In January 2020, the plaintiff moved to New Zealand. At the same time, he wanted to wind up each of MTC, Overby and CFG, a measure contemplated by the financial agreement.

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On 30 June 2021, the plaintiff and the defendant executed a term sheet. The term sheet was prepared by an accountant who had been retained by the defendant. The term sheet was entitled: “Binding Term Sheet” and included the following clauses:

 “7. This Term Sheet summarises the principal terms of the Proposed Transaction and is intended to be binding on the parties.

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 Under the heading, GENERAL:

 “Binding Nature: The parties agree that the provisions of this Term Sheet are intended to be legally binding.”

The Proposed Transaction had the following three parts:

1. Overby was to declare an “unfranked dividend in favour of M&T Family Trust as its sole shareholder. The amount of the Overby Dividend will be $1,000,000. ”The dividend was to “be sourced from, and constitute, conduit foreign income”;
2. MTC was to then declare a trust distribution in favour of the plaintiff “in an amount equal to, and funded from, the Overby Dividend received by M&T Family Trust” as set out in (1) above; and
3. the Plaintiff then had the option to request “future distributions from M&T Family Trust to himself or entities nominated by him, at a time and for an amount at his discretion, that are indirectly to be funded from CFI [conduit foreign income] of Overby, and to the extent amounts requested do not exceed MC’s 50% share of Group Retained Earnings ...” 

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This case concerned the third part of the Proposed Transaction

On 30 June 2021, in accordance with the first part of the Proposed Transaction, Overby declared an unfranked dividend in favour of M&T Family Trust, sourced from conduit foreign income.  On the same date, and in accordance with the second part of the Proposed Transaction, M&T Family Trust declared a $1 million trust distribution in favour of the Plaintiff, funded from the above dividend.

In January 2022, the Plaintiff endeavoured to initiate the third part of the Proposed Transaction. The Defendant failed to cooperate, leading to the current proceedings.

Several questions were posed by the facts:

First, there was a question of jurisdiction involving whether the Summons concerned a “matrimonial cause” as defined in s 4 of the Family Law Act. If found, this would have meant that the Supreme Court did not have jurisdiction to hear the matter, that jurisdiction having been extinguished by a proclamation dated 27 May 1976, effective from 1 June 1976.

According to Elkaim AJA, the most applicable definition of a matrimonial cause was that found in paragraph (ca)(i) of the definition:

“proceedings between the parties to a marriage with respect to the property of the parties to the marriage or either of them, being proceedings:

(i) arising out of the marital relationship.”

There was no doubt that the proceedings were between parties to a marriage, and concerned property of the parties. In the circumstances, the question arose as to whether the proceedings “arise out of the marital relationship”. In reaching his decision, Elkaim AJA noted that the High Court considered the matter in Perlmanv Perlman (1984) 155 CLR 474; [1984] HCA 4 and, in particular with what Wilson J had said of the agreement in Perlman, at500:

“Itis sufficient for me to express the opinion that on no reasonable construction of the paragraph could it be said that the wife's claims focus on circumstances arising out of the marital relationship. The marriage was dissolved in 1978 and the financial relationships of the parties were finally determined by the approved agreement. The husband's failure to respect his obligations under the agreement has nothing whatever to do with the marital relationship.”

Further, Elkaim AJA noted the comments by Dawson J who said the following in Perlmanat 511-512:

“It was also submitted that the proceedings in the Supreme Court were proceedings for an order in circumstances arising out of the marital relationship within the meaning of par. (c) of the definition of matrimonial cause and for that reason excluded by the proclamation from the jurisdiction of that Court. Clearly, that submission cannot be sustained. The proceedings arose out of a contractual relationship entered into after the marital relationship had been concluded by the dissolution of the marriage. The dissolution of the marriage was the occasion for the contract but the circumstances in which relief was sought arose out of the contract and its breach and not the marital relationship.”

Reference was also made by Elkaim AJA to the decision of the New South Wales Court of Appeal in Bate v Priestley (1989) 13 Fam LR 376. In that case, Hope AJA (as his Honour then was) stated the following at 393-394:

“It has been submitted for the defendant that there is a much closer relationship in the present case between the deed upon which the plaintiff sued and the orders of the Family Court, and hence it can the properly said that the proceedings arose out of the marital relationship....... Nonetheless the proceedings arose out of the deed and not otherwise. They did not arise out of the marital relationship which led to proceedings in the Family Court and to the execution of the deed.

Later, at 396, Hope AJA emphasised that the proceedings had been brought to enforce a deed, not to enforce any orders of the Family Court.

In the current proceedings, Elkaim AJA held that the circumstances were the same as the proceedings were brought to enforce the Term Sheet and were not brought to enforce any order made in the Family Court.

Another matter which his Honour found to be relevant to jurisdiction was the fact that the Term Sheet was executed on 30 June 2021, 11 years after the BFA was registered in the Family Court.
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A second issue before the Court was the appropriateness of the remedy sought by the Plaintiff, that is, an order for specific performance of the Defendant’s undertakings under the Term Sheet. In determining this issue, his Honour noted the following:

1. Overby, on 30 June 2021, and consistent with Step 1in the Term Sheet, had declared an unfranked dividend in favour of M&T Family Trust; 
2. on the same date, and pursuant to Step 2, the M&T Family Trust declared a trust distribution in favour of the Plaintiff in the sum of $1 million.
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According to his Honour, the taking of these two steps amounted to a partial performance of the Term Sheet. On 14 February 2023, in order to achieve the third part of the Term Sheet, the Plaintiff’s representative sent the Defendant’s representative the documents necessary for the Defendant to authorise the additional distribution. The distribution was said to be in the sum of$35,444,615. The figure was never challenged.

On 28February 2023, the Plaintiff’s solicitors sent the Defendant a letter requesting her performance of her obligations under the Term Sheet. The Defendant was asked to sign the draft distribution documents. She did not respond.  According to his Honour, the Defendant’s lack of response amounted to a failure to perform the Term Sheet according to its components. The silence of the Defendant excluded any argument that performance was not possible. Further, damages were held not to be an appropriate remedy in the circumstances.