Orders relating to partnership property between spouses must be framed in terms of the parties' interests in the partnership rather than seeking orders affecting partnership assets directly, and partnership dissolution must be pursued in State courts.
Later decisions that cite R v Ross-Jones; Ex parte Beaumont
Decisions cited by R v Ross-Jones; Ex parte Beaumont
THE QUEEN v. ROSS-JONES; Ex parte BEAUMONT [1979] HCA 5; (1979) 141 CLR 504
Matrimonial Causes - Mandamus
High Court of Australia
Gibbs(1), Stephen(2), Jacobs(3) Murphy(4) and Aickin(5) JJ.
CATCHWORDS
Matrimonial Causes - Family Court of Australia - Powers - Dissolution of marriage - Property of parties to marriage - Partnership between husband and wife - Appointment of receiver of partnership assets - Accounts - Family Law Act 1975 (Cth), ss.4 (1) "matrimonial cause" (ca), 8, 31 (1)(a), 33, 34(1), 78, 79 (1), 80, 81, 94.Mandamus - Discretion - Determination by court that it had no jurisdiction to make orders - Order to that effect pronounced by consent of parties - Family Court of Australia - Right of appeal to Full Court.
HEARING
Sydney, 1978, August 14.DECISION
1979, Feb. 20."1. STARLETTE ANNE BEAUMONT applies for the following declarations:terms of which are contained in Articles of Partnership dated 15th April 1976 exists.
(a) That the Partnership between the Applicant and the Respondent, the
(b) That the said partnership has not yet been determined.Receiver of the said partnership.
2. STARLETTE ANNE BEAUMONT applies for the following orders:
(a) That Mr. John Edward Walker, Official Liquidator, be appointed
(c) That the Receiver prepare partnership accounts.Trustees of the Trust created by Deed dated 2nd February 1976.
(d) That the Respondent pay the Applicant's costs.
(e) That Paul Thomas Cambage Wenham and Thomas Henry Waters be removed as
2. Jurisdiction is conferred on the Family Court by s. 31 of the Family Law
Act 1975 (Cth), as amended ("the Act"). So far as is
relevant for present
purposes, that court has jurisdiction in matrimonial causes instituted
under
the Act: s. 31 (1) (a). The expression
"matrimonial cause" is defined in s. 4
(1) of the Act to includel 70390 70430
"(ca) proceedings between the parties to a marriage with respect to the
property of the parties to the marriage or of either
of them, being
proceedings in relation to concurrent, pending or completed proceedings for
principal relief between those parties."
In addition jurisdiction is conferred on the Court by s. 33 which provides as
follows l 74180
"To the extent that the Constitution permits, jurisdiction is conferred
on the Court in respect of matters not otherwise within the jurisdiction
expressed by this Act
or any law to be conferred on the Court that are
associated with matters (including matters before the Court upon an appeal) in
which
the jurisdiction of the Court is invoked or that arise in proceedings
(including proceedings upon an appeal) before the Court."
The effect of this section is far from clear. It cannot be intended to mean,
and would not be constitutionally valid if it did mean,
that if the
jurisdiction of the Court is unsuccessfully invoked it nevertheless has
jurisdiction in associated matters. The section
can only apply if the Court
already has jurisdiction; its jurisdiction is then extended, so far as is
constitutionally permissible,
to associated matters. There appears to be a
distinction between the jurisdiction conferred by s. 31 (1) (a) and that
conferred by
s. 33. By s. 8 (1) of the Act proceedings by way of a matrimonial
cause shall not be instituted except under the Act, or in other
words, only in
a court specified in s. 39. Now that a proclamation has been made under s. 40,
a matrimonial cause may not be instituted
in a Supreme Court of a State. If,
however, by reason of the operation of s. 33, a Family Court has jurisdiction
in respect of an
associated matter that is not itself a matrimonial cause, the
provisions of s. 8 (1) do not apply, and other courts are not deprived
of
jurisdiction in respect of the associated matter. However, s. 33 appears to be
of no practical importance in the present case.
(at p509)
3. Once a proceeding is within the jurisdiction of the Family Court, the power of that Court to make suitable orders for the disposition of the matter is very wide. It is hardly an exaggeration to say that if the Court has jurisdiction in the present case, it can make whatever orders it regards as appropriate: see s. 34 (1) and s. 80 (k). Of course the fact that a court has wide powers when exercising its jurisdiction does not mean that its jurisdiction is wide. Nevertheless the nature of the powers of a court may sometimes provide a clue to the extent of its jurisdiction. By s. 78, in proceedings between the parties to a marriage with respect to existing title or rights in respect of property, the Court may declare the title or rights, if any, that a party has in respect of the property, and may make consequential orders. Section 78 (3) provides as follows: "An order under this section is binding on the parties to the marriage but not on any other person." By s. 79 in proceedings with respect to the property of the parties to a marriage or either of them, the Court may make an order altering the interests of the parties in the property, including an order for a settlement of property or a transfer of property. By s. 80 the Court, in exercising its powers under Pt VIII (which deals with maintenance and property), may appoint or remove trustees (par. (e)), and may "make any other order ... which it thinks it is necessary to make to do justice" (par. (k)). In proceedings under Pt VIII, other than proceedings under s. 78 or proceedings with respect to maintenance payable during the subsistence of a marriage, the Court is required, so far as practicable, to "make such orders as will finally determine the financial relationships between the parties to the marriage and avoid further proceedings between them" (s. 81). (at p510)
4. These sections are expressed to confer powers which the court may exercise if it has jurisdiction, rather than to confer or expand jurisdiction, and I do not regard them as throwing any light on the extent of the Court's jurisdiction. Before the powers which they grant may be exercised there must be a "matrimonial cause" within par. (ca) of the definition. Before that definition was inserted by the Family Law Amendment Act 1976 (Cth) it had been held in Russell v. Russell [1976] HCA 23; (1976) 134 CLR 495 that s. 78 was only valid in so far as the proceedings were brought to obtain relief as ancillary to proceedings of the kinds referred to in pars. (a) and (b) of the definition of "matrimonial cause". The amendment achieves a similar result. The proceedings which the judge declined to entertain in the present case were within the jurisdiction of the Family Court only if they came within par. (ca) of the definition, or, in other words, if they were proceedings (i) between the parties to a marriage (which includes the parties to a marriage that has been dissolved - s. 4 (2) of the Act); (ii) with respect to the property of the parties to the marriage or of either of them; and (iii) in relation to concurrent, pending or completed proceedings for principal relief (which includes proceedings for a decree of dissolution of the marriage) between the parties. This latter requirement imports that the proceedings in question must bear an appropriate relationship to the proceedings for principal relief, that is to say, the proceedings with respect to property must be such as can fairly be said to be incidental to the relief obtainable or already obtained in the divorce proceedings: cf. Lansell v. Lansell per Taylor J. [1964] HCA 42; (1964) 110 CLR 353, at p 367 (at p510)
5. It is quite clear that the Family Court has jurisdiction to entertain the proceedings resulting from the amended application that has been filed. By that application the prosecutrix seeks a settlement upon and transfer to her of certain property of the respondent. The proceedings are between the parties to a marriage and with respect to the property of the respondent. They are proceedings in relation to the completed proceedings for principal relief (that is, for a divorce). An application by a divorced wife under s. 79 of the Act for a settlement and transfer of property is an application to the court to make such financial readjustments as may be rendered appropriate by the dissolution of the marriage; it is an application for an order consequential on the dissolution of the marriage, and can properly be said to be incidental to the decree of dissolution that has been obtained: cf. Lansell v. Lansell (1964) 110 CLR, at pp 361-362, 367 The proceedings therefore are a "matrimonial cause" within par. (ca). (at p511)
6. Moreover, once there exists a matrimonial cause within par. (ca) of the definition, the Court has power to grant relief of the kind sought by the original application (except by pars. (e) and (f) of cl. 2 with which we are not concerned and as to which I say nothing). Before the Court can determine what order should properly be made under s. 79, it must in most cases determine what interests in property the parties already have, and where that question arises the court has power to determine it. A similar view was taken of comparable provisions of the Matrimonial Causes Act 1959 (Cth), as amended, in Horne v. Horne (1963) SR (NSW) 121, at p 134 Since the Court can inquire and decide what interests in property the respective parties possess, there is no reason in principle why in an appropriate case it should not also make a declaration as to the rights of the parties or an order for the taking of accounts. For the purposes of ensuring that an order made or proposed under s. 79 is not evaded or frustrated, it may be necessary to make an order appointing a receiver of property, and such an order would also be within power. In Jones v. Jones (1967) 10 FLR 493; (1968) 1 NSWLR 206 , it was held that the Court had power under s. 87 (1) (1) of the Matrimonial Causes Act 1959 (which corresponded to the provisions of s. 80 (k) of the Act) to appoint a receiver and manager of a business conducted by a husband and wife in partnership and to make an order for the taking of partnership accounts. In Dimov v. Dimov (1970) 17 FLR 462; (1971) WAR 113 and Anderson v. Anderson (1972) 19 FLR 480 it was held that the Court had power under s. 87 (1) (1) of that Act to make an order for the winding up of a partnership between the parties to a marriage. There was a difference of opinion between Burt J. in the former case and Joske J. in the latter as to whether the court could make an order directly bearing upon any particular partnership asset; Burt J. held that it could not. The decision reached in these cases, that where there was a partnership of which a husband and his wife were the sole members the court had power, in appropriate circumstances, to appoint a receiver of the partnership business, to order the taking of partnership accounts, and to make an order for the winding up of the partnership, was, subject to the qualifications which I am about to state, correct and applicable to the provisions of the present Act. As to the matter on which Burt J. and Joske J. differed, it seems to me that the court, in making an order under s. 79, could affect the beneficial interests of the partners in a particular item of partnership property, provided that the interests of creditors were not affected. What is important, however, is that an order for the winding up of a partnership between the parties to a marriage, or for the taking of partnership accounts, or for the appointment of a receiver, can be made by the Family Court only in a matrimonial cause of the kind defined in par. (ca) of the definition, and only in aid of the jurisdiction exercised by the Court in those proceedings: cf. Dimov v. Dimov (1970) 17 FLR, at p 466 . To be specific, the Family Court could make any such order only as a step towards making an order for a settlement or transfer of property under s. 79, but could not make such an order for its own sake. Moreover, as Jacobs J. points out in his judgment in the present case which I have had the advantage of reading, the Family Court has no powers in respect of the law of partnership as such. I agree with the view of Jacobs J. that the Family Court cannot dissolve a partnership with the consequences attendant upon such a dissolution in the way in which the Supreme Court of a State can do so; although it could appoint a receiver of that property of the parties to a marriage which they, and they alone, hold as partners, it cannot appoint a receiver of the assets of a partnership as such; although it could order accounts of the property of the parties to a marriage with particular reference to an account of their property as partners, it cannot order partnership accounts as such. Since orders of this kind may tend to be misleading in form, the greatest restraint should be exercised in making them. (at p512)
7. The proceeding now pending in the Family Court, in which all the relief sought by the application of 8th March 1978 is sought again, is one which the Family Court has jurisdiction to determine. The powers of the Family Court are wide enough to enable it to grant the relief sought if the evidence shows that it is appropriate to do so. In these circumstances it is unnecessary to consider whether that Court had jurisdiction to hear, and power to grant, the application of 8th March 1978. There is nothing on the face of that application to show that the proceedings were of the kind to which par. (ca) of the definition of "matrimonial cause" refers, and the form of the application suggests that the declarations and orders were sought as an end in themselves. It would however be quite academic to pursue that question further. Moreover, the learned judge made his finding that he had no jurisdiction only because counsel for both parties joined in asking him to do so. In a case of this kind the grant of mandamus is a matter for the discretion of the Court. For the reasons I have given, I would refuse mandamus in the exercise of our discretion. (at p513)
8. I would discharge the order nisi, but would make no order as to costs. (at p513)
STEPHEN J. My brother Jacobs has stated one sufficient reason why this Court should refuse mandamus: to it my brother Aickin has added a second, concerned with the circumstances in which the order of the Family Court came to be made. For each of these reasons I would in this case discharge the order nisi for mandamus. (at p513)
2. There is but little which I wish to say about the Family Court's jurisdiction to make the declarations and orders sought of it. I do not doubt that that Court would have jurisdiction, if it saw fit, to make the two declarations in question but I have reservations concerning three of the four orders which have been sought. These ask for the appointment of a receiver of a partnership, the delivery over to him of partnership books of account and assets and the preparation by him of partnership accounts. If these prayers for relief mean what they say, they ask the Family Court to exercise a jurisdiction which it does not possess; my brother Aickin has explained that want of jurisdiction. If they do not, and are instead intended to mean something else, not being concerned with any winding up of a partnership but only with the disposition of the interests of husband and wife as partners in that partnership, then not only are they misleading in form but might prove inexpedient in their intended operation, and this for the reasons explained by Jacobs J. (at p513)
3. The order nisi should be discharged. (at p513)
JACOBS J. This is an application to make absolute an order nisi for mandamus
directed to the Family Court of Australia (Ross-Jones
J.) requiring him to
hear and determine an application by the applicant Starlette Anne Beaumont. In
February 1978 Paul Ernest Beaumont
filed an application in the Family Court of
Australia for dissolution of his marriage with the applicant. Thereafter the
applicant
applied to the Family Court for the following declarations:
"(a) That the Partnership between the Applicant and the Respondent, the
terms of which are contained in Articles of Partnership
dated 15th April 1976
exists.
(b) That the said partnership has not yet been determined."and for the following orders:
(c) That the Receiver prepare partnership accounts.Trustees of the Trust created by Deed dated 2nd February 1976.
(d) That the Respondent pay the Applicant's costs.
(e) That Paul Thomas Cambage Wenham and Thomas Henry Waters be removed as
2. This application and the application for dissolution of the marriage came before Ross-Jones J. on 10th March 1978. Counsel for each party requested the Court by consent to make a formal finding that the Family Court of Australia had no jurisdiction to hear the wife's application. The purpose of the request was in order to have this question of jurisdiction determined in this Court. Ross-Jones J. acceded to the application and made the finding with consequential order. He then dealt with the application for dissolution of the marriage and pronounced a decree nisi. An order nisi for mandamus directed to Ross-Jones J. was made on 21st March 1978. (at p514)
3. The jurisdiction of this Court to grant mandamus cannot be doubted but it would have been preferable if the available procedures of appeal under the Family Law Act ss. 94 and 95 had been utilised. It should not be assumed that this Court will exercise its supervisory jurisdiction under s. 75 (v.) of the Constitution when there are available appellate procedures. When the application to make absolute the order nisi came before this Court counsel for the respondent husband appeared to inform the Court that the respondent did not wish to argue the matter and submitted to such order as the Court might see fit to make. (at p515)
4. The source of jurisdiction in the Family Court to make the declarations
and orders is claimed to flow from s. 31 which gives jurisdiction in
matrimonial causes and par. (ca) of the definition of "matrimonial cause" in
s. 4 (1) which is as follows:
"(ca) proceedings between the parties to a marriage with respect to the
property of the parties to the marriage or of either
of them, being
proceedings in relation to concurrent, pending or completed proceedings for
principal relief between those parties;"
It is necessary to refer also to certain other sections. Sections 33 and 34
are as follows:
"33. To the extent that the Constitution permits, jurisdiction is
conferred on the Court in respect of matters not otherwise within the
jurisdiction expressed by this Act
or any law to be conferred on the Court
that are associated with matters (including matters before the Court upon an
appeal) in which
the jurisdiction of the Court is invoked or that arise in
proceedings (including proceedings upon an appeal) before the Court.
34. (1) The Court has power, in relation to matters in which it has
jurisdiction, to make orders of such kinds, and to issue,
or direct the issue
of, writs of such kinds, as the Court thinks appropriate.
(2) Without limiting the generality of sub-section (1) the Court may
issue, or direct the issue of, writs and orders of such
kinds as are
prescribed."
Section 78 provides:
"(1) In proceedings between the parties to a marriage with respect to
existing title or rights in respect of property, the
Court may declare the
title or rights, if any, that a party has in respect of the property.
(2) Where a court makes a declaration under sub-section (1), it may make
consequential orders to give effect to the declaration,
including orders as to
sale or partition and interim or permanent orders as to possession.
(3) An order under this section is binding on the parties to the
marriage but not on any other person."
Section 79 (1) provides:
"In proceedings with respect to the property of the parties to a
marriage or either of them, the Court may make such order
as it thinks fit
altering the interests of the parties in the property, including an order for
a settlement of property in substitution
for any interest in the property and
including an order requiring either or both of the parties to make, for the
benefit of either
or both of the parties or a child of the marriage, such
settlement or transfer of property as the Court determines." (at p515)
5. Section 80, which is the section dealing with the general powers of the Family Court, provides in par. (k) that the Court, in exercising its powers under Pt VIII - Maintenance and Property may make "any other order (whether or not of the same nature as those mentioned in the preceding paragraphs of this section), which it thinks it is necessary to make to do justice". (at p516)
6. Section 81 provides:
"In proceedings under this Part, other than proceedings under section 78
or proceedings with respect to maintenance payable
during the subsistence of a
marriage, the Court shall, as far as practicable, make such orders as will
finally determine the financial
relationships between the parties to the
marriage and avoid further proceedings between them." (at p516)
7. It is well to make it clear at the outset that the Family Court has not,
and is not suggested to have, any powers in respect
of the law of partnership
as such. The relevant law of partnership is that of New South Wales. The
Family Court cannot dissolve a
partnership with the consequences attendant
upon such a dissolution in the way in which the Supreme Court of a State can
do so. However,
for its own purposes, it can recognize a partnership existing
under the law of New South Wales and the interest of the parties to
a marriage
(or either of them) in such a partnership. For those purposes it can ascertain
the terms of that partnership. By s. 78
(3) its order in these respects would
be binding on the parties to the marriage and on no other person. I can
therefore see no jurisdictional
objection to the declarations sought in the
application to the Family Court. If that Court proposed to exercise its powers
under
s. 79 to alter the interests of the parties to the marriage in that part
of their property which is represented by their interests
in the partnership
it would need to be satisfied that there was a partnership and up to what date
the partnership subsisted or whether
it still subsists. Whether or not a
declaration would be necessary is a different question, but I can see no
objection to the making
of the declaration between the parties to the marriage
if the Family Court sees fit to do so. A disquiet at the thought of making
the
declarations in the form in which they are sought flows from the fact that
superficially they are similar to declarations made
by a court exercising
jurisdiction in that branch of the law which governs the affairs of partners
as such. But the declarations
would have no such purpose or effect in the
Family Court, being no more than declarations between the parties to the
marriage as
to existing rights or titles in respect of property. (at p516)
8. The orders sought likewise bear the same kind of unfortunate resemblance to the kinds of orders which a court would make if it were exercising jurisdiction in the matter of partnership affairs as such. Nevertheless it is necessary to look beneath this form to the substance of the orders in the circumstances of the case. It happens that the only persons having interests as partners in the property of the partnership are in this case the parties to a marriage. If the Family Court proposed to alter the property interests pursuant to s. 79 it would need to know the extent of the respective interests of the parties to the marriage in respect of the property in which they alone have partnership interests. Further, it would be open to the Family Court to make orders by way of injunction or appointment of a receiver in order to protect those interests in property in respect of which it has made, or proposes to make, or even contemplates making, orders under s. 78 or s. 79. (at p517)
9. Taking each of the three orders in turn, there is first an application for an order that Mr. John Edward Walker be appointed receiver of the partnership. To make an order in that form would be most confusing, almost deceptive. The Family Court cannot appoint a receiver of the assets of a partnership as such. However, in this case it could appoint a receiver of that property of the parties to a marriage which they, and they alone, hold as partners. Likewise the Family Court cannot order partnership accounts as such but it can order accounts of the property of the parties to the marriage with particular reference to an account of their property as partners. So also it could order that books of account and assets of the parties to a marriage be handed over to a named person so that he may act as receiver. Whether it would see fit to do so is a different question, particularly as such a receiver would be in a quite different position to a receiver appointed by a court to wind up the affairs of a partnership. He would have no right to determine claims against the partnership or anything of that kind. If a receiver were appointed by a court to wind up the affairs of the partnership, he would be concerned with those matters. He and the Court which appointed him might be vastly incommoded by the fact that for a quite different purpose the Family Court had "frozen" the books of account and the assets by placing them with a receiver appointed by it. However, such a consideration does not go to jurisdiction; it only goes to the way in which the jurisdiction should be exercised. (at p517)
10. Thus I return to the unsatisfactory nature of the course which was here adopted of seeking relief by way of mandamus rather than appeal. On the latter, both matters, namely jurisdiction to make the orders and the appropriateness of the orders, could have been litigated. On the question of jurisdiction, and ignoring the misleading implications in the form of the orders sought, I am of the opinion that the Family Court could between these parties, since they are the only persons who are alleged to be partners, make such orders for its own limited purposes. However, I am of the opinion that mandamus ought not to be granted because I am not satisfied that the remedy by way of appeal under the Family Law Act was any less convenient, beneficial and effective. For the reasons which I have stated I think that the remedy by way of appeal was in the circumstances more convenient, beneficial and effective. The order nisi should therefore be discharged, but I would make no order as to costs. (at p518)
MURPHY J. This application to make an order absolute for mandamus raises the question of the power of the Family Court of Australia to make declarations and orders with respect to the property of the parties to a marriage. (at p518)
2. The Family Law Act 1975, as amended, provides:
"31. (1) The Family Court has jurisdiction in -except under this Act".
(a) matrimonial causes instituted or continued under this Act;
..."
"8. (1) After the commencement of this Act -
(a) proceedings by way of a matrimonial cause shall not be instituted
...property of the parties to the marriage or either of them, being proceedings in relation to concurrent, pending or completed proceedings for principal relief between those parties". (at p518)
(ca) proceedings between the parties to a marriage with respect to the
3. Section 33 provides:
"To the extent that the Constitution permits, jurisdiction is conferred
on the Court in respect of matters not otherwise within the jurisdiction
expressed by this Act
or any law to be conferred on the Court that are
associated with matters (including matters before the Court upon an appeal) in
which
the jurisdiction of the Court is invoked or that arise in proceedings
(including proceedings upon an appeal) before the Court." (at
p518)
4. Although a matrimonial cause may not be instituted in the Supreme Court of
a State in respect of which a proclamation has been
made under s. 40, s. 8
does not extend to those proceedings in which the Family Court has
jurisdiction only by virtue of s. 33. The
Court has wide powers in respect of
the property interests of the parties. It may declare the existing interests
of the parties so
as to bind them, but not any other person (s.78); it may
(where it is just and equitable to do so) alter the interests of the parties
in any property (s.79); in exercising these powers, it may make various orders
specified in s. 80, or make orders and issue writs
of such kinds as it thinks
appropriate under the general powers in s. 84. In proceedings other than for
principal relief, any person
may apply for leave to intervene and the court
may allow intervention (s. 92). (at p519)
5. Section 81 provides:
"In proceedings under this Part, other than proceedings under s. 78 or
proceedings with respect to maintenance payable during
the subsistence of a
marriage, the court shall, as far as practicable, make such orders as will
finally determine the financial relationships
between the parties to the
marriage and avoid further proceedings between them." (at p519)
6. Marriage is an economic as well as a social institution. The power of
Parliament under s. 51 (xxi) of the Constitution to make laws in respect of
marriage extends to laws respecting the property of the parties to a marriage.
The law on property of
the parties to a marriage has for centuries been
regarded as part of the law of marriage. The laws which used to transfer the
wife's
property to the husband and virtually treat her as his property were
part of the laws of marriage (see Family Law in Australia, 2nd
ed. (1978), by
Professor H. A. Finlay, pp. 108-111). The Married Women's Property Acts were
laws with respect to marriage. (at p519)
7. In my opinion, Parliament is not constitutionally confined to legislation dealing with property of the parties only when a divorce or other matrimonial cause is instituted; it may deal directly with the property interests or confer jurisdiction on a court to deal with those interests according to criteria sufficiently precise or ascertainable to amount to an exercise of judicial power. Under the marriage power, Parliament could, for example, enact that upon marriage (or five years after marriage, or on the birth of the first child of the marriage, or immediately before termination of marriage by divorce or death), all (or some) of the property of the parties becomes communal property of the spouses. (at p519)
8. In legislating under the marriage power, in regard to the property interests of the parties, Parliament is not confined to the interstices of State law. There may be a variety of arrangements under which parties to a marriage have property interests in respect of which third parties are concerned. In a sense, all property consists of sets of rights and obligations affecting others. There is nothing sacrosanct about the law of partnership which puts a partnership between the parties outside the marriage power. (at p520)
9. Parliament has conferred very wide powers on the Family Court to declare or alter the property interests of the parties. Its powers under s. 80 extend to the appointment of a receiver of a partnership business (see Horne v. Horne (1963) SR (NSW) 121 ) and to winding up a partnership. In some cases this may be the appropriate way of carrying out the Court's duty under s. 81. In my opinion, the Court is not limited to making such an order as a step towards a settlement or transfer of property only under s. 79. Provided its jurisdiction is properly invoked, it could make such an order, at least under s. 33, so as to end as far as practicable the financial relations between the parties and avoid further proceedings between them in conformity with s. 81. (at p520)
10. The proceedings on the amended application filed by the wife since the order nisi are a matrimonial cause (within par. (ca) of the definition in s. 4). The Court has power to grant relief of the kind sought which is appointment of a receiver, that the books of account and assets be handed to the receiver, that the receiver prepare partnership accounts and for the costs of the application. Its power to grant certain other relief which was sought is not in issue. (at p520)
11. The Family Court has jurisdiction to deal with the application now before it. The course taken by the primary judge in deciding by consent that he had no jurisdiction was erroneous. Because he did not refuse to exercise jurisdiction, mandamus should be refused. (at p520)
AICKIN J. This is an application to make absolute an order nisi for a writ of mandamus granted by Gibbs J. and sought to be directed to Ross-Jones J., a judge of the Family Court of Australia and to Paul Ernest Beaumont. (at p520)
2. The facts out of which this application arises may be shortly stated. The applicant is one Starlette Anne Beaumont and the second respondent to the application is her husband. A decree nisi for the dissolution of the marriage was granted by Ross-Jones J. on 10th March 1978. It will nonetheless be convenient for present purposes to describe them as husband and wife. Both are medical practitioners and on 15th April 1976 they entered into a partnership agreement relating to their medical practices. By that deed the partnership was expressed to commence on 1st July 1975 and was to continue until 30th June 1978 and thereafter at will. (at p520)
3. Differences between the wife and her husband in relation to their marriage arose in the latter part of 1976 and they separated on 5th February 1977. In February 1978 the husband applied to the Family Court for dissolution of the marriage and on 8th March 1978 the wife applied to the Family Court for certain declarations and orders in relation to the partnership, but at the hearing the application was amended to seek additional orders that the husband settle a sum of money on the wife and transfer to her certain property. (at p521)
4. The application initially made by the wife was for a declaration that the partnership existed and had not been determined, and for orders that a named person, being an official liquidator, be appointed receiver of the partnership and that the books of account and assets of the partnership be handed to the receiver and that he prepare partnership accounts. The amended application sought, in addition to orders for settlement of a sum of money and transfers of certain property, orders (inter alia) that the receiver should have power to conduct the partnership practices and to make "all payments and receipts in respect of the conduct of the practices as appear to the "Trustee'" (receiver) "to be necessary or desirable" and out of the net proceeds of the practices to pay each week to the husband and wife the sum of $500.00. (at p521)
5. When the matter came on before Ross-Jones J. the husband's counsel submitted that the Family Court had no jurisdiction to hear the original application and the wife's counsel opposed that submission. The affidavit of the wife in support of the application for the order nisi stated that "After a brief adjournment my senior counsel and Mr. Lockhart of senior counsel for the respondent/husband announced to the Court that both parties would desire to test the question of jurisdiction in the High Court of Australia and both counsel invited the Court by consent to make a formal finding that the Family Court of Australia had no jurisdiction to hear the application so that the question of jurisdiction could be tested in the High Court". The affidavit goes on to say, "In response to the invitation of counsel His Honour Mr. Justice B. E. Ross-Jones made a formal decree but without any finding on the merits of the application, that the Court had no jurisdiction to hear the said application." (at p521)
6. The formal order made by Ross-Jones J. is not included in the papers before the Court and it does not appear whether any formal order was in fact taken out. (at p521)
7. The argument before us was primarily directed to the question whether the Family Law Court had power to appoint a receiver and make consequential orders of the kind sought. An appearance was announced by counsel on behalf of the husband, but he said that he did not propose to address any argument and his client would submit to any order the Court might make. He was given leave to withdraw. (at p522)
8. It is well settled that mandamus is a discretionary remedy and that it does not go either as of right or as of course. In the present case mandamus is sought to command a judge to hear or further hear the application made by the wife for declarations and orders as sought in the original application. There are, in my opinion, two substantial reasons why mandamus should be refused as a matter of discretion. (at p522)
9. The first is that an appeal lies as of right from a single judge of the Family Court to the Full Court of the Family Court, pursuant to s. 94 of the Family Law Act 1975. There is in these circumstances no apparent reason why an appeal should not have been taken to the Full Court of the Family Court after a decision by Ross-Jones J. The second reason why a writ of mandamus should not be issued is that the order made by the Family Court judge was made by consent of both the parties expressed through senior counsel acting on their behalf. I can see no basis upon which this Court should direct a writ of mandamus to a judge who has made an order by consent of the parties. If they have other remedies available by which to challenge that which was done by their consent, no doubt they can be pursued. (at p522)
10. The reasons which I have set out above are sufficient to require the conclusion that the order nisi for a mandamus should be discharged and in the particular circumstances of this case without any order as to costs. (at p522)
11. However, in view of the fact that other members of the Court have
expressed their opinion on the extent of the jurisdiction
of the Family Court
to make orders of the kind initially sought in these proceedings, it is I
think desirable that I should express
my own view on those matters. In my
opinion the Family Court has no power or jurisdiction to make an order that a
receiver be appointed
of the "partnership", or an order that the books of
account and the assets of the partnership be handed to the receiver. Equally
I
am satisfied that the Family Court has no jurisdiction to order that the
receiver shall have the powers referred to in pars. (a)
and (b) of the amended
relief as sought orally in the hearing before Ross-Jones J., namely, an order
that the receiver conduct the
partnership practices and make "all payments and
receipts in respect of the conduct of the practices as appear to the
"Trustee'"
(receiver) "to be necessary or desirable". The difficulties
inherent in a receiver, who is not a qualified medical practitioner,
conducting a medical practice need only be mentioned to appear overwhelming,
but that may not be a matter of jurisdiction. In my
opinion the nature of the
orders sought overlooks the difference between the assets of the partners and
the assets of the partnership.
It may well be that there would be jurisdiction
to appoint a person to receive or collect the assets of the parties to the
marriage
with a view to facilitating the making of some order for the
adjustment of property matters pursuant to s. 78 and s. 79. It is trite
law
that the interest of a partner in a partnership and in the partnership assets
is a very different one from mere co-ownership
of the relevant assets. The
interest of a partner in a partnership is in truth his proportionate share of
the assets of the partnership
after their realization and conversion into
money and after the payment of partnership debts. It is convenient to explain
the nature
of a partner's interest by quoting the observations of Kitto J. in
Livingston v. Commissioner of Stamp Duties (Q.)
[1960] HCA 94; (1960) 107 CLR
411, at p 453
:
"An analogy may be seen also in the case of a partner's interest in the
partnership assets. That he has a beneficial interest,
which the law will
recognize and enforce, in every piece of property which belongs to the
partnership is clearly established: In
re Holland; Brettell v. Holland (1907)
2 Ch 88, at p 91 ; Manley v. Sartori (1927) 1 Ch 157, at pp 163-164 ; In re
Fuller's Contract
(1933) Ch 652, at p 656 ; and none the less so because the
nature of the interest is peculiar in that his share in the partnership,
by
virtue of which the interest in a given asset exists while the asset belongs
to the partnership, consists not of a title to specific
property but of a
right to a proportion of the surplus after the realization of the assets and
payment of the debts and liabilities
of the partnership: In re Ritson; Ritson
v. Ritson (1898) 1 Ch 667; (1899) 1 Ch 128 ;Bakewell v. Deputy Federal
Commissioner of Taxation
[1937] HCA 11; (1937) 58 CLR 743, at p 770 ; that is to say, not a
'definite' share or interest in a particular asset, no 'right
to any part' of
it, but an interest which 'can be finally ascertained only when the
liquidation has been completed, and ... consists
of his share
of the surplus':
Rodriguez v. Speyer Brothers (1919) AC 59, at p 68 ." (at p523)
12. In so far as the Family Court may have power to appoint a receiver as
part of the exercise of its powers under ss. 78 and 79,
its orders can only
affect the interest of a husband or wife in the partnership and will not
extend to orders with respect to partnership
assets properly so called. If the
partnership is to be dissolved it must be dissolved in accordance with the law
relating to partnerships
and not otherwise. An order that the books of account
and the assets of the partnership be handed to a receiver, in the
circumstances
in which the receiver could have no power to wind up the affairs
of the partnership or pay its debts, would in my opinion be beyond
the
jurisdiction of the Family Court, even though the only partners may be husband
and wife. Before they could be said to be entitled
in any real sense to their
proportion of the partnership assets or the proceeds of their realization, all
the creditors of the partnership
would have to be paid and, in the absence of
some agreement to the contrary, all its assets realized. In the absence of
some agreement
in the course of the winding up of the partnership,
arrangements would have to be made for dealing with the goodwill of the
partnership
if it be regarded as a saleable asset. (at p524)
13. I respectfully agree that to make an order appointing a receiver of the assets of the partnership would be confusing and misleading, as well as beyond the jurisdiction of the Family Court. It would be another matter to appoint some person to receive and hold, pending some further order of the Family Court, the share to which each partner would become entitled upon the completion of the winding up of the affairs of the partnership. That presumably would be permissible, but to describe that person as a receiver of the partnership or of the partnership assets would be misleading. If the Family Court thought it appropriate that the partnership should be wound up to facilitate a property settlement it could presumably direct either or both parties to give an appropriate notice so as to terminate the partnership which, as it is now a partnership at will, could be done by a simple signed instrument delivered by one partner to the other. That course would allow the partnership assets to be realized and the interests of the respective partners to be ascertained and paid or transferred to them or to some designated person to receive them on behalf of each of the parties to await such disposition as the Family Court might order. (at p524)
14. We were referred to Jones v. Jones (1967) 10 FLR 493; (1968) 1 NSWLR 206 ; Dimov v. Dimov (1970) 17 FLR 462; (1971) WAR 113 and Anderson v. Anderson (1972) 19 FLR 480 which were decided under the Matrimonial Causes Act 1959 which contained a provision in similar terms to s. 80 (k) of the Family Law Act. In so far as those cases decided that the Matrimonial Causes Act itself conferred on courts exercising the jurisdiction conferred by that Act a power to appoint a receiver of a partnership or directly to order its winding up, they were in my opinion wrongly decided. (at p525)
15. I agree with the view expressed by my brother Jacobs that the Family Court could in the exercise of powers with respect to property settlements make declarations as to the respective existing interests of parties in particular property and make orders requiring the transfer of interests in property (including an interest in a partnership) from one party to another, and in appropriate cases for the appointment of a receiver to preserve or protect particular items of property of either party. In my opinion, however, what is sought in this application goes far beyond that. The Family Court has been asked to appoint a receiver of the partnership (not of the interests of the partners therein) and to deal with the partnership property as such. That, in my opinion, it has no jurisdiction to do. (at p525)
16. Accordingly I am of opinion that, even if there were not what I regard as compelling reasons for declining as a matter of discretion to make absolute the order nisi for a mandamus, the application should be refused because the Family Court had no jurisdiction to make the orders referred to in the order nisi. (at p525)
17. I would therefore discharge the order nisi and make no order as to costs. (at p525)
ORDER
Order nisi discharged. No order as to costs.