FEDERAL JUSTICE SYSTEM AMENDMENT (EFFICIENCY MEASURES) BILL (NO. 1) 2008 Explanatory Memorandum
FEDERAL JUSTICE SYSTEM AMENDMENT (EFFICIENCY MEASURES) BILL (NO. 1) 2008
2008-2009
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
SENATE
FEDERAL JUSTICE SYSTEM AMENDMENT (EFFICIENCY MEASURES) BILL (NO. 1) 2008
SUPPLEMENTARY EXPLANATORY MEMORANDUM
Amendments to be Moved on Behalf of the Government
(Circulated by authority of the Attorney-General,
the Honourable Robert McClelland MP)
FEDERAL JUSTICE SYSTEM AMENDMENT (EFFICIENCY MEASURES) BILL (NO. 1)
GENERAL OUTLINE
The Federal Justice System Amendment (Efficiency Measures) Bill (No. 1)
2008 (the Bill) amends various Acts in order to improve the efficient
conduct of business in the federal courts and ensures the concurrent
jurisdiction of the Federal Court of Australia under the International
Arbitration Act 1974. It also responds to the decision of the Full Court
of the Family Court of Australia in Black v Black [2008] FamCAFC 7, where
the Court applied a strict compliance test in relation to certain
technical requirements for binding financial agreements made under the
Family Law Act 1975.
The Government amendments proposed to the Bill will address issues that
have arisen in submissions to the inquiry of the Senate Standing Committee
on Legal and Constitutional Affairs into the provisions of the Bill and
following consultation with key stakeholders. The proposed Government
amendments will:
. amend the Family Law Act 1975 to enable legal practitioners to provide
signed statements about the giving of prior independent legal advice to
spouse parties to financial and termination agreements either before or
after the spouse party signs the agreement
. amend the Family Law Act 1975 to provide that copies of those statement
must also be provided either to the other spouse party or to a legal
practitioner of the other spouse party
. amend the Family Law Act 1975 to provide additional protection for
parties who enter into financial and termination agreements by enabling a
court to declare, in enforcement proceedings, that an agreement is
binding in spite of a failure to meet the procedural requirements
relating to the making of the agreement if the court is satisfied that it
would be unjust and inequitable if the agreement did not bind the spouse
parties (disregarding any change in circumstances from the time the
agreement was made)
. provide that the amendments to the Family Law Act 1975 in Schedule 5 to
the Bill will not affect any court orders that have been made on matters
covered by a financial agreement or a termination agreement
. ensure that the amendments to the Family Law Act 1975 in Part 1 of
Schedule 5 to the Bill will not inadvertently render invalid financial
and termination agreements made between 27 December 2000 and
14 January 2004
. provide that a financial agreement or a termination agreement made
before the amendments to Schedule 5 to the Bill commence will bind the
parties who have signed the agreement if the spouse parties obtained
independent legal advice prior to signing the agreement
. provide that the amendments to the Family Law Act 1975 in Schedule 5 to
the Bill commence on the 28th day after the Bill receives the Royal
Assent, and
. correct a minor technical point in the amendments to the International
Arbitration Act 1974 to clarify that awards will be enforceable in the
Federal Court as if they were a judgment or order of the Federal Court.
FINANCIAL IMPACT STATEMENT
The proposed amendments will not have any significant financial impact.
NOTES ON AMENDMENTS
Amendment 1: Clause 2, page 2 (table items 3 to 5) (legal advice
requirements)
This amendment replaces items 3 to 5 of the table in subclause 2(1) of the
Bill to provide a new commencement date for the amendments to the Family
Law Act 1975 in Schedule 5 to the Bill relating to binding financial and
termination agreements. The amendment inserts a new item 3 in the table to
provide for the amendments to commence on the 28th day after the Bill
receives the Royal Assent. This will provide time for the legal profession
and the courts to be notified about the new procedural requirements that
will apply for agreements to be binding on the parties to the agreement.
Amendments 2 and 3: Schedule 2, items 2 and 4, page 6 (lines 12, 22 and 23)
(technical amendment)
2. These amendments replace the words 'had been made by' in items 2 and
4 of Schedule 2 to the Bill with 'were a judgment or order of'.
This will clarify that foreign awards within the meaning of the
International Arbitration Act 1974 will be enforceable in the
Federal Court of Australia as if they were a judgment or order of
the Federal Court of Australia.
Amendment 4: Schedule 5, page 12 (after line 11), after item 1 (legal
advice requirements)
3. This amendment inserts item 1A into Part 1 of Schedule 5 to the Bill
which will amend subsection 90G(1) of the Family Law Act 1975 as a
consequence of the amendments made by item 4A (inserted by Amendment
6) .
Amendment 5: Schedule 5, item 2, page 12 (lines 14 to 22) (legal advice
requirements)
4. This amendment replaces proposed paragraph 90G(1)(b) inserted by
item 2 of Schedule 5 to the Bill with new paragraphs 90G(1)(b),
90G(1)(c) and 90G(1)(ca). These amended paragraphs will ensure that
the technical requirements for a financial agreement in subsection
90G(1) of the Family Law Act 1975 support the additional protections
for parties that are proposed for insertion by these Government
amendments.
5. New paragraph 90G(1)(b) will require each spouse party to a
financial agreement to obtain independent legal advice from a legal
practitioner about the effect of the agreement on their rights, and
the advantages and disadvantages, at the time that the advice was
provided, of making the agreement. This will ensure that spouse
parties will receive independent legal advice before the agreement
is signed so that they are able to make an informed decision.
6. New paragraph 90G(1)(c) will require each spouse party to obtain a
signed statement from the legal practitioner giving the advice
stating that the advice was given (regardless of whether the
statement is annexed to the agreement). This will ensure that each
spouse party obtains a statement evidencing that the advice has been
received. The signed statement may be provided by the legal
practitioner either prior to or after the execution of the agreement
by the spouse parties. This amendment is necessary to ensure that
agreements are not rendered defective simply on the basis of the
order in which the spouse parties sign the agreement and are given a
statement signed by their respective legal practitioners.
7. New paragraph 90G(1)(ca) will require that a copy of the signed
statement given to a spouse party must be provided to the other
spouse party or to their legal practitioner. This requirement will
ensure that there is objective evidence readily available to each
spouse party that legal advice was provided to the other spouse
party if they later seek to enforce the terms of the agreement,
without overly complicating the requirements for such an agreement
to be binding.
8. Agreements that have complied with the requirements in current
paragraphs 90G(1)(c) and 90G(1)(e) of the Family Law Act 1975
(relating to annexure of certificates to, and distribution of copies
of, the agreement) would meet the 'new' requirement to provide
copies of the signed statements.
Amendment 7: Schedule 5, item 5, page 12 (line 29) to page 13 (line 5)
(legal advice requirements)
9. This amendment replaces proposed paragraph 90J(2)(b) inserted by
item 5 of Schedule 5 to the Bill with new paragraphs 90J(2)(b),
90J(2)(c) and 90J(2)(ca). These amended paragraphs will ensure that
the technical requirements for a termination agreement in subsection
90J(2) of the Family Law Act 1975 support the additional protections
for parties that are proposed for insertion by these Government
amendments.
10. New paragraph 90J(2)(b) will require spouse parties to a termination
agreement to obtain independent legal advice from a legal
practitioner about the effect of the agreement on their rights, and
the advantages and disadvantages, at the time that the advice was
provided, of making the agreement. This will ensure that spouse
parties will receive independent legal advice before the agreement
is signed so that they are able to make an informed decision.
11. New paragraph 90J(2)(c) will require each spouse party to obtain a
signed statement from the legal practitioner giving the advice
stating that the advice was given (regardless of whether the
statement is annexed to the agreement). This will ensure that each
spouse party obtains a statement evidencing that the advice has been
received. The signed statement may be provided by the legal
practitioner either prior to or after the execution of the agreement
by the spouse parties. This amendment is necessary to ensure that
agreements are not rendered defective simply on the basis of the
order in which the spouse parties sign the agreement and are given a
statement signed by their respective legal practitioners.
12. New paragraph 90J(2)(ca) will require that a copy of the signed
statement given to a spouse party must be provided to the other
spouse party or to their legal practitioner. This requirement will
ensure that there is objective evidence readily available to each
spouse party that legal advice was provided to the other spouse
party if they if the parties later seek to enforce the terms of the
agreement, without overly complicating the requirements for such an
agreement to be binding.
13. Agreements that have complied with the requirements in current
paragraphs 90J(2)(c) and 90J(2)(e) of the Family Law Act 1975
(relating to annexure of certificates to, and distribution of copies
of, the agreement) would meet the 'new' requirement to provide
copies of the signed statements.
Amendments 6 and 8: Schedule 5, pages 12 (after item 4) and 13 (after item
7) (legal advice requirements)
14. Amendments 6 and 8 insert new items 4A, 4B and 7A into Part 1 of
Schedule 5 to the Bill. These items will amend the Family Law Act
1975 to enable a court to declare, in enforcement proceedings, that
a financial or termination agreement is binding in spite of a
failure to meet some of the technical requirements if the court is
satisfied that it would be unjust and inequitable if the agreement
did not bind the spouse parties (disregarding any change in
circumstances from the time the agreement was made).
15. Item 4A will insert new subsections 90G(1A), 90G(1B) and 90G(1C)
into section 90G of the Family Law Act 1975, which sets out the
requirements for a binding financial agreement. New subsection
90G(1A) will enable a court to declare, in enforcement proceedings,
that a financial agreement is binding on the parties to the
agreement if:
. the agreement is signed by all parties
. there is a failure to meet the requirements as set out in one or more
of paragraphs 90G(1)(b), 90G(1)(c) and 90G(1)(ca) of the Family Law
Act 1975
. the court is satisfied that it would be unjust and inequitable if the
agreement did not bind the spouse parties (disregarding any change in
circumstances from the time the agreement was made), and
. the agreement has not been terminated and has not been set aside by a
court.
16. Item 7A will insert new subsections 90J(2A), 90J(2B) and 90J(2C)
into section 90J of the Family Law Act 1975, which sets out the
requirements for a binding termination agreement. New subsection
90J(2A) will enable a court to declare, in enforcement proceedings,
that a financial agreement is binding on the parties to the
agreement if:
. the agreement is signed by all parties
. there is a failure to meet the requirements as set out in one or more
of paragraphs 90J(2)(b), 90J(2)(c) and 90J(2)(ca) of the Family Law
Act 1975
. the court is satisfied that it would be unjust and inequitable if the
agreement did not bind the spouse parties (disregarding any change in
circumstances from the time the agreement was made), and
. the agreement has not been terminated and has not been set aside by a
court.
Item 4B will amend subsection 90J(2) of the Family Law Act 1975 as a
consequence of the amendments made by item 7A.
Amendment 9: Schedule 5, item 8, page 13 (line 11) (legal advice
requirements)
17. Item 8 of Schedule 5 to the Bill sets out the application of
amendments made by items 2 to 7. Amendment 9 replaces '2 to 7' in
subitem 8(1) of Schedule 5 to the Bill with '1A to 7A', to ensure
that the items inserted into the Bill by Amendments 4 to 8 will have
the same application as items 2 to 7 of Schedule 5 to the Bill.
Amendment 10: Schedule 5, page 13 (after line 16), at the end of item 8
(legal advice requirements)
18. This amendment inserts new subitems 8(3), 8(4), 8(5), 8(6), 8(7),
8(8) and 8(9) into item 8 in Part 1 of Schedule 5 to the Bill.
19. Subitem 8(3) will provide that if a court has made a property
settlement or a spousal maintenance order before the commencement of
item 8 on the basis that a financial agreement or a termination
agreement did not bind the spouse parties, the agreement is, after
the commencement of item 8, taken not to bind the spouse parties.
This means that item 8 will not operate to 'revive' any agreements
that have been overtaken by court orders thereby giving certainty to
any court orders.
20. Subitems 8(4) and 8(5) will ensure that the retrospective
application of the amendments proposed by the Bill will not
invalidate financial agreements and termination agreements which
complied with the requirements for independent legal advice in the
Family Law Act 1975 prior to 14 January 2004. Prior to
14 January 2004 (the commencement date of the Family Law Amendment
Act 2003, which amended the requirements for financial and
termination agreements), parties to financial and termination
agreements were required to obtain independent legal advice to
address, among other things, whether or not an agreement was 'to the
advantage, financially or otherwise, of that party to make the
agreement.'
21. Subitems 8(6), 8(7), 8(8) and 8(9) will provide for the
circumstances in which a financial agreement or a termination
agreement made before the commencement of item 8 will bind the
parties to the agreement. Such an agreement will bind the parties
to it if:
. each party has signed the agreement, and
. each spouse party, before signing the agreement, obtained independent
legal advice from a legal practitioner about the effect of the agreement
on their rights, and the advantages and disadvantages, at the time the
advice was provided, of making the agreement.
A court will be able to declare, in enforcement proceedings, that the
agreement is binding on the parties where each spouse party did not obtain
that prior independent legal advice if it is satisfied it would be unjust
and inequitable if the agreement did not bind the spouse parties
(disregarding any change in circumstance from the time the agreement was
made).
Amendment 11: Schedule 5, Part 1, page 13 (after line 16), at the end of
the Part (legal advice requirements)
22. This amendment inserts new item 8A into Part 1 of Schedule 5 to the
Bill which will provide for additional circumstances in which a
financial and termination agreement made on or after 14 January 2004
and before commencement of item 8A will bind the parties to the
agreement. Amendments to the Family Law Act 1975 which commenced on
that date changed the matters about which spouses had to obtain
prior independent legal advice for the agreement to bind them. Some
legal practitioners continued to rely on old precedents relating to
the provisions of the Act as they stood before 14 January 2004 for
agreements made for some time after that date. Subitems 8A(2),
8A(3), 8A(5) and 8A(6) will provide that the agreement binds the
spouses if the prior independent legal advice obtained by one or
both spouses was about matters on which advice was required under
the Act to be obtained before 14 January 2004. Subitem 8A(7)
provides that Amendment 11 does not apply to agreements set aside
before the commencement of item 8A. Accordingly, it does not give
rise to the acquisition of any property rights.
Amendment 12: Schedule 5, page 14 (after line 10), after item 9 (legal
advice requirements)
23. This amendment inserts new item 9A into Part 2 of Schedule 5 to the
Bill which will amend subsection 90UJ(1) of the Family Law Act 1975
as a consequence of the amendments made by item 12A (inserted by
Amendment 14) .
Amendment 13: Schedule 5, item 10, page 14 (lines 13 to 21) (legal advice
requirements)
24. This amendment replaces proposed paragraph 90UJ(1)(b) inserted by
item 10 of Schedule 5 to the Bill with new paragraphs 90UJ(1)(b),
90UJ(1)(c) and 90UJ(1)(ca). The new paragraphs will have the same
effect, in relation to Part VIIIAB financial agreements between de
facto couples, as those inserted by Amendment 5 in relation to
financial agreements between married couples.
Amendment 14: Schedule 5, page 14 (after line 25), after item 12 (legal
advice requirements)
25. This amendment will insert new items 12A and 12B into Part 2 of
Schedule 5 to the Bill. The new items will have the same effect, in
relation to Part VIIIAB financial agreements between de facto
couples, as items 4A and 4B inserted into the Bill by Amendment 6 in
relation to financial agreements between married couples.
Amendment 15: Schedule 5, item 13, page 14 (line 28) to page 15 (line 4)
(legal advice requirements)
26. This amendment replaces proposed paragraph 90UL(2)(b) inserted by
item 13 of Schedule 5 to the Bill with new paragraphs 90UL(2)(b),
90UL(2)(c) and 90UL(2)(ca). The new paragraphs will have the same
effect, in relation to Part VIIIAB termination agreements between de
facto couples, as those inserted by Amendment 7 in relation to
termination agreements between married couples.
Amendment 16: Schedule 5, pages 14 (after line 8), after item 15 (legal
advice requirements)
27. This amendment will insert new item 15A into Part 2 of Schedule 5 to
the Bill. The new item will have the same effect, in relation to
Part VIIIAB termination agreements between de facto couples, as item
7A inserted into the Bill by Amendment 8 in relation to termination
agreements between married couples.
Amendment 17: Schedule 5, item 17, page 15 (line 26) (legal advice
requirements)
28. Item 17 of Schedule 5 to the Bill sets out the application of
amendments made by items 10 to 15. Amendment 16 replaces '10 to 15'
in subitem 17(1) of Schedule 5 to the Bill with '9A to 15A', to
ensure that the items inserted into the Bill by Amendments 12 to 16
will have the same application as items 10 to 15 of Schedule 5 to
the Bill.
Amendment 18: Schedule 5, item 17, page 15 (after line 34), at the end of
item 17 (legal advice requirements)
29. This amendment will insert new subitems 17(3), 17(4), 17(5), 17(6)
and 17(7) into item 17 in Part 2 of Schedule 5 to the Bill. These
subitems will have the same effect, in relation to Part VIIIAB
financial agreements and Part VIIIAB termination agreements between
de facto couples, as subitems 8(3), 8(6), 8(7), 8(8) and 8(9)
inserted into the Bill by Amendment 10 in relation to married
couples.
