Bills Digest No. 124 2003-04
Family Law Amendment Bill 2004
WARNING:
This Digest was prepared for debate. It reflects the legislation as
introduced and does not canvass subsequent amendments. This Digest
does not have any official legal status. Other sources should be
consulted to determine the subsequent official status of the
Bill.
CONTENTS
Passage History
Purpose
Background
Main Provisions
Concluding Comments
Endnotes
Contact Officer & Copyright Details
Passage History
Family Law Amendment Bill
2004
Date Introduced:
1 April 2004
House: House of Representatives
Portfolio: Attorney-General
Commencement:
The formal provisions
commence on the day when the proposed Act receives Royal Assent.
Schedule 1 commences 28 days after the Act receives Royal
Assent.
The Bill seeks
to amend the Family Law Act 1975 ( the Act ) for several
purposes. Among other purposes, it amends existing provisions
dealing with appeals, vexatious litigants, offers of settlement and
transfer of matters from State courts. It also simplifies the
language of the Act (for example, by replacing reference to
dissolution of marriage with divorce ), and gives effect to some of
the recommendations contained in the Joint Taskforce Report on the
Use of Bankruptcy and Family Law Schemes to Avoid Payment of Tax
(2002).(1)
The most significant amendment made by the
Bill is to give effect to some of the recommendations contained in
the Joint Taskforce Report on the Use of Bankruptcy and Family Law
Schemes to Avoid Payment of Tax (2002). According to the
Attorney-General s website, the taskforce was formed by the [then]
Attorney-General and the then Assistant Treasurer in March 2001 to
consider the activities of some barristers who have repeatedly used
bankruptcy as a means of avoiding payment of tax .(2)
The recommendations relate to the rights and standing of
third-party creditors in family law proceedings and are contained
in items 20 22 and 143 147 of Schedule 1 to the
Bill. The recommendations are of general application; they are not
restricted to the activities of barristers.
Specifically, Recommendation 7 provided:
It is recommended that s.106B of the Family Law
Act be widened to allow third parties to apply to the court for an
order or injunction preventing the disposition of property pending
an application to set aside or overturn a s.79 order.
Paragraph (b) of Recommendation 8
provided:
(b) the Family Law Act be amended to include
provision for notice to be provided to affected third parties in
matters involving property orders.
Recommendation 10 was as follows:
It is recommended that there be a separation
declaration for financial agreements generally not only for
superannuation agreements, to ensure that financial agreements are
not entered into by couples for the purposes of avoiding
creditors.
While the Attorney-General stated that [some]
of the provisions in this Bill relate to matters raised by the
House of Representatives Standing Committee on Family and Community
Affairs in its Every Picture tells a Story report , the
Bill does not implement the recommendations of that
Committee.(3) It can be said that the Bill does give
effect to some of the themes raised by the Committee, in terms of
simplifying language and providing litigants (particularly
self-represented litigants) with greater access to justice. For
example, the Bill extends the types of matters where arbitration is
permitted under the Act (see items 15 18) and
permits State courts of summary jurisdiction to transfer family law
proceedings to the Federal Magistrates Court (as well as the Family
Court of Australia and the Supreme Court of a State or Territory)
(see items 28 35). It also extends the types of
applications concerning the conduct of an appeal which may be heard
by a single judge of the Appeal Division (see item
24) and deals more comprehensively with vexatious
litigants than the present Act (see item 137).
The Bill is organised by subject matter. There
are therefore 19 parts to Schedule 1 to the Bill. Some provisions
of the Act are dealt with in one or more of those parts to the
Bill. For example, section 106B of the Act (which deals with
transactions to defeat claims) is dealt with in Part 7 of the Bill
(Definitions of disposition) and Part 19 (Interaction of family law
and bankruptcy law).
Part 1 (items
1-4) deals with contravention of parenting orders.
Item 1 amends section 65F of the Act to
provide that the general power of the court to require parties to
attend counselling before a parenting order is made extends to
proceedings for the enforcement of a parenting order and
proceedings where contravention of a parenting order is alleged.
Item 2 amends section 65LA to provide that
the power of the court (in proceedings for a parenting order) to
require parties to attend a post-separation parenting program
extends to proceedings for the enforcement of a parenting order and
proceedings where contravention of a parenting order is
alleged.
Item 3 inserts
proposed Subdivision AA of Division 13A of Part
VII of the Act. Part VII deals with children. Division 13A sets out
the consequences of failure to comply with orders and other
obligations that affect children. Proposed Subdivision
AA deals with the court s powers where contravention
without reasonable excuse is not established. It comprises one
provision: proposed section 70NEB. Where, in
proceedings alleging contravention of a parenting order,
either the court is not satisfied that contravention
occurred or the court is satisfied that contravention
occurred but the respondent had a reasonable excuse,
proposed subsection 70NEB provides that the court
may vary the parenting order. This seems to be a sensible
provision, which may have the effect of providing the court with
the opportunity of clarifying or varying an earlier, possible vague
or unworkable, order. It may also eliminate the opportunity for
further contraventions and court proceedings.
Notably, by item 4, the
amendments made by Part 1 have retrospective
application. In other contexts, retrospectivity tends to be seen as
an infringement on rights. Here, however, the reason for
retrospectivity is to extend the application of proposed
section 70NEB to existing parenting orders, and thus
to extend the benefits conferred by the provision (by permitting a
judge to vary an order rather than simply dismissing the
application for alleged contravention of a court order).
Item 5 amends subsection
117(2A) which sets out the matters relevant to the making of a
costs order. Item 5 removes the phrase in
accordance with section 117C or otherwise from paragraph
117(2A)(f), but the meaning of the paragraph seems to be unchanged.
The Explanatory Memorandum states that there is no longer a
requirement for [judges] to consider whether the parties have made
an offer of settlement in accordance with section 117C
.(4) However, the words or otherwise in the current
provision already mean that judges do not have to consider whether
any offer of settlement is in accordance with section 117C.
Item 6 amends section 117C,
which deals with offers of settlement. It repeals the whole section
and replaces it with a similar provision written in clearer
language. It removes reference to the filing of notice of offers of
settlement and notices of withdrawal of offers of settlement. Such
matters are now contained in Chapter 10 of the Family Law Rules
2004, which came into effect on 29 March 2004. Chapter 10 is
entitled Ending a case without a trial .
Items 8 and 9 amend sections
70NO and 112AE to provide that where a person breaches a court
order without reasonable excuse and the court sentences the person
to imprisonment, the court may suspend the sentence upon the terms
and conditions determined by the court and also terminate a
suspension. Section 70NO deals with sentences of imprisonment where
a person fails to comply with a parenting order or a compliance
regime. Section 112AE is the general section dealing with sentences
of imprisonment for failure to comply with court orders. The
amendments seem to complement existing sentencing provisions (such
as good behaviour bonds). They also seem to reduce the need for
appeals or the bringing of further court proceedings (if, for
example, the person complies with the order or obligation during
the period of imprisonment).
Items 10 and 11 amend section
70NN, which deals with the procedure for enforcing community
service orders or bonds which have been made where a person has
failed to comply with a parenting order. The amendments remove the
need for an information alleging contravention to be laid before a
magistrate and the need to issue a summons for the defendant to
attend court or to issue a warrant for the person s arrest. While
the amendments simplify the procedure, it is not clear how the
defendant becomes aware of the court proceedings (assuming the
person is not arrested and brought before the court) and/or whether
the enforcement proceedings can occur in the person s absence
(which raises issues of natural justice, particularly the right to
be heard). Such matters are currently covered in subsections
70NN(2) (7) and (10) but are the subject of repeal by items
10 and 11. The Explanatory Memorandum offers no assistance
on this point.
Items 12 and 13 make similar
amendments to section 112AH, which is the general provision
relating to failure to comply with a sentence or order made under
section 112AD. Section 112AD provides for sanctions for
failure to comply with orders.
Item 15 inserts a definition
of Part VIIIA proceedings into section 4, which is the
interpretation section of the Act. Part VIIIA deals with financial
agreements. The term Part VIIIA proceedings is therefore
defined as proceedings in relation to a financial agreement .
Item 16 inserts a definition
of Part VIIIB proceedings into section 4. Part VIIIB deals with
superannuation interests.
(Note that the Explanatory Memorandum has
erroneously reversed the commentary for items 15 and
16.)(5)
Item 17 inserts a definition
of section 106A proceedings in section 4. Section 106A deals with
the execution of deeds or instruments to assist in the enforcement
of court orders. Such instruments include those required to
transfer real estate.
Currently section 19E provides that only Part
VIII proceedings are amenable to private arbitration. Part VIII
deals with property, spousal maintenance and maintenance
agreements. Item 18 amends section 19E to provide
that Part VIII proceedings, Part VIIIA proceedings, Part VIIB
proceedings or section 106A proceedings are all amendable to
private arbitration. Section 19D provides that the court may only
order arbitration with the consent of all parties to the
proceedings. Arbitration may be cheaper and less formal than court
proceedings (for example, if the parties agree, the rules of
evidence do not apply). It may prevent the need for a final court
hearing (trial) and/or reduce delays in the resolution of the
dispute. It may therefore also reduce costs.
Item 19 inserts
proposed section 27A into the Act. It empowers the
court or a judge to change the venue for the conduct of
proceedings. Historically, Order 27 of the Family Law Rules
1984 dealt with applications for change of venue and the
matters which the court should consider in determining any
application. The provisions of former Order 27 were more detailed
than proposed section 27A. The current (2004)
Rules make no reference to change of venue.
As noted in the Background
section to this Digest, Part 7 (being
items 20 22) incorporates one of the
recommendations in the Joint Taskforce Report on the Use of
Bankruptcy and Family Law Schemes to Avoid Payment of Tax (2002).
Item 20 amends subsection 106B(5) to replace
the current definition of disposition (which is currently defined
to include a sale and a gift ) with a more expansive definition
which includes reference to the issue, grant, creation, transfer or
cancellation of an interest in a company or a trust . Item
21 inserts a comprehensive definition of interest into
subsection 106B(5). It is defined to include shares or debentures
in a company; options over shares or debentures; a beneficial
interest in a trust; and any interest in a trust that is
conditional, contingent or deferred .
As mentioned earlier, Part 8
amends the Act to extend the situations where a single judge can
hear an application of a procedural nature in an appeal. Such
applications will include (for example) an application to extend
time in which to file an application for leave to appeal, and an
application to vacate the hearing date of an appeal. Items
23 and 24 amend section 94, which deals with appeals to
the Family Court from courts other than the Federal Magistrates
Court (but including appeals from a decision of a single judge of
the Family Court). Items 25 and 26 amend section
94AAA, which deals with appeals to the Family Court from the
Federal Magistrates Court. Item 27 inserts
proposed section 94AAB, which provides for
the hearing of appeals under section 94 or 94AAA, or applications
under section 94AA for leave to appeal, without an oral hearing if
all parties consent to the appeal or application being dealt with
in that way. These provisions seem to reduce the need for court
hearings and attendance at court, and thereby to reduce costs to
the parties.
As mentioned earlier, Part 9
(being items 28 35) amends section 46 to provide
for the transfer of property proceedings from a State court of
summary jurisdiction to the Federal Magistrates Court (in addition
to the Family Court and the State Supreme Courts). It also amends
section 69N to provide for the transfer of proceedings for a
parenting order. The amendments may have the effect of reducing
delay in having a matter heard (by removing the need for the State
court to transfer the proceedings to the Family Court, which could
then transfer it to the Federal Magistrates Court). The amendments
may therefore also reduce costs (but it may depend on the type of
case and the particular facts of the case).
As mentioned earlier, Part 10
amends various provisions in the Act (particularly sections 4,
48, 55 and 55A) to replace references to dissolution of marriage
with the shorter, and perhaps better known, expression divorce . It
also replaces the term decree nisi (meaning an order which
does not take effect until the happening of a specified event) with
the more common term order .
Item 130 amends section 94AA
to provide a comprehensive table of the requirements for leave to
appeal (particularly whether the Full Court of the Family Court or
a single judge of the Family Court determines the application for
leave to appeal). The amendment does not alter the requirements
currently set out in subsections 94AA(1) (2C), but provides the
same information in tabular form, which may be more readily
understood.
Item 132 inserts
proposed section 96AA to empower a court hearing
an appeal to order the stay or dismissal of the appeal if the
notice of appeal does not disclose proper grounds of appeal
(whether generally, or in relation to a particular ground of
appeal) .
According to the Explanatory Memorandum,
item 132 complements amendments sought to be made
under Part 15 of this Bill in relation to the commencement and
continuation of vexatious proceedings .(6) However, the
amendment seems also to be directed at non-vexatious litigants (and
their legal representatives) by requiring that grounds of appeal be
drafted clearly and concisely; with particularity and precision;
and with an eye to long-established appellate principles and the
law.(7) Seen in this light, the effect of the amendment
may be to reduce court hearing and preparation time, and thereby
costs, not only for litigants but for the court too. If a notice of
appeal discloses proper grounds of appeal, the respondent is in a
better position to know what arguments will be raised and the case
he or she has to meet. Further, the court is in a better position
to assess whether the evidence presented by the parties (including
matters contained in the transcript of the trial at first instance)
establishes the ground or grounds of appeal.
Item 133 provides that the
amendments made by Part 12 have retrospective operation insofar as
they apply to appeals that have already been initiated.
Item 134 amends section 95 of
the Act to provide that an appeal only lies to the High Court from
the Full Court of the Family Court with special leave of the High
Court. Currently section 95 provides that an appeal also lies to
the High Court upon a certificate of a Full Court of the Family
Court that an important question of law or public interest is
involved . According to the second reading speech, the amendment is
made in response to a recommendation by the Australian Law Reform
Commission with the agreement of the High Court and the Family
Court.(8) In practice, the Full Court rarely issued a
certificate under the existing provision. Among other things, one
reason for this fact is the view that it for the High Court to
determine what matters it will hear, rather than the Full Court of
the Family Court usurping that role and determining that an
important question of law or public interest is involved.
Item 135 provides that item 134
applies retrospectively.
Item 136 inserts
proposed Subdivision G of Division 7 of Part VII.
Division 7 deals with child maintenance orders. Proposed
Subdivision G deals with the recovery of amounts paid
under maintenance orders. Proposed section 66X
provides that where a court has made an order that a person pay
maintenance, and the person has paid that maintenance, but the
court later determines that the person is not a parent or
step-parent of the child (and therefore not a person whom the court
can order to pay maintenance), the amount paid may be recovered in
a court having jurisdiction under Part VII of the Act (which deals
with children). There is a similar provision for the recovery of
child support in the Child Support (Assessment) Act 1989.
The amendment enables the person to recover the amount in the
Family Court, Federal Magistrates Court or State court of summary
jurisdiction, instead of taking debt recovery action under State
laws.
Item 137 replaces section 118
with a revised, more detailed, proposed section
118. Section 118 deals with frivolous or vexatious
proceedings. Proposed subsection 118(1) includes
reference to proceedings which may be an abuse of process, as well
as proceedings which are frivolous or vexatious. Proposed
subsection 118(2) provides that if a court is satisfied
that a person has instituted or conducted vexatious proceedings
frequently , a court may restrain the person from filing further
proceedings without leave of the court. The term frequently is not
defined. Proposed subsection 118(3) provides that
the court must give a person reasonable notice of, and a reasonable
opportunity to make submissions in relation to the proposed
exercise of the power under subsection 118(2).
Proposed subsection 118(4) provides that the court
may exercise its powers under subsection 118(1) or (2) on its own
motion or on application by a party or a specified senior court
official. Proposed subsection 118(5) sets out the
matters to which a court may have regard in determining if
proceedings are vexatious. Proposed subsection
118(6) provides that the court may discharge or vary an
order under subsection 118(2). There is no equivalent to
proposed subsections 118(3) (5) in the current
provision, but the amendments seem to add useful guidance and
requirements to the process.
Items 138 and 139 amend
section 117 to insert reference to proposed
subsection 117(1A), which provides that the Rules may
provide in the circumstances specified in the Rules that a party to
proceedings under the Act must bear the costs of another party to
those proceedings unless the court otherwise orders. This amendment
departs from the general rule that each party bears his or her own
costs in proceedings under the Act (see subsection 117(1) although
it should be noted that there are already some exceptions to this
general rule in subsection 117(2)).
Item 140 amends section 123,
which provides that the judges (or a majority of them) may make
Rules of Court which are not inconsistent with the Act.
Item 140 inserts proposed paragraph
123(1)(ta) to provide that the judges may make Rules
providing for civil penalties for failures to comply with the
standard Rules of Court . Any such Rules would be subject to
disallowance by Parliament.
Part 18 (being item
142) extends the powers of judicial registrars to include
the power (in proposed section 70NEB) to vary an
order in contravention proceedings where contravention without
reasonable excuse is not proved (see item 3
above).
As mentioned in the
Background section to this Digest, Part
19 gives effect to at least two recommendations contained
in the Joint Taskforce Report on the Use of Bankruptcy and Family
Law Schemes to Avoid Payment of Tax (2002). Part
19 entitles a third party creditor to become a party to
proceedings if the creditor may not be able to recover his or her
debt if the order for property settlement were made
(proposed subsection 79(10)). It also entitled any
other person whose interests would be affected by the making of the
order to become a party to proceedings for an order for property
settlement (also proposed subsection 79(10)). It
also provides that a third party creditor who may not be able to
recover his or her debt because an order for property settlement
was made under section 79 may become a party to proceedings
under section 79A to set aside the property settlement order.
It inserts proposed section
79F to provide that the Rules of Court may make provision
for a person applying for an order under Part VIII of the Act to
give notice of the application to third-party creditors
(item 145). It also inserts proposed
section 90DA to provide for the need for a separation
declaration to be made in order for certain provisions of a
financial agreement to take effect (item 146).
Proposed subsection 90DA(3) provides that the
declaration must be signed by at least one of the parties to the
financial agreement. Proposed subsection 90DA(4)
provides that the declaration must state that the parties have
separated and are living separately and apart at the time of the
declaration, and that in the opinion of the party making the
declaration, there is no reasonable likelihood of cohabitation
being resumed .
Finally, Part 19 amends
section 106B to permit a third-party creditor or a person whose
interest would be affected by the making of a disposition, to apply
to the court to restrain the making of (or to set aside) an
instrument or disposition made to defeat claims under the Act
(item 147).
While the amendments in Part
19 may also have other purposes, they seem to be directed
to protecting the rights of third party creditors by preventing
debtors (who are otherwise in ongoing marriages) from transferring
assets to their spouses by way of sham transactions designed to
defeat the interests of genuine creditors.
The Bill
amends various provisions in the Act, either to insert new
provisions where there have been gaps or to clarify or improve
existing provisions. The most substantial amendments relate to the
interrelationship between bankruptcy and family law; vexatious
litigants and appeals. None of the amendments seems
controversial.
-
The report is available electronically at:
http://www.ag.gov.au/www/rwpattach.nsf/viewasattachmentPersonal/1A2C7BFEEC7AB954CA256D1900822B9D/$file/2FINAL%20REPORT%2002.02%20FOIXXX.pdf.
-
http://www.ag.gov.au/www/legalservicesHome.nsf/Alldocs/0746790AD
C20FB5ECA256C770004A5E4?OpenDocument&highlight=use%20of%20bankruptcy.
-
Philip Ruddock MP, Attorney-General, Second reading speech:
Family Law Amendment Bill 2004 , House of Representatives,
Debates, 1 April 2004, p. 26 644. The report by the House
of Representatives Standing Committee on Family and Community
Affairs, Every picture tells a story: Report on the inquiry
into child custody arrangements in the event of family
separation is available electronically at:
http://www.aph.gov.au/house/committee/fca/childcustody/report/fullreport.pdf.
-
Explanatory Memorandum to the Family Law Amendment Bill 2004, p.
5.
-
Explanatory Memorandum to the Family Law Amendment Bill 2004,
pp. 6 7.
-
Explanatory Memorandum to the Family Law Amendment Bill 2004, p.
23.
-
For a discussion of appellate principles, see, for example, the
decision of the High Court of Australia in House v The
King (1936) 55 CLR 499 at 504-505, available electronically at
http://www.austlii.edu.au/cgibin/disp.pl/au/cases/cth/high%5fct/55clr499.html?query=title+%28+%22house+v+the+king%22+%29.
-
Philip Ruddock, Attorney-General, Second reading speech: Family
Law Amendment Bill 2004 , House of Representatives,
Debates, 1 April 2004, p. 26 645. See also Australian Law
Reform Commission, Report 92: The Judicial Power of the
Commonwealth: A Review of the Judiciary Act 1903 and Related
Legislation, Chapter 19: Appellate Jurisdiction of the High
Court at paragraphs 19.30 19.54. The report is available
electronically at:
http://www.austlii.edu.au/au/other/alrc/publications/reports/92/ch19.html#Heading9.
Morag Donaldson
22 April 2004
Bills Digest Service
Information and Research Services
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ISSN 1328-8091
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