Splitting super? If you and your ex are applying for consent orders for a property settlement, or heading to court to ask a judge to decide on orders, there are certain rules you need to follow when it comes to seeking orders to split super. It’s important to follow the rules carefully to avoid having your matter go awry.
The recent case of Naisby & Naisby (court-ordered pseudonyms) is an example of how things can go wrong based on an apparently small detail. In this matter, a husband was appealing from property settlement orders on a number of grounds. One of the grounds was that the primary judge had made a superannuation splitting order “without power” because the superannuation fund trustee had not been afforded procedural fairness.
The splitting order was a major part of the property settlement, with the wife to receive a super split from the husband’s super interest.
Unfortunately for the wife, she (or her solicitors) had failed to advise the super fund of her intention to seek a splitting order. Four days before the start of the trial, the wife filed an Amended Response with the court seeking among other things, super splitting orders. However, she did not serve that Amended Response on the trustee of the super fund. As such, this meant the trustee was not provided with procedural fairness.
Procedural fairness for the super fund
Providing the superannuation fund trustee with procedural fairness means you have to tell the trustee of the super fund about any court orders you are seeking involving the relevant superannuation. You would be required to provide a copy of the splitting orders that you are seeking, usually in advance of your court hearing. Giving the trustee reasonable notice of any intended orders is necessary to allow the fund trustee an opportunity to object to the orders you’re seeking, and to allow the trustee to make any administrative arrangements that may be necessary in relation to the order or contesting the order.
The trustee should be advised prior to the orders being made, as well as ultimately being served a sealed copy of any eventual orders that are made. But in this matter, the trustee was not given any notice at all. The appeal court found this meant the trustee had not been afforded procedural fairness.
The appeal judges noted that according to superannuation and family law legislation:
“It is intended that procedural fairness, in this context, will imply that the trustee has been given notice of the proceedings, been informed of when the proceedings will be heard by the court and be given an opportunity to be heard in the proceedings.
“In order for such an opportunity to given, the notice provided should be sufficient to enable the trustee to consider whether the trustee wishes to seek to become a party to the proceedings and be heard in respect of the proposed splitting order or its form. Sometimes this period allows the parties to attend to any concerns raised by the trustee, particularly in relation to the form of the splitting orders.”
How much notice is needed?
Regarding how much notice is required to be given, the judges noted:
“The current rules of the court mandate what notice should be given to trustees. Rule 24.07(2) of the Federal Circuit Court Rules 2001 (Cth) (“FCCR”) requires a sealed copy of an application for a splitting order to be served upon the trustee immediately upon it being filed. Rule 14.06(2) of the Family Law Rules 2004 provides for service of notice of the orders sought at least 28 days before the first appearance before the trial judge.”
What information does the super trustee need?
Notice to the trustee of the super fund has to incorporate a number of elements. It has to include:
- the terms of the order being sought that will bind the trustee
- information on any upcoming court events
- a statement that the parties are going to apply for the order they are seeking if there is no objection received from the trustee within a certain time period
- a statement that if the trustee objects to the orders sought, they must give the parties written notice of the objection within a particular time period
- a statement that if the trustee doesn’t object to the order sought within 28 days after receiving notice, the party can go ahead and file the application or lodge the draft consent orders. (If the trustee consents in writing within the 28 days, the parties can also go ahead and file.)
In this case, if this had been the only successful ground of appeal, the appeal court arguably could have re-exercised its discretion to redraft the relevant paragraphs of the property settlement order. For example, it could have been redrafted to say the order had no effect until 28 days after the order is served on the trustee. Or the appeal court could arguably delay the remaking of the order until the court was satisfied that notice had been properly given and the trustee didn’t seek to intervene in the proceedings. However, because the husband was successful on other grounds of appeal, it meant the matter had to be remitted for rehearing.
You can read this judgment in full here.
You can also read the Family Court’s guidance on superannuation here.
Do you need assistance with a property settlement or any other family law matter? Please contact Canberra family lawyer Cristina Huesch or one of our other experienced solicitors here at Alliance Family Law on (02) 6223 2400.
Please note our blogs are not legal advice. For information on how to obtain the correct legal advice, please contact Alliance Family Law.