Ivey v Ivey
[2004] VSC 190
•2 June 2004
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
No. 4595 of 2004
| PAUL BURALL IVEY | Plaintiff |
| v | |
| BRUCE PAUL IVEY | Defendant |
| MICHELLE NOREEN IVEY | Applicant |
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JUDGE: | Balmford J | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 24 May 2004 | |
DATE OF JUDGMENT: | 2 June 2004 | |
CASE MAY BE CITED AS: | Ivey v Ivey | |
MEDIUM NEUTRAL CITATION: | [2004] VSC 190 | |
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Practice and procedure – application to set aside default judgment – order of possession obtained pursuant to a breach of mortgage – registered proprietor unaware of mortgage – allegation that mortgage a sham transaction further to a marital breakdown.
Application to transfer proceeding to the Family Court – whether appropriate for Family Court to hear the proceeding in addition to the property settlement proceeding – whether Family Court has power to determine the validity of a mortgage in favour of a third party – order made that in the interests of justice the proceeding be transferred to the Family Court.
Jurisdiction of Courts (Cross-Vesting) Act 1987 s 5(1)
Family Law Act 1975 s 106B
Warby v Warby (2002) FLC 93-091
Ascot Investments Pty Ltd v Harper and Harper (1981) FLC 91-000
Heath and Heath; Westpac Banking Corporation (1983) FLC 91-362
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr R Edmunds | Holding Redlich |
| For the Applicant | Mr M Clarke | Slater & Gordon |
HER HONOUR:
This is the return of a summons filed by the applicant (“Mrs Ivey”) on 30 April 2004. Mr Clarke, for Mrs Ivey, indicated that he wished to file an amended summons, and that was not opposed by Mr Edmunds, for the plaintiff. There was no appearance for the defendant. The relief sought in the summons is:
1.that Mrs Ivey be added as a defendant to the proceeding;
2.that the default judgment for recovery of land entered on 24 March 2004 in respect of the property known as 38 Blossom Drive, Mill Park, (“the property”) be set aside;
3.that this proceeding be transferred to the Family Court pursuant to section 5 of the Jurisdiction of Courts (Cross-Vesting) Act 1987;
4.that Mrs Ivey have leave to serve a defence and counterclaim; and
5.that the plaintiff pay Mrs Ivey’s costs.
Mr Edmunds indicated that he did not oppose the making of the first two orders sought, and accordingly there will be orders for the filing of the amended summons and in terms of the first, second and fourth orders sought. The matter in issue between the parties is the application that the proceeding be transferred to the Family Court.
The plaintiff is the father of the defendant and Mrs Ivey is the wife of the defendant. They were married in 1992 and lived on the property throughout the marriage. At the time of the marriage the defendant was the sole registered proprietor of the property. Shortly after the marriage Mrs Ivey signed a transfer from the defendant to herself of a one-half interest in the property as a tenant in common. In December 2003 the couple separated. Mrs Ivey has continued to live on the property.
The transfer was registered in September 2002. On the same day, but ahead of the transfer, there was registered a mortgage over the property from the defendant to the plaintiff. The mortgage is expressed to secure the repayment of a principal sum of $200,000 lent by the plaintiff to the defendant. The plaintiff issued this proceeding for the recovery of land on 18 February 2004 and the default judgment referred to in [1] above was obtained on 24 March 2004. Mrs Ivey deposes that she had not consented to the registration of the mortgage and that she was unaware of the existence of the mortgage or of this proceeding until she received a letter from the solicitors for the plaintiff notifying her of the judgment, which read in part:
Our client now has a legal right to possession of the property, but wishes to give you a reasonable amount of notice for you to vacate the property, namely one month, until Friday 7 May 2004. We expect that the property will be left in a reasonable condition.
If you have not vacated the property by this time, a warrant will be executed for the possession of the property.
In May 2004 Mrs Ivey issued proceedings in the Family Court seeking interim orders for spousal maintenance and for sole use and occupation of the matrimonial property and final orders for a property settlement. On 21 May 2004 the application for interim orders was amended to seek (in summary) orders that the mortgage be set aside as a sham. Mrs Ivey also seeks interim orders that the plaintiff be restrained from acting upon or dealing with the mortgage.
Mr Clarke submitted that in the context of the Family Court proceeding it was necessary to have the mortgage set aside as a prerequisite to the making of the property settlement.
Section 5(1) of the Jurisdiction of Courts (Cross-Vesting) Act 1987 reads as follows, so far as relevant:
5.Transfer of proceedings
(1)Where¾
(a)a proceeding (in this sub-section referred to as the “relevant proceeding”) is pending in the Supreme Court; and
(b)it appears to the Supreme Court that¾
(ii)having regard to¾
(A). . .
(B). . .
(C)the interests of justice¾
it is more appropriate that the relevant proceeding be determined by the Federal Court or the Family Court, as the case may be¾
the Supreme Court shall transfer the relevant proceeding to the Federal Court or the Family Court, as the case may be.
Section 106B of the Family Law Act 1975 reads, so far as relevant:
106BTransactions to defeat claims
(1)In proceedings under this Act, the [Family Court] may set aside or restrain the making of an instrument or disposition by or on behalf of, or by direction or in the interest of, a party, which is made or proposed to be made to defeat an existing or anticipated order in those proceedings or which, irrespective of intention, is likely to defeat any such order.
.. .
(3)The court must have regard to the interests of, and shall make any order proper for the protection of, a bona fide purchaser or other person interested.
Section 80(1)(d) of that Act empowers the Family Court inter alia to:
order that any necessary deed or instrument be executed and that such documents of title be produced or such other things be done as are necessary to enable an order to be carried out effectively or to provide security for the due performance of an order;
Mr Clarke referred to the conclusion of the Full Court of the Family Court in Warby v Warby[1] where the Court said:
We have formed the view that as a matter of law, the Family Court of Australia is not restricted to the determination of a family law claim or proceeding; it may exercise accrued jurisdiction to determine the non-federal aspects of a justiciable controversy of which the family law claim or cause of action forms a part. The factual circumstances of the case will determine whether the jurisdiction arises and whether it is appropriate to exercise the jurisdiction.
[1](2002) FLC 93-091 at [79]
He also relied on the passage from the judgment of Gibbs J (with whom Stephen, Aickin and Wilson JJ agreed) in Ascot Investments Pty Ltd v Harper and Harper[2] , where His Honour said, after finding that the Family Court did not have power to make an order having the effect of depriving a third party of an existing right:
The position is, I think, different if the alleged rights, powers or privileges of the third party are only a sham and have been brought into being, in appearance rather than reality, as a device to assist one party to evade his or her obligations under the Act. Sham transactions may always be disregarded. . . .
Except in the case of shams, and companies that are mere puppets of a party to the marriage, the Family Court must take the property of a party to the marriage as it finds it.
[2](1981) FLC 91-000 at 76,061-2
Mr Clarke submitted that it would be in the interests of justice for both proceedings to be dealt with together, rather than having separate concurrent actions, with additional activity and expense, and the possible risk of inconsistent findings being made in the two courts. He submitted further, and I accept, that by virtue of the statutory provisions and authorities cited above, the Family Court had jurisdiction to deal with the present proceeding. He drew attention to occasions when the Family Court had set aside a mortgage which it had found to be a sham. [3] Given that the Family Court had jurisdiction to deal with the matter of the mortgage, and given that this Court did not have power to deal with the claims in the Family Court proceeding, he submitted that it was appropriate to transfer this proceeding to the Family Court, where all the issues could be dealt with at the one time.
[3]E.g. Heath and Heath; Westpac Banking Corporation (1983) FLC 91-362
The alternative, he submitted, would be to stay the Family Court proceeding until this proceeding was heard and determined. However, that would inevitably delay the Family Court proceeding.
Mr Edmunds submitted that the matter of the validity of the mortgage was a discrete issue which should be dealt with in this Court, rather than as one of a number of applications in the Family Court.
His principal submission p 3 was that his client was in his seventies and did not wish to become embroiled in a Family Court dispute between his son and his daughter-in-law involving a multitude of issues and uncertainty as to the final hearing date.
However, whether by making a genuine loan to his son, or by entering into a sham transaction (an issue which it is not for me to determine) the plaintiff has become embroiled in the affairs of his son and daughter-in-law. His embroilment in the proceedings, whether in this Court or in the Family Court, will relate only to that issue.
Mr Edmunds referred to the affidavit of Mr Broderick, solicitor for the plaintiff, who had ascertained from officers of the two courts that it was likely that the matter would be listed earlier in this Court than in the Family Court. However, it seems to me that little would be gained by dealing with the issue as to the mortgage in advance of the Family Court proceedings, given the matters raised in the claims of Mrs Ivey.
For the reasons submitted by Mr Clarke, I find that it would be in the interests of justice to order that this proceeding be transferred to the Family Court pursuant to section 5 of the Jurisdiction of Courts (Cross-Vesting) Act 1987.
Submissions were made as to the fifth order sought in the amended summons, namely that the plaintiff pay Mrs Ivey’s costs. Having considered those submissions, I am satisfied that it is appropriate that the costs of this proceeding be costs in the cause.
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