Hurst v Koszewski - [2019] SASC 67

SUPREME COURT OF SOUTH AUSTRALIA
(Civil: Application)
HURST v KOSZEWSKI
[2019] SASC 67
Judgment of The Honourable Justice Parker
3 May 2019
COURTS AND JUDGES - COURTS - JURISDICTION AND POWERS - CONCURRENT JURISDICTION OF DIFFERENT COURTS - TRANSFER OF PROCEEDINGS UNDER CROSS-VESTING LEGISLATION
FAMILY LAW AND CHILD WELFARE - THE FAMILY LAW ACT 1975 (CTH) AND RELATED LEGISLATION - JURISDICTION - DE FACTO RELATIONSHIPS
This is an interlocutory application made by the defendant for the proceedings be transferred to the Family Court of Australia under s 5(1) of the Jurisdiction of Courts (Cross-vesting) Act 1987 (SA).
The plaintiff commenced proceedings in this Court seeking the return of money and items provided to the defendant over the course of their relationship with one another. Subsequently, the defendant commenced proceedings in the Family Court, seeking a declaration under s 90RD of the Family Law Act that a de facto relationship existed and also orders in respect of spousal maintenance and the division of property.
The parties dispute whether they were in a “de facto relationship” within the meaning of the Family Law Act 1975 (Cth), a jurisdictional fact upon which the Family Court’s substantive original jurisdiction in respect of de facto financial causes under s 31(1)(aa) of the Family Law Act depends. The parties therefore dispute whether or not the proceedings in this Court should or can be transferred to the Family Court prior to the making of a determination by that Court that there was a de facto relationship and also that the relationship was of sufficient duration to ground its jurisdiction.
Held, per Parker J, dismissing the application:
1. Justice can best be done if one court is to resolve the whole of a justiciable controversy (at [31]).
2. The Family Court cannot grant substantive relief in a de facto financial cause under Part VIIIAB of the Family Law Act without having first determined that there was a de facto relationship (at [32]-[40]).
3. It is not in the interests of justice to transfer proceedings to the Family Court in circumstances where it is presently uncertain whether the Family Court has jurisdiction because of a dispute as to the existence of a de facto relationship (at [41]-[45]).
Jurisdiction of Courts (Cross-vesting) Act 1987 (SA) s 5; Jurisdiction of Courts (Cross-vesting) Act 1987 (NSW) s 5; Family Law Act 1975 (Cth) s 4, s 4AA, s 31, s 39B, s 90RC, s 90RD, s 90SB, s 90SD, s 90SK, s 114; Commonwealth Powers (De Facto Relationships) Act 2009 (SA) s 4, referred to.
Norton v Locke (2013) 284 FLR 51; Whitehouse v Whitehouse (2009) 236 FLR 272; Klintock v Ferder [2010] FamCA 162; Petrotimor Companhia de Petroleos SARL v Commonwealth (2003) 128 FCR 507; Valceski v Valceski (2007) 70 NSWLR 36; Benlair Pty Ltd v Terrigal Grosvenor Lodge Pty Ltd [2006] NSWSC 339; Re Wakim; Exparte McNally (1999) 198 CLR 511, considered.

HURST v KOSZEWSKI
[2019] SASC 67

PARKER J: This is an interlocutory application made by the defendant for the proceedings be transferred to the Family Court of Australia under s 5(1) of the Jurisdiction of Courts (Cross-vesting) Act 1987 (SA).
For the reasons that follow, I dismiss the application.
Background
In mid to late 2014, the plaintiff and defendant entered into a relationship. Their relationship subsisted until early 2019. The plaintiff and defendant dispute the exact nature of the relationship. The defendant asserts that their relationship constituted a “de facto relationship” within the meaning of s 4AA of the Family Law Act 1975 (Cth). The plaintiff denies that proposition.
Notwithstanding their dispute as to the nature of the relationship, the parties agree that over the course of their relationship the plaintiff gave the defendant substantial sums of money, bought her expensive items of jewellery and provided her with a luxury motor vehicle for her personal use. The defendant used the money provided to her by the plaintiff to pay rent and for other personal expenditure. The amount of money provided to the defendant was significantly in excess of that required for the payment of rent. The financial arrangement between the plaintiff and defendant ended with the demise of their relationship.
The plaintiff now asserts that the money and items provided to the defendant always remained his property and were provided for her use only while their relationship subsisted. Alternatively, he asserts that the defendant held the relevant property on trust for him. On that basis, on 7 February 2019 he commenced the present proceedings in this Court seeking the return of unspent money in the sum of $87,000, items purchased with the money provided and the motor vehicle. Subsequently, on 6 March 2019, the defendant commenced proceedings against the plaintiff in the Family Court, seeking a declaration under s 90RD of the Family Law Act that a de facto relationship existed and also orders in respect of spousal maintenance and the division of property.
The defendant now applies for the proceedings in this Court to be cross-vested to the Family Court. The plaintiff resists that application.
Defendant’s submissions
The defendant submits that only the Family Court can address the division of property following the breakdown of their de facto relationship.
Under the Family Law Act, the Family Court has jurisdiction, upon the breakdown of a de facto relationship, to determine matters including spousal maintenance, interim spousal maintenance and the division of property. The defendant submits that the issues in dispute in these proceedings arise from the breakdown of a de facto relationship and are therefore squarely within the exclusive jurisdiction of the Family Court.
The defendant submits that this jurisdiction is not confined to circumstances in which the relevant jurisdictional facts (including the actual existence of a de facto relationship) have been determined.[1] That is because a Court always has jurisdiction to determine its own jurisdiction, this being its first duty. The jurisdiction is invoked by virtue of the substratum of facts, not from the determination of the Court.
[1] Norton v Locke (2013) 284 FLR 51.
The defendant further submits that it is in the interests of justice to refer the proceedings to the Family Court. The effect of not making a referral would be that the defendant is put to the cost and inconvenience of two matters arising from the same factual substratum being litigated in separate jurisdictions.
Plaintiff’s submissions
The plaintiff submits that the application should be dismissed with costs.
The plaintiff submits that this Court should only transfer the proceedings to the Family Court if it considers that the Family Court has substantive jurisdiction over the proceedings. That being more than merely the jurisdiction to determine whether it has jurisdiction.
In the case of a claim under Part VIIIAB of the Family Law Act in respect of a de facto relationship, the Family Court only has substantive jurisdiction upon it determining the existence of the de facto relationship. Although the Family Court also has jurisdiction in addition to its original statutory jurisdiction, being jurisdiction over the single justiciable controversy in respect of the matter, such jurisdiction only arises where the original jurisdiction has otherwise been properly invoked. There cannot be jurisdiction over other aspects of the matter that fall outside the original jurisdiction.[2]
[2] Whitehouse v Whitehouse (2009) 236 FLR 272; Klintock v Ferder [2010] FamCA 162; Petrotimor Companhia de Petroleos SARL v Commonwealth (2003) 128 FCR 507.
The plaintiff submits that the actual existence of a de facto relationship (and not the mere assertion of the existence of such a relationship) is a jurisdictional fact. Until such time as the Family Court determines the existence of a de facto relationship, it does not have any original jurisdiction nor any other jurisdiction over these proceedings, save for jurisdiction to determine whether it has jurisdiction.[3] In circumstances where there is no agreement between parties as to the existence of a de facto relationship, the Family Court must conduct a hearing or a trial so as to determine the existence of the de facto relationship before it can invoke its jurisdiction upon finding that such a relationship had existed.
[3] Norton v Locke (2013) 284 FLR 51.
As there is, at present, no federal matter for which the Family Court can be found to have substantive jurisdiction, it is not more appropriate for these proceedings to be determined by the Family Court rather than by this Court. The application should therefore be dismissed.
Consideration
The Jurisdiction of Courts (Cross-vesting) Act
The application for the referral of the proceedings to the Family Court is made under s 5(1) of the Jurisdiction of Courts (Cross-vesting) Act, which provides:
5—Transfer of proceedings
(1) Where—
(a)a proceeding (in this subsection referred to as the relevant proceeding) is pending in the Supreme Court; and
(b)    —
(ii)    it appears to the Supreme Court that having regard to—
(A)whether, in the opinion of the Supreme Court, apart from any law of the Commonwealth or another State relating to cross-vesting of jurisdiction and apart from any accrued jurisdiction of the Federal Court or the Family Court, the relevant proceeding or a substantial part of the relevant proceeding would have been incapable of being instituted in the Supreme Court and capable of being instituted in the Federal Court or the Family Court; and
(B)the extent to which, in the opinion of the Supreme Court, the matters for determination in the relevant proceeding are matters arising under or involving questions as to the application, interpretation or validity of a law of the Commonwealth and not within the jurisdiction of the Supreme Court apart from this Act and any law of the Commonwealth or another State relating to cross-vesting of jurisdiction; and
(C)     the interests of justice,
it is more appropriate that the relevant proceeding be determined by the Federal Court or the Family Court, as the case may be,
the Supreme Court shall transfer the relevant proceeding to the Federal Court or the Family Court, as the case may be.
The Family Law Act
South Australia conferred jurisdiction upon the Family Court over financial matters relating to the breakdown of de facto relationships pursuant to s 4 of the Commonwealth Powers (De Facto Relationships) Act 2009 (SA) with effect from 1 July 2010. That transfer of jurisdiction was accepted by the Commonwealth.
Section 90RC(2) of the Family Law Act provides that the “de facto financial provisions”[4] exclude the operation of State laws concerning financial matters relating to the breakdown of a de facto relationship. The exclusion of State laws is subject to s 90RC(3). The latter preserves the operation of State laws in cases where the relationship conditions in s 90SB[5] or the geographical conditions in s 90SD or s 90SK are not satisfied.[6] Neither party has contended in this Court that any of the conditions in s 90SB, s 90SD or s 90SK are not satisfied in the present proceedings.
[4] That term is defined in s 90RC(1) to mean, in essence, the various provisions of the Family Law Act dealing with the making of orders concerning financial matters relating to the breakdown of a de facto relationship.
[5] The relationship conditions under s 90SB require that the relationship existed for an aggregate of two years, or a child has been born of the relationship or the Court is satisfied that a serious injustice would result if an order was not made having regard to the contributions made by a party as a parent or homemaker.
[6] The geographical conditions are only relevant if the parties have lived in Western Australia during their relationship.
Section 31(1)(aa) of the Family Law Act confers original jurisdiction on the Family Court in respect of “matters arising under this Act in respect of which de facto financial causes are instituted under this Act”.[7] Section 4(1) defines a “de facto financial cause” to include:
[7]    See also Family Law Act s 39B.
(a)    proceedings between the parties to a de facto relationship with respect to the maintenance of one of them after the breakdown of their de facto relationship; or
(b)    proceedings between:
(i)a party to a de facto relationship; and
(ii)the bankruptcy trustee of a bankrupt party to the de facto relationship;
with respect to the maintenance of the first‑mentioned party after the breakdown of the de facto relationship; or
(c)    proceedings between the parties to a de facto relationship with respect to the distribution, after the breakdown of the de facto relationship, of the property of the parties or either of them; or
…
The term “de facto relationship” is in turn defined in s 4AA. It is unnecessary to refer to the content of that definition. However, I note that an evaluative judicial judgment will be required in light of all the relevant evidence so as to determine, first, whether the parties were in a de facto relationship as defined, and secondly, whether that relationship subsisted for the period of two years required under s 90SB.
Norton v Locke
Both parties place reliance upon the decision of the Full Court of the Family Court in Norton v Locke concerning the extent of the Family Court’s jurisdiction.[8] However, they submit that the decision stands for different principles. The plaintiff submits that the Full Court held that it lacked jurisdiction to grant an injunction under s 114(2A) of the Family Law Act as the existence of a de facto relationship had not been established. The defendant submits that the Full Court did not find that there was a lack of jurisdiction but rather that the criteria for the grant of an injunction were not made out.
[8] (2013) 284 FLR 51.
In Norton, the appellant and respondent were in dispute as to whether their relationship constituted a de facto relationship within the meaning of the Family Law Act. The judge at first instance granted an injunction under s 114(2A) of the Family Law Act. The injunction restrained the appellant from evicting the respondent from and otherwise dealing with certain real property and required him to meet outgoings on the property. The Full Court allowed an appeal against the grant of the injunction.
The Full Court in Norton held that the Court would only have jurisdiction to grant an injunction under s 114(2A) “in a de facto financial cause”.[9] The existence of such a cause was “dependent upon the establishment of facts central to jurisdiction which are bona fide in dispute and which have not been established.”[10] Until the relevant jurisdictional facts were satisfied, an injunction could not be granted under s 114(2A).
[9] Ibid at 57 [18], 61-62 [42] (Bryant CJ, Murphy and Benjamin JJ).
[10] Ibid at 62 [42].
The Full Court also held that the Court had jurisdiction to embark upon proceedings for the purpose of determining whether the relevant jurisdictional facts existed, i.e. whether there was a de facto relationship.[11] The Full Court further held that the Court also has a narrow power to make orders that are necessary for the purpose of determining whether it had jurisdiction.[12] That narrow power extended to the grant of relief “preserving the status quo”.[13] However, the Full Court found that the facts in Norton did not support the grant of an injunction for the purpose of “preserving the status quo”.[14]
[11] Ibid at 62 [43].
[12] Ibid.
[13] Ibid at 62-63 [44]-[50].
[14] Ibid at 69 [73]-[74].
Valceski v Valceski
The principles underlying s 5 of the Jurisdiction of Courts (Cross-vesting) Act 1987 (NSW) were examined by the Supreme Court of New South Wales in Valceski v Valceski. [15] The NSW provision is not materially different to s 5 of the South Australian Act.
[15] (2007) 70 NSWLR 36.
The facts in Valceski were significantly different from the present matter. The parties were legally married. The wife instituted proceedings for a property settlement in the Family Court. The husband had become the sole registered proprietor of the former matrimonial home following the transfer of his father’s interest in the property. The father commenced equitable proceedings in the Supreme Court to set aside the transfer. The wife then sought a declaration in the Family Court that the husband’s family had no interest in the property and also applied to the Supreme Court for a transfer of the equitable proceedings to the Family Court.
Brereton J held that it was not seriously arguable that the Family Court did not have power under its accrued jurisdiction to deal with the equitable claim. The claim formed a part of the justiciable controversy in respect of which the matrimonial proceedings had been brought. Upon the Family Court being seized of jurisdiction in respect of a “matter” arising under the Family Law Act, the jurisdiction of the Court extended to the whole of the matter even though its determination would require the application of State law. His Honour further held that while there may be a discretion to decline to exercise accrued jurisdiction, it will be an exceptional case in which that discretion can properly be exercised so that the whole of the justiciable controversy is not resolved in one court.
In light of that observation, Brereton J held that justice could best be done by one court resolving the whole of the justiciable controversy so as to avoid duplication and inconsistency. On that basis his Honour ordered that the equitable claim should be transferred to the Family Court under s 5.
Benlair Pty Ltd v Terrigal Grosvenor Lodge Pty Ltd
In Benlair Pty Ltd v Terrigal Grosvenor Lodge Pty Ltd, Nicholas J considered an application to transfer proceedings from the Supreme Court of New South Wales to the Family Court.[16] The claim for equitable relief made in the Supreme Court was not between the parties to the marriage but rather companies connected with them. It was asserted that the defendant held property on trust for the plaintiff. Claims for the adjustment of property interests were advanced in the Family Court proceedings. The Family Court property dispute and the equitable proceedings in the Supreme Court would involve many common issues and witnesses. The Supreme Court defendant contended that the claims advanced in that Court were not within the original jurisdiction or the accrued jurisdiction of the Family Court.
[16] [2006] NSWSC 339.
Nicholas J stated:[17]
The defendant has argued that the Family Court has no jurisdiction to determine the proceeding. The plaintiff submitted that there is jurisdiction, but if there is a dispute it should be left to the Family Court to decide. Presumably, if the Family Court found that it had no jurisdiction to deal with the plaintiff’s claims it would remit the proceeding back to this Court.
As the matter presently stands, I find it highly likely that if the proceeding is transferred a contested issue of jurisdiction will be raised for determination. Although I express no view as to the probable outcome, at present I am unpersuaded of the Family Court’s jurisdiction to determine the proceeding. I find it difficult to accept that this Court would readily conclude that it was in the interests of justice to transfer a proceeding from a court whose jurisdiction was agreed to one whose jurisdiction would be challenged and would have to be decided.
Accordingly, in my opinion considerations of the interests of justice preclude the finding that it is more appropriate that the proceeding be determined by the Family Court. It is presently in an appropriate court, the jurisdiction of which is not in doubt. It cannot be in the interests of justice to transfer the proceeding to a court whose jurisdiction is arguable and uncertain, and which, if jurisdiction is found to be lacking, will remit it back to this Court.
[17] Ibid at [56]-[58] (Nicholas J).
Discussion

The observation by Brereton J in Valceski that justice can best be done if one court is to resolve the whole of a justiciable controversy is plainly correct and I proceed on that basis. The avoidance, where possible, of duplication and inconsistency between courts is, of course, the object of the cross-vesting legislation. However, in contrast to the present case, there was no issue as to the jurisdiction of the Family Court in Valceski as the parties were married.
The essential factual difference between the plaintiff and the defendant is whether or not a de facto relationship existed between them. Both parties accept that if a de facto relationship did exist, then the Family Court would have exclusive jurisdiction. However, at present neither this Court nor the Family Court have made any finding as to the existence of a de facto relationship or its duration.[18]
[18] As part of the proceedings in the Family Court, the defendant has applied for a declaration of a de facto relationship under s 90RD. The Family Court has not yet determined this application.
The defendant submits that the effect of dismissing her cross-vesting application would be that she is put to the cost and inconvenience of litigation arising from the same factual substratum in both this Court and the Family Court. Although the duplication of proceedings in different jurisdictions weighs heavily in favour of granting a transfer application, it is also most undesirable that proceedings be transferred back and forth between this Court and the Family Court. To permit this to occur would generate unnecessary cost and inconvenience for both the parties and the respective courts.
It is plainly the case that the existence of a de facto relationship is a jurisdictional fact upon which the Family Court’s substantive original jurisdiction in respect of de facto financial causes under s 31(1)(aa) of the Family Law Act depends. The Family Court has jurisdiction to make a finding as to the existence (or not) of this jurisdictional fact and thereby determine its own jurisdiction. However, of itself, this does not indicate that the interests of justice support transfer to the Family Court.
If the present proceedings were to be transferred to the Family Court, and if that Court found that there is a de facto financial cause, the parties acknowledge that the Family Court would have jurisdiction to deal with the whole of the justiciable controversy between them. That jurisdiction would include resolution of any equitable claim of the type advanced by the plaintiff in the present proceeding. The equitable claim would be an element of the de facto financial cause.[19]
[19] Re Wakim; Ex parte McNally (1999) 198 CLR 511 (Gleeson CJ, Gaudron, Gummow and Hayne JJ).
The ultimate point of difference between the parties in respect of this application is whether or not the proceedings should or can be transferred to the Family Court prior to the making of a determination by that Court that there was a de facto relationship and also that the relationship was of sufficient duration to ground its jurisdiction.
To put the matter another way, the parties disagree as to whether the Family Court’s substantive jurisdiction under s 31(1)(aa) is enlivened by the contention that there is a de facto relationship or whether a positive judicial determination of that jurisdictional fact is required.
The judgment of the Full Family Court in Norton stands for two propositions. First, the Family Court lacks power to grant an injunction under s 114(2A) in cases where the existence of a de facto financial cause has not been established. Secondly, the Family Court has a narrow power to make orders that are necessary for the purpose of determining whether it has jurisdiction. That narrow power extends to the grant of relief so as to preserve the status quo.
I consider that the first proposition in Norton is equally applicable in the present circumstances. The Family Court cannot grant substantive relief in a de facto financial cause under Part VIIIAB of the Family Law Act without having first determined that there was a de facto relationship. That is no different to s 114(2A) (being the provision considered in Norton) which only provides for the issue of an injunction in relation to a de facto financial cause. A contention that a de facto relationship had existed merely enlivens the jurisdiction of the Family Court to enquire into and determine its own jurisdiction. In conducting that enquiry the powers identified in the second proposition in Norton may potentially provide assistance.
The mere contention that a de facto relationship existed does not empower the Family Court to grant relief under Part VIIIAB of the Family Law Act. The Court must first satisfy itself that such a relationship existed. For these reasons, I consider the submissions of the plaintiff concerning the effect of the Full Family Court judgment in Norton to be correct.
There remains a serious disputed question as to whether the plaintiff and defendant were in a de facto relationship within the meaning of the Family Law Act and thus whether the Family Court has substantive jurisdiction.
The circumstances of the present proceedings are materially different from those considered by Nicholas J in Benlair. In that case there was no doubt that the Supreme Court had jurisdiction to determine the dispute between the plaintiff and defendant companies about equitable interests in property. However, Nicholas J was unpersuaded that the accrued jurisdiction of the Family Court extended to the resolution of that dispute and for that reason his Honour declined to transfer the matter to the Family Court .
In the present proceedings, if there is found to be a de facto relationship of the required duration the Family Court will have exclusive jurisdiction to resolve the de facto financial cause. However, if the Family Court finds that there is not a de facto financial cause, then that Court will have no jurisdiction to determine the dispute between the parties.
If I were to allow the application, the contested issue of the existence of a de facto relationship and whether the Family Court has jurisdiction would fall for determination by that Court. However, if the Family Court were then to conclude that it had no jurisdiction, it would be necessary to transfer these proceedings back to this Court.
In that light, the remarks of Nicholas J in Benlair set out at [30] above are apposite to the present matter. It is not in the interests of justice to transfer these proceedings to the Family Court in circumstances where it is presently uncertain whether the Family Court has jurisdiction because of the dispute as to the existence of a de facto relationship. In other words, it is premature to transfer the proceedings to the Family Court.
Conclusion
I dismiss the defendant’s interlocutory application to transfer these proceedings to the Family Court.