Harley & Harley
[2022] FedCFamC2F 241
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Harley & Harley [2022] FedCFamC2F 241
File number(s): PAC 4184 of 2019 Judgment of: JUDGE NEWBRUN Date of judgment: 8 March 2022 Catchwords: FAMILY LAW – property proceedings - proceedings transferred to the Family Court of Australia, Division 1 - Order made Legislation: Family Law Act 1975 (the Act), s. 106B
Federal Circuit and Family Court of Australia Act 2021
Corporations Act 2001 (Cth), s. 1337C
Federal Circuit Court of Australia Act 1999 (repealed)
Family Law (Child Abduction Convention) Regulations 1986 (Cth)
Cases cited: Morris & Rosetti [2017] FamCA 249 Division: Division 2 Family Law Number of paragraphs: 21 Date of last submission/s: 21 February 2022 Date of hearing: 21 February 2022 Place: Parramatta Solicitor for the Applicant: Mr McCann Solicitor for the First Respondent: Ms Sharpe Solicitor for the Second Respondent: Ms Michael ORDERS
PAC 4184 of 2019 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: MR HARLEY
Applicant
AND: MS HARLEY
First Respondent
AND: MS B HARLEY
Second Respondent
ORDER MADE BY:
JUDGE NEWBRUN
DATE OF ORDER:
8 MARCH 2022
THE COURT ORDERS THAT:
1.These property proceedings are forthwith transferred to the Federal Circuit and Family Court of Australia, Division 1, with such proceedings to be mentioned in that Court on a date to be advised to the parties.
NOTATION:
A.The file in these proceedings is now sent to the National Assessment Team for allocation of relevant Court dates in the Federal Circuit and Family Court of Australia, Division 1.
B.The Court refers to its written Reasons for Judgment in relation to the above Order.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under a pseudonym Harley & Harley has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
JUDGE NEWBRUN:
The within Reasons for Judgment relate to this Court’s Order of 8 March 2022 that these property proceedings be transferred to the Federal Circuit and Family Court of Australia, Division 1.
There are three parties to these property proceedings; the Applicant Husband, the First Respondent Wife, and the Second Respondent who is a daughter of the Husband and Wife.
BACKGROUND
On 22 November 2019, the Applicant Husband and the First Respondent Wife entered into consent final property Orders in this Court. Under those Orders, inter alia:
(a)a property at C Street, Suburb D was to be sold with the net proceeds of sale to be paid as to $50,000 to the Second Respondent, and with the balance of sale proceeds to be distributed equally between the Husband and Wife;
(b)two properties situated at E1 and E2 Street, Suburb D were to be sold with the net proceeds of sale to be distributed equally between the Husband and Wife.
The property at C Street, Suburb D was caused to be sold by the First Respondent Wife to the Second Respondent daughter. That property remains in the Second Respondent daughter’s name. The Applicant Husband contends that this property was unilaterally sold by the First Respondent Wife to the Second Respondent daughter and under market value. The First Respondent Wife responds to this contention by asserting that the sale of this property to the Second Respondent daughter was at arm’s length.
The two properties at E1 and E2 Street, Suburb D were caused to be sold by the First Respondent Wife to 3rd parties. The Applicant Husband contends that the First Respondent Wife, in breach of the Orders of 22 November 2019, unilaterally sold these two properties and then spent the net proceeds of sale. The First Respondent Wife responds to this contention by asserting, inter alia, that there was simply no net proceeds of sale remaining after payment of relevant debts to account to the Applicant Husband.
The Applicant Husband, pursuant to section 106B of the Family Law Act 1975 (the Act), seeks to set aside the sale of the property at C Street, Suburb D from the First Respondent Wife to the Second Respondent daughter. He seeks an order that he be appointed trustee for sale of that property, that that property be sold, and that the net proceeds of sale be paid to the Husband alone.
The Applicant Husband also seeks an order that the First Respondent Wife pay to the Applicant Husband the sum of $150,000.
Issues in dispute
The issues in the property dispute include the following:
(i)Whether the First Respondent Wife sold the above properties unilaterally and in breach of the Court’s Orders of 22 November 2019;
(ii)Whether the First Respondent Wife sold the property at C Street, Suburb D under market value to the Second Respondent daughter;
(iii)Whether the sale of the property at C Street, Suburb D be set aside pursuant to section 106B of the Act;
(iv)Whether, if the above property sale is set aside, the Applicant Husband should be appointed trustee for sale of that property, whether that property be sold and whether the Applicant Husband be ordered to receive the entirety of the net proceeds of sale.
(v)Whether the First Respondent Wife, in breach of the Court’s Orders of 22 November 2019, failed to account to the Applicant Husband his equal share of the net proceeds of sale of the properties at E1 and E2 Street, Suburb D;
(vi)Whether, if the First Respondent Wife did so fail to account to the Applicant Husband his equal share of the net proceeds of sale of the properties at E1 and E2 Street, Suburb D, the First Respondent Wife should pay to the Applicant Husband the sum of $150,000 or some other figure.
RELEVANT PRINCIPLES
The Court refers to the decision of Tree J in Morris & Rosetti [2017] FamCA 249. Whilst this decision pre-dates the Federal Circuit and Family Court of Australia Act 2021 (and the repeal of the Federal Circuit Court of Australia Act 1999) it is helpful to observe that His Honour sets out in that decision, in relation to transfers of proceedings between this Court and the Family Court of Australia, inter alia, the content of a former Protocol, agreed to between the heads of jurisdiction of this Court and the Family Court of Australia, in relation to such transfers, as follows:
14. The heads of jurisdiction of both Family Court and the Federal Circuit Court have agreed upon, and published, a protocol for the guidance as the appropriate court in which parties should commence proceedings. It provides as follows:
If any one of the following criteria applies, then the application for final orders ordinarily should be filed and/or heard in the Family Court of Australia (“FCoA”), if judicial resources permit, otherwise the matter should be filed and/or heard in the Federal Magistrate Court (“FMC”).
1. International child abduction.
2. International relocation.
3. Disputes as to whether a case should be heard in Australia.
4. Special medical procedures (of the type such as gender reassignment and sterilisation).
5. Contravention and related applications in parenting cases relating to orders which have been made in FCoA proceedings; which have reached a final stage of hearing or a judicial determination and which have been made within 12 months prior to filing.
6. Serious allegations of sexual abuse of a child warranting transfer to the Magellan list or similar list where applicable, and serious allegations of physical abuse of a child or serious controlling family violence warranting the attention of a superior court.
7. Complex questions of jurisdiction or law.
8. If the matter proceeds to a final hearing, it is likely it would take in excess of four days of hearing time.
Note: The FCoA has exclusive jurisdiction in relation to adoption and the validity of marriages and divorces.
Transfers
1. Either Court on its own motion or on application of a party can transfer a matter to the other Court.
2. There is no right of appeal from a decision as to transfer.
15. It is pertinent to make the following observations in relation to the protocol:
•The protocol speaks about the appropriate court in which proceedings should be commenced. It does not speak, necessarily or directly, to the matters which might inform transfer by either court, although there may be an expectation that the matters enumerated in it would be relevant to the exercise of the discretion to transfer;
•The language of the protocol admits of exception: for instance the direction that certain matters “ordinarily” should be filed in the Family Court, and the reference to “if judicial resources permit;”
•Some of the criteria require a degree subjective interpretation, for instance, the reference to “serious” allegations of abuse, and “complex” questions of law. Necessarily, these are matters upon which reasonable minds may legitimately reach different conclusions;
•Notwithstanding those observations, the intent of the protocol is to effect a relatively clear division of work between the two courts, with the Family Court undertaking work more suited to a superior court of record. Whilst terms such as “complex,” “difficult” or “complicated” might on occasion be used to try and describe that division, none are perfectly apt to describe the line of demarcation between the two courts work. That is because, particularly in children’s matters, there is almost always some degree of complexity, difficulty and complication involved in determining where the best interests of children lie.
16. The other point which should be made about the protocol is that it is an agreement between the heads of both jurisdictions. As such, it cannot lawfully fetter the discretion of either court to transfer proceedings to the other: see for instance, Re W: Publication Application (1997) 137 FLR 205 at 240 per Finn J. In fairness to those who drafted the protocol, it does not, on a plain reading of its contents, seek to do so in any event. To cast that proposition slightly differently, a judicial officer who regarded the exercise of their discretion to transfer as being required to be in conformity with the protocol would be imposing an unlawful fetter. At most, the protocol is a potentially relevant consideration.
The Central Practice Direction of the Federal Circuit and Family Court of Australia, dated 1 September 2021, provides, in relation to “Allocation between divisions”:
4.9 The appropriate Division of the Court for the hearing of a matter will be considered:
(a)as part of the initial triage and assessment process at the First Court Event, at which a small number of specialist cases which necessitate immediate transfer to Division 1 may be transferred;
(b)at the Compliance and Readiness Hearing, at which the most appropriate Division for final determination of the matter will be considered, having regard to the issues remaining in dispute; and
(c)at such other time as may be considered appropriate by the Court.
4.10 Any matter in relation to which Division 1 of the Court holds exclusive jurisdiction shall be transferred to that Division upon filing without the need for an application seeking transfer to be filed by any party to the proceedings. This includes matters involving:
(a)an exercise of jurisdiction pursuant to section 1337C of the Corporations Act 2001 (Cth); or
(b)an application pursuant to the Family Law (Child Abduction Convention) Regulations 1986 (Cth).
4.11 Determination of the appropriate Division for the hearing of a matter will be made at the Court's discretion, having regard to:
(a)the Family Law Act and the Family Law Rules;
(b)any assessment made by the Court's National Assessment Team; and
(c)any submissions made by or on behalf of one or more of the parties.
4.12 The factors relevant to the assessment of the appropriate Division for the hearing of a matter shall include:
(a)the complexity of the legal, factual or jurisdictional issues involved;
(b)whether the case involves international issues;
(c)whether the case involves multiple parties;
(d)whether the case involves multiple expert witnesses;
(e)whether the case is likely to involve questions of general importance to the development of family law jurisprudence;
(f)the likely length of the case;
(g)the respective workload of each Division;
(h)the impact on litigants of the matter being transferred;
(i)any circumstances that require the matter to be referred to a specialist list;
(j)in relation to a parenting proceeding, whether the case involves serious criminal conduct;
(k)in relation to a financial proceeding, whether the case involves:
(i)complex asset structures;
(ii)complex valuation issues;
(iii)complex taxation or like issues;
(iv)bankruptcy or insolvency; and/or
(v)the interests of an estate.
4.13 Unless otherwise ordered, a matter transferred between Divisions will retain the same priority as it had in the Division from which it was transferred.
DISCUSSION
Presently, the parties each seek competing Orders in relation to the above property issues.
There are three parties to these property proceedings; the Applicant Husband, the First Respondent Wife, and the Second Respondent who is a daughter of the Husband and Wife.
There is likely to be significant and lengthy evidence, including cross-examination, in relation to all the above issues (under the heading, at the beginning of these Reasons, “Issues in Dispute”).
To date, the parties have filed numerous and lengthy Affidavits in the proceedings. The Husband’s two Affidavits sought to be relied upon (both filed 8 July 2021) contain 169 pages; the First Respondent Wife’s Affidavit filed 15 December 2021 contains 70 pages; and the Second Respondent’s Affidavit filed 22 February 2022 contains 276 pages. That is a total for all four Affidavits of 515 pages.
There is likely to be additional tender bundle evidence by reason of the necessity to, inter alia:
(a)chart the flow of monies from the sale of the E1 and E2 Street, Suburb D properties to various third parties and elsewhere;
(b)consider the alleged contributions by the Second Respondent to the purchase of the C Street, Suburb D property;
(c)consider alleged intra family bank transfers in relation to the transfer of the C Street, Suburb D property to the Second Respondent;
(d)consider whether the sale of the E1 and E2 Street, Suburb D properties were sold at a market undervalue.
There have been numerous subpoena to produce documents filed in the proceedings including to several law firms, real estate agents, and a firm of accountants, by reason of those entities’ involvement in transactions related to the various properties. There is likely to be tendered in evidence voluminous documents from these subpoenaed records.
There is likely to be extensive and significant cross-examination at the final hearing of:
(a)The Husband;
(b)The Wife;
(c)The parties’ daughter, the Second Respondent;
(d)Lay witnesses, including solicitors, accountant, and real estate agents;
(e)Expert valuation evidence.
It will be necessary for the Court, at the final hearing of these proceedings, to hear the competing oral submissions of the parties, based upon the likely extensive and voluminous evidence before the Court.
In the above circumstances, these proceedings will likely take more than four days of final hearing, and, in the view of the Court, having regard to the former Protocol, the proceedings should be transferred.
Further, as to the Central Practice Direction:
·The proceedings are complex, involving complex factual and legal issues including:
(a)the dispersal trail and destination of large sums of money,
(b)complex valuation evidence,
(c)the Court’s possible discretionary exercise of its powers under s106B of the Act (“Transactions to defeat claims”)
·Again, having regard to the issues to be determined between the parties, and other matters referred to above, these proceedings are likely to take in excess of four final hearing days.
·The proceedings are likely to be heard and determined at less cost and more convenience to the parties than if the proceedings are not transferred.
·The final hearing of these proceedings is likely to be heard earlier in the Family Court of Australia, Division 1, than in this Court, with this Court having a considerable number of cases, in particular contested parenting hearings, awaiting a timely allocation of hearing dates.
·The administration of justice is best served by transferring these proceedings, and the Court has regard to its discussions above.
The Court, in the exercise of its discretion, transfers these proceedings to the Federal Circuit and Family Court of Australia, Division 1.
I certify that the preceding twenty-one (21) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Newbrun. Associate:
Dated: 8 March 2022
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