Dewar v Dewar [1960] HCA 79; (1960) 106 CLR 170 (10 November 1960)

HIGH COURT OF AUSTRALIA

DEWAR v. DEWAR [1960] HCA 79; (1960) 106 CLR 170

Matrimonial Causes (Q.)

High Court of Australia

Dixon C.J.(1), Kitto(1) and Menzies(1) JJ.

CATCHWORDS

Matrimonial Causes (Q.) - Settlement of property - Post-nuptial - Dissolution of marriage - Variation of settlement - Petition - Making of order - Matters to be considered - The Matrimonial Causes Act of 1875 (Q.), s. 9.

HEARING

Brisbane, 1960, June 29, 30;

Sydney, 1960, November 10. 10:11:1960

APPEAL from the Supreme Court of Queensland.

DECISION

November 10.

THE COURT delivered the following written judgment:-

This is an appeal from an order made by Mack J. in the exercise of the power (Q.). So far as material that section provides that the Court may within two years after pronouncing a final decree for dissolution of marriage inquire into the existence of post-nuptial settlements made on the parties whose marriage is the subject of the decree or either of them and may make such orders with reference to the application of the whole or a portion of the property settled for the benefit of the parties to the marriage or their respective children or any or either of them as to the Court shall seem fit. The parties to the present proceedings were married on 7th June 1947. There are four children of the marriage aged respectively twelve, nine, seven and four years. On 18th March 1958 the wife obtained a decree or judgment nisi for dissolution of marriage on the ground of adultery and the decree nisi was made absolute on 30th June 1958. On 8th August 1949 a piece of land at Chermside, Brisbane, was purchased for the sum of 400 pounds and transferred into their names as joint tenants. Upon this land a house was erected which formed the matrimonial home. On 21st April 1953 a piece of vacant land at Burleigh, Brisbane, was purchased for the sum of 185 pounds and transferred into their names as joint tenants. By a petition dated 24th November 1958 the defendant in the divorce suit, that is the divorced husband, petitioned under s. 9 of the Act of 1875 for such orders with reference to the application of the whole or a portion of the foregoing pieces of property for the benefit of the parties to the marriage or their respective children or any or either of them as to the Court should seem meet. The petition alleged that the dealings with the land were in the nature of a continuing provision for the future needs of the plaintiff in the suit for divorce in her character of wife of the defendant and constituted a post-nuptial settlement. This allegation was expressly admitted by the plaintiff in her affidavit answering the petition but eventually an argument to the contrary was advanced, at all events before this Court. The order under appeal was made by Mack J. upon the petition. The order took into account the existence over the house and land at Chermside of a mortgage to the Director under the War Service Homes Act. The order directed that subject to his consent to the transfer of that property the Court extinguished the interest of the now appellant in the house and the land and that her interest in the land at Burleigh also be extinguished. The order proceeded to impose a condition. The condition, in respect of the house and land at Chermside, was that the now respondent should first pay the now appellant 250 pounds and with respect to the land at Burleigh that he should first pay her 100 pounds. The effect of the order would be, in other words, that for her undivided half interest in the matrimonial home and the vacant land the appellant as the former wife of her divorced husband would receive from him 350 pounds. The appellant and the four children of the marriage have continued to occupy the home in Chermside and it appears that Hanger J. made an order for maintenance on 29th July 1958, on the footing that they would remain there. The exact text is not before us but according to an affidavit the order referred to the fact that the appellant was to live rent free in the former matrimonial home. Doubtless the order was made under s. 27A of The Matrimonial Causes Jurisdiction Act of 1864 as amended. The respondent in an affidavit sworn in support of his petition under s. 9 said that he had no intention of selling the home at Chermside and intended it to serve as a home for the appellant and her children in her care. The affidavit continued, "I am obliged to provide the plaintiff" (the now appellant) "and the children in her custody with suitable shelter but I object to the provision of further capital for her benefit". The order under appeal however contains no condition against the possibility of his selling the house or of his excluding the appellant and the children from it and obviously their continued occupancy is an assumption upon which the amounts fixed in the order for maintenance depend. That order is for 16 pounds a week made up it is said of 2 pounds 10 s. Od. for each of the four children and 6 pounds for the appellant. In addition the appellant received 1 pounds 15s. Od. a week as child endowment. The family business of the respondent is conducted by a company called A.S. Dewar & Sons Pty. Ltd. which was registered in 1957 and his affidavit contains a statement that in order to provide for the future of his children he entered into a contract to sell to the children about one-fourth of his interest in the form of shares (1000 1 pounds shares each) and that he intended to forgive the payment of the price for such shares from time to time as he is able and that the price would be further reduced by dividends declared in respect of the shares. The value of the house in Chermside is not stated very specifically but the respondent said that without furniture or fittings he imagined the value to be somewhere between 2,500 pounds and 3,000 pounds, and with furniture and fittings about 5,000 pounds or 5,500 pounds. The cost of the property when the house was built he put down as 4,000 pounds. There is some dispute as to what if any contribution the appellant made towards the cost of the house but substantially the money came from the respondent's side. From the Director of War Service Homes 2,750 pounds was borrowed on mortgage for the purpose of erecting the building; as at 30th September 1959 the amount owing under the mortgage was 2,587 pounds. Clearly enough the appellant took her undivided half share in the property as beneficial owner. (at p173)

2. The respondent remarried. His present wife has two children by a previous marriage. The financial position of the respondent is not completely clear; but his capital seems to consist of his shares in A.S. Dewar & Sons Pty. Ltd. and certain investments in land. His income appears to come from that company and to take the form of 35 pounds per week wages together with his share of the distributions of profits the company may make from time to time. (at p173)

3. It seems unnecessary to set out more of the circumstances of the present case. They raise more than one difficulty. At the outset there is the question whether the transfer of the land at Chermside into the joint names and the subsequent erection of the matrimonial home upon the land amounted to a settlement. The acquisition of the land at Burleigh presents a similar question. A very wide meaning has been given in England to the provision standing in Queensland as s. 9 of The Matrimonial Causes Act of 1875; the authorities by which this was done are collected and discussed in the judgment of Philp J. in Pattison v. Pattison (1954) QSR 238 , who following the reasoning in Court v. Court (1949) QSR 262 and in Gilbert v. Gilbert (1954) QSR 200 held that land acquired by husband and wife as joint tenents for the purpose (which was carried out) of building a home was "settled" within the meaning of s. 9. The English decisions however upon which this conclusion was based together with the decision of Hubbard v. Hubbard (1901) P 157 , which in the past has been considered perhaps to be out of line with them, have since been reviewed by the Court of Appeal in Prescott (formerly Fellowes) v. Fellowes (1958) P 260 . That case tends no doubt to narrow the application of the word "settlement" in s. 9. It must be conceded that in applying the provision the conception of "settlement" had been carried to lengths which might seem a little surprising. But it must be borne in mind that the essential purpose of s. 9 is to enable the Court to inquire into post-nuptial and ante-nuptial dispositions of property in favour of one or other or both of the parties to the marriage which because of the dissolution of that marriage should be reconsidered and to empower the Court to make orders for what appears in the changed circumstances a just application of the property. In a case such as the present there are no trusts, no successive interests and no express limitations tending against mere alienation. But joint ownership in itself means a fetter upon the alienation of the entirety. For it can be done only by both parties. It means, unless it be severed, inheritance by survivorship. The surrounding circumstances show that the land was bought and the house built as a future or continued provision for them both and that joint owner-ship was adopted as the appropriate expression for the provision. Upon such facts it does not seem to go too far to regard the transfer to joint ownership as a "settlement" within the intendment of s. 9. In any case it is not desirable that the decisions of the Supreme Court to that effect should be reconsidered in the present case. For the final conclusion we have reached in the appeal makes it unnecessary to decide the question. Moreover it must not be forgotten that at first the fact that the dispositions formed settlements was admitted so that it was not considered by Mack J. Perhaps a further consideration is that s. 86(2) of the Matrimonial Causes Act 1959 of the Commonwealth and not s. 9 of The Matrimonial Causes Act of 1875 (Q.) will very soon be the operative provision upon which the jurisdiction to review settlements will depend. On the assumption which we accordingly make that the two properties are the subjects of "settlements" within the meaning of s. 9 it becomes necessary to consider the effect of the order appealed from and the question whether upon the materials before the Court it forms a satisfactory adjustment of the interests of the former husband and wife and of the children of the marriage. It will be seen from the terms of the order that its operation depends upon the consent in writing of the Director of War Service Homes. It is evident that the respondent must be an "eligible person" within the definition of that expression in s. 4 of the War Service Homes Act 1918-1956. Section 4A of that Act enables the Director to treat the wife of an eligible person and the eligible person as together forming an eligible person: they may be in that character joint tenants (sub-s. (3)) and if the land which they own as joint tenants is subject to a mortgage under the Act a transfer of any interest or share of the husband or wife shall not have any force or effect unless it is made with the consent of the Director (sub-s. (4)). Section 35(1) contains a more general provision which may also apply but, assuming the respondent to be an eligible person it perhaps adds nothing to the reasons for inserting the condition in the order. Unfortunately there is no report before this Court of the reasons of Mack J. for making the order. It is apparent however that as to the property at Chermside the order depends upon the manner in which the Director exercises his discretion. But the order as to the land at Burleigh is not so dependent. Apparently whatever the Director may decide, the appellant is to receive 100 pounds for her interest in the land at Burleigh, whereupon her interest would be extinguished; but whether she loses her interest in the matrimonial home at Chermside and receives for it 250 pounds rests with the Director. This seems anything but satisfactory. But what creates a greater difficulty is the fact that there is nothing to secure the occupancy of the house by the appellant and her children and yet the amount fixed for their maintenance is based on the supposition that they will continue to occupy the house as their home. The amount of 250 pounds or for that matter 350 pounds is not adequate as the value of the appellant's interest and it certainly would not make up what she would lose if she and her children were turned out of the dwelling. It is not possible, at all events in the present proceedings, to increase the amount of maintenance. Considering all these elements in the case the operation or possible operation of the order upon the appellant and her children seems to leave her in a position of greater insecurity than she is entitled to expect and indeed to put her interests in real jeopardy. After all, the transfer into the joint names of the respondent and herself was for the purpose of giving her protection against the mischances of life, and the mischance that has occurred is the result of the matrimonial wrong that he committed. (at p175)

4. The order ought, we think, to be set aside. The question whether any and what order should be made in its place is one to which we have given much consideration. In the end we have reached the conclusion that the only practicable course is to allow the "settlements" to stand without interference and to dismiss the respondent's application. The appeal should be allowed with costs and the order appealed from set aside. In lieu thereof it should be ordered that the motion to the Supreme Court pursuant to the notice of 25th August 1959 and the petition dated 24th November 1958 stand dismissed with costs. (at p176)

ORDER

Appeal allowed with costs. Order of Supreme Court of Queensland set aside. In lieu thereof order that the motion to the Supreme Court pursuant to the notice of 25th August 1959 and the petition dated 24th November 1958 be dismissed with costs.