Chang v Peng

[2024] SASC 18

SUPREME COURT OF SOUTH AUSTRALIA

(Civil: Application)

CHANG v PENG

[2024] SASC 18

Judgment of the Honourable Chief Justice Kourakis  

COURTS AND JUDGES - COURTS - JURISDICTION AND POWERS - CONCURRENT JURISDICTION OF DIFFERENT COURTS - TRANSFER OF PROCEEDINGS UNDER CROSS-VESTING LEGISLATION - WHERE APPROPRIATE AND IN INTERESTS OF JUSTICE - OTHER CASES

This was an application pursuant to s 5(1) of the Jurisdiction of Courts (Cross-vesting) Act 1987 (SA) for the transfer of proceedings pending before the Supreme Court to Division 1 of the Federal Circuit and Family Court of Australia.

In those proceedings, the applicant, Mrs Hsiu-Chien Chang, asserted beneficial ownership of certain real property situated at Unley, the fee simple in respect of which the respondent, Ms Danwei Peng, was the registered proprietor. Although Mrs Chang provided the entirety of the purchase price for the acquisition of the Unley Property, it was ultimately registered in the name of Ms Peng, as contemplated by an agreement reached in December 2021 between Mrs Chang, Ms Peng, and a Mr Yueh-Chen Lee, the applicant’s son and respondent’s husband. Upon the separation of Ms Peng and Mr Lee, Mrs Chang instituted proceedings seeking, primarily, a declaration that Ms Peng held the Unley Property on either a resulting or constructive trust for Mrs Chang.

After Mrs Chang had commenced her proceedings in the District Court for equitable relief, Ms Peng instituted proceedings in Division 1 of the Federal Circuit and Family Court of Australia, in which she sought orders for the sale of the Unley Property and the division of the proceeds thereof between herself, Mrs Chang, and Mr Lee. In consequence thereof, Ms Peng sought a transfer of Mrs Chang’s proceedings on the basis that the attribution of the legal and beneficial ownership of the Unley Property was necessary to ascertain the marital property owned by Ms Peng and Mr Lee. In opposing the application for transfer, Mrs Chang contended that the Federal Circuit and Family Court of Australia had no jurisdiction to determine who of Mrs Chang and Ms Peng was beneficially entitled to the Unley Property, because, Mrs Chang having instituted her proceedings first, the proceedings did not answer the description of a ‘matrimonial cause’ in s 4(f) of the Family Law Act 1975 (Cth).

Held, granting the application and transferring the proceedings to Division 1 of the Federal Circuit and Family Court:

1.The Federal Circuit and Family Court of Australia (Division 1) does have jurisdiction to determine Mrs Chang’s proceedings as a ‘matrimonial cause’, notwithstanding that said proceedings were instituted before Ms Peng’s proceedings. The extension of ‘matrimonial causes’ in s 4(f) of the Family Law Act 1975 (Cth) to ‘proceedings … in relation to concurrent, pending or completed proceedings of a kind referred to in any of paragraphs (a) to (eb)’ does not demand complete concurrency with the matrimonial proceedings, but rather refers to proceedings that have been initiated but are yet to be determined.

2.Although Mrs Chang’s matter would have been incapable of being instituted in the Federal Circuit and Family Court (Division 1) other than in respect of, and ancillary to, an application for the division of matrimonial property, the interests of justice favoured a transfer of proceedings.

Family Law Act 1975 (Cth) s 4(f); Federal Circuit and Family Court of Australia Act 2021 (Cth) s 8(1); Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) r 12.14; Jurisdiction of Courts (Cross-vesting) Act 1987 (SA) s 5(1), referred to.
Comino v Kremetis (2023) 110 NSWLR 224; Hadid v Sabouh [2023] NSWSC 483; Perlman v Perlman (1984) 155 CLR 474, considered.

CHANG v PENG
[2024] SASC 18

Civil: Application

1. KOURAKIS CJ:    This is an application by Danwei Peng (Danwei) that this Court make an order pursuant to s 5(1) of the Jurisdiction of Courts (Cross‑vesting) Act 1987 (SA) (the Cross-vesting Act) transferring proceedings in this Court to Division 1 of the Federal Circuit and Family Court of Australia (the FCFCA). Section 8(1) of the Federal Circuit and Family Court of Australia Act 2021 (Cth) continues the court formerly known as the Family Court of Australia as Division 1 of the FCFCA. Section 5(1) of the Cross-vesting Act relevantly refers only to the Family Court. Accordingly, an order made pursuant to that subsection must transfer proceedings to Division 1 of the FCFCA. I draw attention to the desirability of amending the reference to the ‘Family Court’ in s 5(1) of the Cross-vesting Act to refer expressly to the Federal Circuit and Family Court of Australia as has been done in at least one other State jurisdiction.

2. The proceedings sought to be transferred to Division 1 of the FCFCA are an action brought by Danwei’s mother-in-law, Hsiu-Chien Chang (Mrs Chang), in the District Court on 11 April 2023, seeking a declaration that Danwei holds the property situated at Unley (the Unley property) on trust for, and on behalf of, Mrs Chang.  The action was transferred into this Court for the purpose of Danwei making this application for transfer.

3. Mrs Chang’s son, Yueh-Chen Lee (Jacky) married Danwei on 13 October 2021.  At the time, Danwei was renovating her home at Clarence Gardens (the Clarence Gardens property).  Mrs Chang permitted Jackie and Danwei to move into her residence at Malvern (the Malvern property) temporarily until those renovations were completed.  In the meantime, Mrs Chang, who was then in Taiwan, asked Jacky to look for another house for her to purchase so that she could live in it upon her return to Australia.  Mrs Chang thought it best that she not reside in the Malvern property with Danwei and Jacky in order to allow them some privacy early in their married life.

4. Jacky recommended the Unley property to Mrs Chang and, in due course, it was purchased at auction on 13 November 2021 for $1,800,000.  The purchaser named in the contract was ‘Yueh-Chen Lee and or nominees’.  Mrs Chang’s Statement of Claim pleads that  Jacky paid an initial deposit of $5,000 on the day of the auction and was later reimbursed by her.  Mrs Chang pleads that she transferred the remainder of the deposit, an amount of $85,000, into Jacky’s ANZ bank account on 15 November 2021.  He, in turn, paid it into the trust account of the vendor’s real estate agent.  In a WeChat video conference held in December 2021, it was agreed that the Unley property would be registered in Danwei’s name.  Letters of instruction to that effect were executed by Mrs Chang.  Mrs Chang pleads that she paid the balance of the purchase price at settlement on 12 January 2022.  She pleads that Danwei did not make any contribution to the cost of acquiring the Unley property.

5. Mrs Chang returned to Australia on 22 April 2022.  Mrs Chang, Jacky, and Danwei thereafter agreed that Mrs Chang would move into the Unley property after the finalisation of the renovations.  Mrs Chang then spent about $63,000 renovating the Unley property. 

6. Danwei accepts that Mrs Chang paid all of the purchase price for the Unley property, but maintains that the house was purchased for her and Jacky as a wedding gift. 

7. Danwei and Jacky separated in December 2022.  On 24 July 2023, Danwei commenced proceedings in the FCFCA against Mrs Chang and Jacky as respondents (the matrimonial proceedings).  She seeks an order for the sale of the Unley property and a division of the proceeds of sale, in the proportions of 30 percent to herself, and 70 percent to Jacky and Mrs Chang.  Mrs Chang has applied to strike out the claim made by Danwei against her in the matrimonial proceedings, and Jacky has made a claim against Danwei for $300,000 said to be owed to Mrs Chang. 

8. Danwei seeks the transfer on the following basis:[1]

   The resolution of who has what interests in the property of my husband and I at the date of separation is a crucial question for the FC proceedings. Furthermore, what orders the FCFCA considers appropriate to make in respect of the division of that property will have to take into account the allegations of my mother-in-law and my husband as well as my evidence as to the circumstances in which I became the registered proprietor of the Unley property. Furthermore, the applications for repayment of alleged loans in the FC proceedings can only be sensibly assessed in the context of determining what contributions were made and in what circumstances in the course of the marriage. My husband will be an essential witness as to all issues as my dealings were always done in conjunction with him. My husband is not a party to these proceedings but is an essential party to the FC proceedings. The process of discovery of relevant documents will be much more efficiently done in proceedings where all relevant parties are before the court, namely in the FCFCA. My mother-in-law will be an essential witness to my husband’s case in the FCFCA if it proceeds in accordance with his and her current allegations. To proceed with these proceedings in isolation from the FCFCA will potentially lead to inconsistent evidence and conclusions in identical questions which could be productive of injustice. The continuation of two separate sets of proceedings will be wasteful of costs and will place me in a position where it is unlikely that I will be able to afford to be appropriately represented to put my case before two courts.

   [1] Affidavit of Danwei Peng dated 6 October 2023 at [13].

   Discussion

9. There is no doubt that the claims made by Mrs Chang in the District Court are within the jurisdiction of the District Court and now this Court.  The ascertainment and declaration of equitable interests in real property is a core element of the general civil jurisdiction of the courts of this State.  Equally, the ascertainment of the property of the parties to a marriage is an essential first step in matrimonial proceedings with respect to the division of the property of the parties to a marriage. 

10. The definition of ‘matrimonial cause’ in s 4 of the Family Law Act 1975 (Cth) includes:

    (f) any other proceedings (including proceedings with respect to the enforcement of a decree or the service of process) in relation to concurrent, pending or completed proceedings of a kind referred to in any of paragraphs (a) to (eb), including proceedings of such a kind pending at, or completed before, the commencement of this Act.

11. Mrs Chang accepts that the proceedings initiated by her in the District Court would have been proceedings in relation to the proceedings between Danwei and Jacky, if those proceedings had been initiated in the FCFCA before Mrs Chang brought her proceedings in the District Court.  With respect, that concession is properly made. The ‘relation’ referred to in paragraph (f) must be a relation between the subject matter of, or controversy in, the proceedings in the two Courts.[2]   There is plainly a relation between the subject-matter of Mrs Chang’s proceedings and Danwei’s proceedings for the division of matrimonial property because the necessary first step in the latter proceedings is the ascertainment of the property of the parties to the marriage.

    [2]    See, eg, Perlman v Perlman (1984) 155 CLR 474, 484-485 (Gibbs CJ).

12. However, Mrs Chang contends that there is no such relation if, as here, the proceedings as to the legal and equitable ownership of property are brought before the institution of the matrimonial proceedings.  It should be noted at the outset that it is not at all obvious, indeed it is very difficult to see, any rational reason for limiting the definition of ‘matrimonial cause’, and therefore the jurisdiction of the FCFCA, by reference to what will often be the accident of timing in the initiation of proceedings such as these.  In particular, there is much to be said in favour of the parties to a marriage attempting to negotiate and agree upon a division of property amicably, without precipitously bringing matrimonial proceedings.  It would be a curious result if, whilst parties were so engaged, a third-party making a claim to the property of either party to the marriage removed the issue of the equitable and legal ownership of the property from the jurisdiction of the FCFCA by first bringing proceedings in a court of general jurisdiction of this State. 

13. Nor is there a clear textual basis for construing paragraph (f) in such a way as to lead to that curious and inconvenient result.  Counsel for Mrs Chang locates the temporal requirement in the word ‘proceedings’. Counsel contends that if a proceeding by a third-party in respect to the legal and equitable ownership of the property claimed by a party to the marriage is brought first, then that proceeding cannot be ‘concurrent’ with any yet to be initiated matrimonial proceedings.  Counsel accepts that there is a concurrency with those steps in the State Court proceedings which are taken after the institution of the matrimonial proceedings but contends that the definition demands complete concurrency with the matrimonial proceedings; that is that the State proceedings must have been commenced after the institution of matrimonial proceedings.  However, if the meaning of concurrency for which Mrs Chang contends is accepted, it could equally be said that the proceedings are never concurrent unless instituted instantaneously.  

14. A proceeding may refer to an initiating application invoking the jurisdiction of a court, and may refer to an interlocutory step or procedure brought in the course of the hearing and determination of the action initiated by the initial proceeding.  The word ‘proceeding’ is also commonly used to refer to the totality of the applications, both the initiating application and subsequent interlocutory applications brought, heard, and determined in the course of an action.  Understood in that sense, proceedings are concurrent once initiated and whilst they are yet to be determined.  It is not necessary for the purposes of this application to discuss the extension of the definition of ‘matrimonial cause’ in paragraph (f) to completed matrimonial proceedings.[3]  It is sufficient to note that the extended definition supports a wider construction of the word ‘concurrent’ than the one for which Mrs Chang contends.

    [3]    Cf Perlman v Perlman (1984) 155 CLR 474.

15. Counsel for Mrs Chang relied on authorities which, in the context of a transfer application, place some importance on which proceedings were first instituted.  I am not satisfied that the consideration in those cases supports a submission that paragraph (f) is limited by the temporal condition for which Mrs Chang contends.  Rather, the emphasis on the order in which the proceedings were instituted bears on the evaluation of where the interests of justice lie and, in particular, on whether the bringing of proceedings was a strategic step in a forum shopping exercise.

16. For the above reasons, I construe the term ‘concurrent’ proceeding to refer to actions which have been instituted but have not yet been determined.

17. Alternatively, the matrimonial proceedings brought by Danwei are pending in the FCFCA and the subject matter of Mrs Chang’s proceedings are in relation to the subject-matter of those proceedings.

18. I am, therefore, not persuaded that there is any substance in Mrs Chang’s contention that the FCFCA does not have jurisdiction. 

19. I observe that s 5(1)(b)(ii) of the Cross-vesting Act sets out in subparagraphs (A), (B) and (C) the matters to which the court, before whom an application to transfer has been made, must have regard. The conjunction of those subparagraphs requires the Court to have regard to all three considerations. However, it is not necessary that all three considerations support a favourable exercise of the discretion.[4]  They remain considerations, not pre-conditions, to the exercise of the power. 

    [4]    See, eg, Comino v Kremetis (2023) 110 NSWLR 224, 240 [73] (Chen J); Hadid v Sabouh [2023] NSWSC 483, [84]-[92] (Meek J).

20. Turning my mind to the considerations in (A) and (B), this Court plainly had jurisdiction to hear Mrs Chang’s proceedings and the action would have been incapable of being instituted in the FCFCA other than in respect of, and ancillary to, an application for the division of matrimonial property.   The transfer of the proceedings is, therefore, not supported by the considerations in subparagraphs (A) or (B). 

21. However, Danwei’s application is founded on the ‘interests of justice’ consideration. The disposition of both proceedings will be affected materially by findings of fact as to what was said and the actions and expectations of the parties in respect of the ultimate ownership of the Unley property and who was to benefit therefrom.    It is plain, therefore, that if Mrs Chang’s action in this Court and Danwei’s action in the FCFCA were to be heard and determined separately, there would be an unnecessary duplication of the evidence in respect of the legal and equitable ownership of the house and the proper division of the Unley property, if it fell within the matrimonial property pool.

22. Moreover, if the actions were heard separately, there would be a real risk of inconsistent findings of intermediate facts.   Finally, it is problematic whether Jacky would be bound by any determination that the Unley property was matrimonial property in the action in the FCFCA because he is not a party to the State action.

23. Danwei’s delay is not unduly long when understood in the emotional context of marital separation. Even if Danwei had acted more quickly, it is extremely unlikely that Mrs Chang’s application would have proceeded to trial before the institution by Danwei of the matrimonial proceedings. Insofar as resultant costs may be thrown away by the delay, r 12.14 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) empowers the FCFCA to make orders for costs in relation to the proceedings before this Court, and, in particular, to allow for those costs to be calculated in accordance with the rules of this Court. That rule, and the general discretion, is wide enough also to encompass the cost practices of this Court.

24. The interests of justice plainly favour that there be a single hearing.

    Conclusion

25. I order that the proceedings be transferred to Division 1 of the FCFCA.