of the Property Law Act.

Section 315 provides:

315 Effect on proceeding of death of party
If a party to a proceeding for a property adjustment order dies before a final order has been made, a court may make an order if it considers--
(a) it would have adjusted interests in property if the deceased party had not died; and
(b) it is still appropriate to adjust the interests despite the death of the deceased party.

Could a claim be started after the respondent had died?

This was the fundamental question that the court had to consider. The caselaw under s.79(8) was clear- the section was to cover those cases where the proceedings had been commenced in the usual way and then, after the case had commenced, one of the parties had died; not where a party was already dead before the case had commenced.

The former de facto wife had commenced proceedings under Part 19 of the Property Law Act after the former de facto husband had died.

The estate of the former de facto husband successfully applied to strike out the de facto wife's claim. She then appealed to the Court of Appeal. She was unsuccessful.

In his judgment, Justice of Appeal Keane noted the report that led to the enactment of the Queensland provision, and that there were similar provisions in NSW, the NT and Victoria.

He held (de Jersey CJ and Fraser JA agreeing):

It seems to me to follow that s 315 applies to proceedings for property
adjustment already on foot and allows them only to continue...

On CAG's
behalf, his Honour's reasoning was criticised as treating s 315 "as a
substantive not merely a procedural regulation where supervening death requires
the proceeding to be reconstituted". But this criticism depends upon the
accuracy of the characterisation of s 315 of the Act as "merely procedural".
This intermediary characterisation of statutory language according to a
procedural/substantive dichotomy is an exercise which is not invited by the
legislation. It is an exercise which affords little assistance in determining
whether the Parliament intended an application under s 283 of the Act to be
available to and against the estates of de facto partners. The simpler, and
better, course is to have regard to the language which Parliament has used and
to give effect to that language.

[19] Approached in this way, s 315 does
tend to confirm that the right of one party to a de facto relationship to apply
for an adjustment of property rights against the other party to such a
relationship presupposes that each of these parties is alive.

[20]
Similarly, the terms of s 322 and s 323 of the Act confirm that, while
declarations of pre-existing rights may be made notwithstanding the death of one
of the parties to the de facto relationship, the possibility of making an order
for property adjustment where one of the parties to the relationship is deceased
depends on the operation of s 315 of the Act.

[21] Next it should be
noted that the only right created by s 283 is to make an application for an
adjustment, that is to say, to seek an alteration of existing property rights.
If that application is successful, new property rights will be created by
judicial decision, but until that decision is made and the property rights of
the parties are altered, the only relevant right vested in a person who has been
a party to a de facto relationship is a right to make an application. It may be
accepted that, in some statutory contexts, a bare right to apply for
discretionary relief can be described as a "cause of action"; but in the context
of the Act that description is distinctly awkward. The right conferred by s 283
is couched in terms whereby it is exercisable by "a de facto partner" in
relation to the property of "either or both of the de facto partners". It is
impossible to suppose that the right to apply conferred on a de facto partner by
s 283 of the Act could be exercisable by the estate of a deceased de facto
partner; and CAG's Counsel did not suggest otherwise. The reference to the right
of a de facto partner to apply under s 283 of the Act must be to a living de
facto partner. There is no reason evident from the text of the Act to treat the
later reference in s 283 to de facto partners as having a different and more
expansive meaning encompassing deceased de facto partners.

[22] Thirdly,
quite apart from the actual text of the legislation, it is also important to
recognise that if the position were otherwise, the remarkable result would ensue
that Pt 19 of the Act, which was intended to provide for the adjustment of
property rights as between de facto spouses, would be given a wider operation
than the provisions of s 79 of the Family Law Act in relation to the adjustment
of property rights which the Act was intended to emulate...

[24] The
Explanatory Notes which accompanied the enactment of Pt 19 of the Act stated:
"as the Bill reflects the corresponding provisions of
the Family Law Act 1975 (Cwlth), any court in construing the provisions of the
Bill should have regard to the case law and principles applicable to the Family Law
Act 1975
"and that"the matters to be considered closely reflect the matters
that may be considered by the Family Court under the Family Law
Act 1975
..."[10]

[25] If it were the intention of the legislature
that the operation of s 283 of the Act is to extend to claims against deceased
de facto spouses, one would expect, not only that such an intention would be
made clear by the text of the Act, but also that the intention to achieve that
result would be announced, with the appropriate fanfare, by the explanatory
notes. Moreover, one would expect that there would have been some explicit
reconciliation between the "family provision" regime in s
41
of the Succession
Act
and the property adjustment regime presently under consideration. On the
appellant's view, the two regimes would have an overlapping operation. At the
very least, one would expect some recognition of that overlapping operation.

[26] It should also be noted that the Queensland Parliament enacted Pt
19 of the Act after the decision of Kaye J in Skene v Dale had expounded an
analogous Victorian statute. Kaye J had held that the Victorian analogue of s
283 of the Act does not enable the surviving partner of a "de facto"
relationship to apply for relief after the death of the other. The Victorian
analogue of s 283 provided that a "de facto" partner may apply for an order for
the adjustment of interests with respect to the real property of one or both of
the "de facto" partners.[11]

[27] It is inconceivable that the Queensland
legislature intended to achieve a result different from that reached by the
compelling reasoning of Kaye J, but failed to use language materially different
from that discussed by Kaye J in order to achieve that result.

Fraser JA also held:

(I)t remains the case that the legislative purpose, the statutory context and
the literal meaning all point in the same direction: s 283 does not authorise an
application about the property of the personal representative of a deceased de
facto partner.

[42] An
important factor in the primary judge’s reasoning was the conclusion that the
fact that s 315 confers power to make orders against a deceased de facto partner
only where that partner was a party to a proceeding commenced while he or she
was still alive tells against the existence of an unlimited power to make such
orders. The appellant seeks to avoid that implication by her contention that s
315 is merely, as it was put by her senior counsel, a "procedural regulation
where supervening death requires the proceeding to be reconstituted".

[43] There was no need for the legislature to enact any “procedural
regulation” of the kind upon which the appellant’s contention is premised
because the necessary procedure has long been provided in the rules of court.[15] Consistently with the presence of that long standing form of
regulation, s 315 does not in fact specify any “procedure” to be adopted as a
result of a death occurring after the commencement of an application. Rather, it
defines the approach the court is required to adopt when it is deciding whether
or not to make a property adjustment order.

[44] That is relevant to
another feature of the statutory scheme that provides powerful support for the
primary judge’s conclusion: the statutory criteria with reference to which an
application under s 283 must be considered imply that both de facto partners
remain alive when the property adjustment order is made.

[45] In
deciding what order is "just and equitable" s 286(2) requires the court to
consider a variety of matters, including the financial and non-financial
contributions made by or for the de facto partners or a child of those partners
(s 291) and the contributions made by those persons to the welfare of the de
facto partners or their family (s 292).

[46] More importantly for
present purposes, other criteria focus upon the present and future financial
position and personal welfare of each of the de facto partners. Thus s 293
requires the court to consider the effect of any proposed order on the earning
capacity of the de facto partner. Similarly, amongst the matters that s 296
requires the court to consider to the extent that they are relevant in deciding
what order is just and equitable are: "the age and state of health of each of
the de facto partners" (s 217); their income, property and financial resources
and capacity for appropriate gainful employment (s 298); whether either de facto
partner has the care of a child of the de facto partners (s 299); the de facto
partners' commitments (s 300); the responsibilities of either of them to support
another person (s 301); and, if the de facto partners have separated, "what
standard of living is reasonable for each of them" (s 303). Those criteria are
capable of sensible application only upon the premise that both de facto
partners are alive.

[47] Nor, contrary to a submission made for the
appellant, does s 315 detract from the resulting implication that s 283 only
authorises an application for a property adjustment order where both parties are
alive when the application is made. As I mentioned earlier, where s 315 applies
it defines the approach that the court is required to adopt when it is deciding
whether or not to make a property adjustment order. In that exceptional case, s
315(a) requires the court to embark upon the hypothetical exercise of
determining whether or not it would have made a property adjustment order “if
the deceased partner had not died”. Thus s 315 operates in a way that is
consistent with the statutory command in s 286(2) that, in deciding what is just
and equitable, the court “must” consider criteria which are premised upon both
de facto partners being alive. However, s 283, which the appellant must invoke
to justify her application, plainly does not permit the court to adopt the
special hypothesis exceptionally required by s 315.

[48] The clear implication is that, other than for the
exceptional case in which s 315 applies, an application for a property
adjustment order must be determined during the joint lives of the de facto
partners.[16] That being so, s 283 should not be construed as authorising
the making of an application for a property adjustment order after the death of
either of the de facto partners.

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