Gothschld and Gothschild

[2010] FamCA 385

FAMILY COURT OF AUSTRALIA

GOTHSCHLD & GOTHSCHILD [2010] FamCA 385

FAMILY LAW – PRACTICE AND PROCEDURE – Transfer of cases to Federal Magistrates Court of Australia where interlocutory steps are contested

Family Law Act 1975 (Cth)
Federal Magistrates Act 1999 (Cth)

Garde & Raddison [2008] FamCAFC 198

APPLICANT: Mr Gothschild

RESPONDENT: Ms Gothschild

FILE NUMBER: MLC 8626 of 2007

DATE DELIVERED: 20 MAY 2010

PLACE DELIVERED: Melbourne

PLACE HEARD: Melbourne

JUDGMENT OF: THE HONOURABLE JUSTICE CRONIN

HEARING DATE: 21 APRIL 2010

REPRESENTATION

COUNSEL FOR THE APPLICANT: MR PETER DAVIS

SOLICITOR FOR THE APPLICANT: PIETRZAK SOLICITORS

COUNSEL FOR THE RESPONDENT: MS BEN-SIMON

SOLICITOR FOR THE RESPONDENT: MCBAIN LAWYERS

Orders

1. That the order made by Registrar Mestrovic on 2 March 2010 transferring the proceedings to the Federal Magistrates Court of Australia is discharged.

2. That all outstanding proceedings be adjourned before me for mention at 9.00am on 26 May 2010.

3. That the registrar advise Federal Magistrate Bender of these orders.

4. That the costs of this day of both parties are reserved to the hearing on 26 May 2010.

IT IS NOTED that publication of this judgment under the pseudonym Gothschild & Gothschild is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth)

FAMILY COURT OF AUSTRALIA AT MELBOURNE

FILE NUMBER: MLC 8626  of 2007

MR GOTHSCHILD

Applicant

And

MS GOTHSCHILD

Respondent

REASONS FOR JUDGMENT

1. There are property proceedings which were begun initially in 2007, outstanding between Mr Gothschild (“the husband”) and Ms Gothschild (“the wife”).  Their parenting issues were resolved by court orders.  At that time, the property proceedings between them were discontinued. 

2. At a directions hearing on 2 March 2010, a registrar, over opposition from counsel for the wife, transferred the property proceedings to the Federal Magistrates Court of Australia.  It being a directions hearing and there being no formal reasons given, I am not able to say what the reasons were for the transfer.  The wife filed an application to review the registrar’s decision and as such, the reasons of the registrar become irrelevant because the hearing before me became a de novo hearing.

3. On 21 April 2010 in a busy duty list, I heard submissions from Mr Davis of counsel for the wife and Ms Ben-Simon of counsel for the husband.  It was common ground that the issue was to be heard on the de novo basis.

4. At the conclusion of argument, I indicated that I would discharge the registrar’s order.  In fairness to the parties, the husband’s counsel said that the husband had no real objection to remaining in the Family Court of Australia if the hearing could be provided more quickly than the Federal Magistrates Court of Australia.  The speed with which the matter could be heard was not the basis upon which I discharged the registrar’s order.

5. This case raised the question of the distinction between complex and less complex cases and how that issue might be assessed.  It also raises the question of whether a matter can be complex by virtue of its interlocutory steps despite the fact that the final hearing might not necessarily be so complex.

6. Section 39(1A) of the Family Law Act 1975 (Cth) (“the Act”) sets out the various matters in the definition of matrimonial cause that may be instituted under the Act in the Federal Magistrates Court.

7. Section 39(5AA) of the Act provides that the Federal Magistrates Court has and is taken to have always had, jurisdiction in respect of the matters referred to.

8. The legislation will therefore show that the Family Court of Australia and the Federal Magistrates Court of Australia have concurrent jurisdiction over most matters that come before either court.

9. Section 33B of the Act gives this Court a discretionary power to transfer proceedings to the Federal Magistrates Court. Such is the discretionary power, that the Family Court of Australia may transfer proceedings of its own initiative. The provision is so wide that the Act provides that there is no appeal against such an order for transfer.

10. When required to decide whether to transfer a proceeding to the Federal Magistrates Court, s 33B(6) provides that the court must have regard to:

    (a)any standard Rules of Court made for the purposes of (the Act); and

    (b)whether proceedings in respect of an associated matter are pending in the Federal Magistrates Court; and

    (c)whether the resources of the Federal Magistrates Court are sufficient to hear and determine the proceedings; and

    (d)the interests of the administration of justice.

11. Rule 11.17 of the Family Law Rules 2004 makes the provision for a party to apply for a transfer of proceedings. If the party makes the application for transfer, a number of matters set out in Rule 11.18(1) may be considered by the court.  Those are:

    (a)the public interest;

    (b)whether the case, if transferred or removed, is likely to be dealt with:

    (i)at less cost to the parties;

    (ii)at more convenience to the parties; or

    (iii)earlier;

    (c)the availability of a judicial officer specialising in the type of case to which the application relates;

    (d)the availability of particular procedures appropriate to the case;

    (e)the financial value of the claim;

    (f)the complexity of the facts, legal issues, remedies and procedures involved;

    (g)the adequacy of the available facilities, having regard to any disability of a party or witness; and

    (h)the wishes of the parties.

12. In this case, it would seem that the court initiated the transfer although the husband was content for that to occur.

13. It is a matter for the court when exercising its initiative to cautiously determine within the scope of the Act, the basis for a transfer. As a matter of justice, the parties’ views need to be considered.

14. Transfers between the two courts occur both ways and it is useful to compare the bases upon which the discretionary jurisdiction is exercised in the opposite direction.

15. Section 39 of the Federal Magistrates Act 1999 (Cth) similarly provides that a court may transfer of its own initiative and when deciding whether to so transfer, the Federal Magistrates Court must have regard to:

    (a)any rules of court made for the purposes of the transfer; and

    (b)whether proceedings in respect of an associated matter are pending in the Family Court; and

    (c)whether the resources of the Federal Magistrates Court are sufficient to hear and determine the proceeding; and

    (d)the interests of the administration of justice.

16. The Federal Magistrates Court Rules 2001 are the rules referred to in the Act. Those rules provide the following matters as being relevant:

    (a)whether the proceeding is likely to involve questions of general importance, such that it would be desirable for there to be a decision of the Federal Court or the Family Court on one or more of the points in issue;

    (b)whether if the proceeding is transferred, it is likely to be heard and determined at less cost and more convenience to the parties than if the proceeding is not transferred;

    (c)whether the proceeding will be heard earlier in the Federal Magistrates Court;

    (d)the availability of particular procedures appropriate for the class of proceeding.

17. In this case, counsel for the wife pointed to and argued strongly (a) and (d) above of the Federal Magistrates Court Rules as guides for this particular case to remain in the Family Court.

18. In January 2010, the Chief Justice of the Family Court of Australia and the Chief Federal Magistrate published a protocol.  The protocol was for the “guidance of the legal profession and litigants, so as to enable matter to be directed properly to the court appropriate to hear them”.  It is important to note that the protocol is a guide and each case must be assessed on its merits to take into account not just judicial resources but also the justice pursued by the parties.  As the published protocol pointed out:

    (The protocol) may on occasions give way to the imperatives of where a case can best be heard.

19. The various criteria set out in the protocol refer to specific types of case and the only one of assistance in this case refers to “complex questions of jurisdictional law”.

20. It is not to the point that it might be viewed by the husband as a simple or uncomplicated matter.  This is as much about perception and the issue of justice to a litigant as it is to the question of the time that a case would take or the resources that would require for it to be heard.  In this particular case, if it can be later shown that the perception is misguided or simply wrong, the Court can still transfer the case to the Federal Magistrates Court and/or make orders for costs against the litigant.

21. In Garde & Raddison [2008] FamCAFC 198, the Full Court had the opportunity to consider a case in which the Federal Magistrate declined to transfer a proceedings to the Family Court. In the course of their reasons associated with other matters, their Honours referred to the fact that it was a discretionary exercise but that such discretion must be exercised judicially taking into account the relevant legislation and rules and “the wider context in which two courts with a concurrent jurisdiction operate”. The context to which the Full Court was referring was that the more complex and longer matters would be transferred to the Family Court as a general rule. Complexity however includes the question of the interlocutory process.

22. In her application seeking to review the decision of the registrar, the wife relied upon the affidavit of her solicitor.  He set out his evidence in some detail.

23. The solicitor said that after some conferences with the wife he thought the case had all the potential for becoming “extremely complex” so he engaged counsel.  He then said:

    In my view these proceedings should remain in the Family Court because of the level of complexity that these proceedings will involve and because, it is respectfully submitted, of the special skills and expertise of the Family Court judge.

    I reject that as a basis for transfer.  This is not about special skills and expertise of judicial personnel but rather about resources and the distinction to which I earlier referred in Garde & Raddison. The legislature has clearly given both courts the same jurisdiction and it must therefore be concluded that the legislature accepted the capacity of the judiciary to carry out the various functions under the Act.

24. The solicitor then went on to say that the proceedings were likely to involve complex issues of both law and fact.  He pointed to the fact that the husband had been actively engaged in a property development business yet his income was modest.  He said that the husband took monies from the joint account at the time of separation and that there were very large deposits going out of his personal bank account leading to the conclusion that whatever the husband had been doing, he was involved in much more business activity than selling or valuing real estate at the modest income he disclosed.  The solicitor then referred to the fact that the husband was involved in a joint venture under which he was to receive as remuneration, developed lots from the contract.  He said this was a significant property development involving numerous lots.  Despite the fact that the husband maintained that his receipt of funds from the development was modest, the solicitor complained that there had been a blanket refusal by the husband to provide the detailed discovery and inspection process necessary for the development to be investigated. 

25. The solicitor’s affidavit then turned to the question of “real complexity” because of the fact that the husband had an entitlement under his mother’s will.  The complexity according to the solicitor, was that the husband’s mother was incapacitated with advanced senile dementia.  It was asserted that she is 86 years of age and in poor general health and living in a nursing home.  He said that the husband and his brother were the only siblings and beneficiaries under the mother’s will and that they held an enduring power of attorney in respect of the mother’s financial and administrative affairs.

26. The relevance of the mother’s position according to the solicitor was that the mother’s estate was said to be in excess of $10 million and the husband stood to inherit half of that at some stage in the future.

27. The affidavit went on to make observations about the husband’s lifestyle and then the following:

    The Husband through his Solicitor is refusing to discover any documents relating to the Husbands (sic) over his mothers (sic) estate or his mothers (sic) will undercover (sic) of objection that such documents are irrelevant to these proceedings.

28. The solicitor complained that the husband refused to provide discovery and inspection of his financial records other than his personal banking records.  This was the subject of submission by Mr Davis of counsel for the wife.  Counsel for the husband denied that there was any such refusal to provide discovery.  That however highlights part of the dilemma in respect of the complexity of interlocutory processes.  It would seem clear on the material thus far that there is an issue both as to discovery and also to the entitlement to view things such as the will of the husband’s mother and to examine affairs that may shed some light on the future financial circumstances of the husband albeit that they may have limited impact upon the ultimate result.

29. The solicitor then said that the wife had engaged an expert for the purposes of giving advice and he requested documents from the husband but they had been refused.

30. The solicitor then asserted:

    That I say and verily believe that the ability of the Wife to properly investigate the issues relevant to these proceedings will be compromised if these proceedings are transferred to the Federal Magistrates Court.

    I reject that on the basis that it is tantamount to an assertion that the Federal Magistrates Court does not have any interlocutory processes through which the matters to which I have earlier referred can be addressed. There may be difficulties having regard to s 45 of the Federal Magistrates Act which precludes certain interlocutory processes excepting certain circumstances.  What that means however is that the applications would need to be made before there could be any suggestion of any such “compromised” position. 

31. The solicitor said that the process of interlocutory investigation was difficult in the Federal Magistrates Court because of the nature of the duty list procedure.  The reference to the duty list was to the fact that federal magistrates gave priority to cases involving urgent or important children’s and parenting matters making any application to enforce specific discovery issues “problematic” and “somewhat of a lottery” in respect of the ability to devote any time to those procedural issues.

32. Whilst those observations might have come out of either experience or anecdote, they are clearly not correct as a matter of law.  The federal magistrates have the appropriate power as well as the obligation to consider their functions as set out in the relevant legislation.  I accept that it may now be seen by the wife’s practitioner that the case is a little more difficult because of the interlocutory processes but in my view, that is not a basis to make the assertion that the process is something of a “lottery”.

33. The solicitor claimed that there was no procedure for the return of subpoenae in the Federal Magistrates Court.  That is clearly incorrect having regard to the fact that there is a process by which documents can be pursued.  Whilst the process may be different from what occurs in this Court, there is a clear procedure for parties to obtain and examine documents.

34. The solicitor then complained that the Federal Magistrates Court would give final directions for trial at the first procedural return date “compelling the wife to make important tactical decisions about the conduct of the litigation” before she had the opportunity to investigate the husband’s financial affairs.

35. There is clearly a provision not only in the Federal Magistrates Court but in this Court as well where parties are required to seek orders with precision.  However, both courts provide for discovery processes being undertaken before cases begin albeit in different ways.  There will always be situations in which a party cannot plead not only the precise orders but their cause of action if they do not have access to information to which they are entitled.  It is perfectly appropriate in those circumstances if the assertion can be justified, for the party to say that they wish to decline to be precise about the nature of the orders sought until all of the relevant information is made available to them.  It is no longer acceptable for that general statement to be made without foundation but in a case such as this having regard to the assertions to which I have earlier referred, the husband could hardly complain if the wife adopted the position of keeping her powder dry.  She cannot however keep her powder dry once the information that she legitimately pursues is made available to her.

36. Other matters about which the solicitor said that the duty list of the Federal Magistrates Court was not conducive to interlocutory investigation included those relating to the husband’s mother and the husband’s lack of response to discovery.  Again I point out that the process is available in the Federal Magistrates Court and I reject any suggestion that the Federal Magistrates Court does not approach the matter with the same concern and diligence that this Court does.

37. In the affidavit, the solicitor said that he had been advised by counsel that the Federal Magistrates Court significantly overlisted cases on defended days in the expectation that the majority of those cases would resolve with consent orders.  Courts of both persuasions have limited resources.  Both courts have an overlisting policy albeit those may be different depending on the expected duration of the various cases.  It is not appropriate to reject a transfer based on an overlisting policy.  It is a serious consideration for a litigant if there is genuine belief that the matter may take a number of days.  The Federal Magistrates Court no longer has a policy of only dealing with cases that run for up to two days.  Duration is however one of the resource considerations.  The issue is a consideration but not a defining one.  The determining factor really is the question of complexity and importance.

38. The solicitor said and it was reiterated by counsel for the wife that the Family Court of Australia had been the wife’s chosen forum and that that should be respected.  That is clearly a matter for consideration.  However, it is only when the interlocutory processes in this case are completed that it will be apparent as to whether or not the case is a complex one.  At that point in time, having regard to the legislature’s view about the concurrent jurisdiction of the courts, there can be no argument about choice of forum.  It is at that point that each court should be able to determine the transfer based on the availability of resources.  There is clearly merit in the argument about perception relating to the issue of the determination of whether or not the matter is complex and in my view, the resource issue is less significant at that point in time.

39. The affidavit of the solicitor then went on to say that it was respectfully submitted that judges in the Family Court had highly unique skill and experience in dealing with litigation with factual and/or legal complexities.  He pointed to the fact that the two tier family law system was such as to reserve to the Family Court those cases that clearly fell outside that which was considered to be “the norm”.  In my view the solicitor is wrong. 

1. The question of capacity as I have pointed out is a matter for the legislature.  The issue of resources is one for the courts.  Complexity includes issues of importance both to the litigants and to the community.  That ought be the ultimate defining matter where there is a decision to be made in a case like this. 

2. The solicitor went on to assert that the resources of the Federal Magistrates Court were insufficient and inappropriate to properly hear and determine the proceedings.  I reject that for the reasons set out above.

3. I am satisfied in this case that there is an argument that it may not only be complex but also have issues of importance.  Those are set out above.  However, that final decision cannot be made until the interlocutory processes have been completed.  There is a claim in the affidavit that the husband is reticent about the relevance of the discovery issues.  It may be that the wife has to pursue third party discovery processes.  I accept therefore that the wife through her lawyers, accepts that the interlocutory processes may be complex and may be given more attention simply by virtue of time in this Court.  It is for that reason that I indicated that after those issues were determined, should this Court determine that the matter is no longer complex then, as a matter of the interests of justice, it should be transferred.

4. Thus, if a case can be seen to be complex because of the interlocutory processes, it ought not be transferred as it was here.

5. I am not able to say whether other facts set out in the affidavit of the solicitor are correct.  I have had the opportunity of reading an affidavit by the husband filed 12 April 2010 in which he sets out the matters upon which he would say the case should be determined.  On the basis of his material, it would seem to be simple.  However, as I earlier pointed out, access to justice is as much about perception as it is about resources.  I accept in this case therefore that there are interlocutory processes that the wife genuinely wants to pursue.

6. In argument before me, counsel for the wife laid down the gauntlet to counsel for the husband about the provision of information and documents and it was quite clear that there is a dispute.  One such example was that the husband asserts that his mother’s affairs are conducted through a power of attorney held by his brother.  The husband’s position was that it was not agreed that the wife could have access to all of the relevant documents of the mother from the husband because he would have to get cooperation from his brother.  That example alone indicates there is a level of difficulty, complexity and importance in this case.

7. Accordingly, all of the matters set out in Rule 11.18 of the Family Law Rules 2004 can be seen to apply in this case. For the purposes of s 33B(6) of the Act, I have had regard to the relevant rules and I am not prepared at this stage to say that there are not sufficient resources in the Federal Magistrates Court for the matter to be there heard. I am however making a finding that it is in the interests of the administration of justice that a party who issues proceedings in the Family Court with clear argument about interlocutory processes that may be more difficult to complete in the Federal Magistrates Court having regard to s 45 of the Federal Magistrates Act and the obvious reticence of the husband, it is appropriate for the matter to remain in this Court.  Accordingly, I discharge the order of the registrar.

I certify that the preceding Forty Six (46) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Cronin

Associate: 

Date:  20 May 2010