Jin v Ai
[2011] ACTSC 70
•6 May 2011
YI QING JIN v YANG AI
[2011] ACTSC 70 (6 May 2011)
APPEAL AND NEW TRIAL – appeal from the Master – principles.
FAMILY LAW AND CHILD WELFARE – de facto relationships – legislation – Domestic Relationships Act 1994 (ACT), s 19 – superannuation – available as a resource.
FAMILY LAW AND CHILD WELFARE – de facto relationships – Legislation – Domestic Relationships Act 1994 (ACT), s 19 – after – acquired property – whether available for consideration in orders to be made.
PROCEDURE – miscellaneous procedural matters – transfer of proceedings – transfer from Magistrates Court to Supreme Court - principles
Family Law Act 1975 (Cth), ss 79, 90MC
Jurisdiction of Courts (Cross-Vesting) Act 1987 (Cth), s 5
Domestic Relationships Act 1994 (ACT), ss 15, 19,
Magistrates Court Act 1930 (ACT), s 270
Court Procedures Rules 2006 (ACT), r 1432
Jurisdiction of Courts (Cross Vesting) Act 1993 (ACT), s 5
Supreme Court Act 1933 (ACT), s 9
Taylor P (General Editor), Ritchie’s Uniform Civil Procedure NSW (LexisNexis Butterworths: Sydney, 2005), looseleaf, at p 2885; [s 140.20]
Carrv Finance Corporation of Australia Ltd (No 1) (1981) 147 CLR 246
Licul v Corney (1976) 180 CLR 213
Hall v Nominal Defendant (1966) 117 CLR 423
Theodorelos v Nexus Projects Pty Ltd [2009] ACTSC 149
Re Milosevic (1996) 134 FLR 429
Do Carmo v Ford Excavations Pty Ltd [1981] 1 NSWLR 409
Warren v Coombes (1979) 142 CLR 531
House v The King (1936) 55 CLR 499
Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175
Ex parte O’Flynn; Re George Pearse Pty Ltd (1961) 78 WN(NSW) 1121
George Pearse Pty ltd v O’flynn [1962] SR(NSW) 400
In the Marriage of Harrison (1996) 129 FLR 74
Ferris v Winslade (1998) 22 Fam LR 725
Prymas v Whittaker [2006] ACTSC 48
Aldridge v Mazzotti [2009] Fam CA 1048
Mallet v Mallet (1984) 156 CLR 605
Crellin v Robertson (2004) 186 FLR 87
DW v GT (2005) 191 FLR 305
Kardos v Sarbutt (2006) 34 Fam LR 550
Hamilton v Australian Capital Territory and Anor [2011] ACTSC 45
Giusti Patents and Engineering Works Ltd v Maggs [1923] 1 Ch 515
Sowton v Cutler and Anor (1675-6) 2 Chan Rep 108 21 E 630
Banks v Hollingsworth and Anor [1893] 1 QB 442
Ronald v Harper [1908] VLR 674
Ex parte Delponte; Re Thiess Bros Pty Ltd [1965] NSWR 1468
Sanderson Motors Pty Ltd v Kirby [2000] NSWSC 924
Nationwide News Pty Ltd v Vasiljkovic [2009] NSWSC 1227
Kalis v Waltham [2010] ACTSC 94
No. SC 388 of 2010
Judge: Refshauge J
Supreme Court of the ACT
Date: 6 May 2011
IN THE SUPREME COURT OF THE )
) No. SC 388 of 2010
AUSTRALIAN CAPITAL TERRITORY )
YI QING JIN
Plaintiff
v
YANG AI
Defendant
ORDER
Judge: Refshauge J
Date: 6 May 2011
Place: Canberra
THE COURT ORDERS THAT:
The costs order of the Master made on 18 June 2010, namely that the costs of the application to transfer the proceedings number AP07/008 from the Magistrates Court to the Supreme Court be reserved, be set aside and in lieu each party bear their own costs of the application before the Master.
Otherwise, the appeal be dismissed.
There be no order of the costs of the appeal.
Dr Yang Ai and Ms Yi Qing Jin were in a de facto relationship which is said to have lasted from early June 2001 to 5 April 2005.
On 4 April 2007, Ms Yi commenced proceedings in the Canberra Magistrates Court under the Domestic Relationships Act 1994 (ACT) claiming the sum of $50,000 and an order that Dr Ai be declared sole beneficial owner of certain property. These proceedings were ultimately listed for hearing on 27 May 2010.
On that day, application was successfully made for an adjournment so that this court could be approached for an order transferring the proceedings to this court under s 270 of the Magistrates Court Act 1930 (ACT). See also r 1432, Court Procedures Rules 2006 (ACT). In the application that was filed by Ms Yi, she also applied under s 5 of the Jurisdiction of Courts (Cross Vesting) Act 1993 (ACT) for an order cross-vesting the proceedings to the Family Court of Australia. An amendment was also sought to the Originating Application.
This application was heard by Master Harper on 18 June 2010 and his Honour, being satisfied that it was appropriate to remove the proceedings into the Supreme Court and of the other orders, made the following orders:
1.That the proceedings under the Domestic Relationships Act 1994 (the DRA) between the Plaintiff and the Defendant currently before the Magistrates Court of the ACT, being proceedings number AP 07/008 be removed to the Supreme Court pursuant to section 270 of the Magistrates Court Act 1930.
2.That upon those proceedings being so removed to the Supreme Court that –
(a)the plaintiff be given leave to amend her Originating Application by deleting the order sought in paragraph 1 thereof and inserting in its stead the following paragraph:-
1that the Defendant pay to the Plaintiff the sum of $160,000 within 60 days, and
(b)the Supreme Court then transfer the proceedings to the Family Court of Australia Canberra Registry, pursuant to sec 5 of the Jurisdiction of Courts (Cross-Vesting) Act 1993 of the ACT.
(3)That the costs of this application be reserved to the court hearing the proceedings.
At the hearing before the Master, the title of the proceedings was amended and the order of the names of each party were varied, so that the plaintiff became “Yi Qing Jin” and the defendant “Yang Ai”. I also discussed with Dr Ai how I should address the parties. As a result, I referred to the plaintiff as Ms Yi and the defendant as Dr Ai. As is apparent later in these reasons, the plaintiff was, in the Magistrates Court, referred to as “Ms Jin”.
Being dissatisfied with the orders made by the Master, Dr Ai has appealed against them. Under s 9(2)(a) of the Supreme Court Act 1933 (ACT), an appeal against an interlocutory order of the Master is to be heard by the Supreme Court constituted by a single judge. Whether that is now appropriate given the wide jurisdiction of the Master and the current structure of the courts in this Territory is a matter that should be given careful consideration.
There is no doubt that the order made by the Master is an interlocutory order: Carrv Finance Corporation of Australia Ltd (No 1) (1981) 147 CLR 246 (at 253-4); Licul v Corney (1976) 180 CLR 213 (225); Hall v Nominal Defendant (1966) 117 CLR 423 (at 439-40).
The appeal was heard by me on 15 November 2010 and, at the end of the hearing, I gave the parties leave to file further affidavit material, which they both did, and to advise the court if they wished the matter to be relisted as a consequence. No such advice was received.
The appeal
I addressed the issue of appeals from the Master in Theodorelos v Nexus Projects Pty Ltd [2009] ACTSC 149 (at [65]) to [87]). I formed the view that Hogan AJ was correct in Re Milosevic (1996) 134 FLR 429 when his Honour held that the approach to such appeals that had been adopted by Cross J in Do Carmo v Ford Excavations Pty Ltd [1981] 1 NSWLR 409 was applicable to such appeals. These principles were that:
(a) the appeal is one on fact as well as on law;
(b) the court on appeal may apply the law as it exists at the date of the appeal;
(c) where additional evidence is adduced, the appellate court may decide the appeal in the light of that evidence along with the evidence before the Master;
(d) if no additional evidence is adduced to warrant a departure from the Master’s findings of fact, those findings are binding on the appeal court, unless they, or the inferences from them are so flawed as to attract intervention in accordance with the principles as enunciated in Warren v Coombes (1979) 142 CLR 531;
(e) where the Master’s decision arises from the exercise of a discretion, the principles enunciated in House v The King (1936) 55 CLR 499 apply.
These are the principles I will adopt and use in the determination of this appeal.
In the appeal, Dr Ai sought the following orders:
(i) that the orders of Master Harper made on 18 June 2010 be set aside;
(ii) in lieu thereof, the proceedings be transferred back to the Magistrates Court;
(iii) that the parties bear their own costs of the Supreme Court proceedings.
Dr Ai represented himself; Ms Yi was represented by counsel, Mr G Brzostowski SC.
It seems to me that the orders that Dr Ai really wants in (i) and (ii) above (at [11]) are, in fact, merely an order that the application before the Master simply be dismissed. That will have the consequence that the proceedings will remain in the Magistrates Court and not be transferred either to the Supreme Court or to the Family Court of Australia and the Originating Application will claim only the original amount of $50,000.
The contentions of the parties and consideration of them
Dr Ai first raised a number of what he described as “factual errors” in the transcript of the proceedings before the Master. Three of them appeared to be a result of a “slip of the tongue” (reference to the defendant instead of the plaintiff, for example). One was a finding inconsistent with the evidence but of a minor and inconsequential nature (about the contents of the Originating Application) and one related to events that occurred after the hearing before the Master and which will be referred to below. I do not need to consider the others any further.
Dr Ai really made three challenges to the orders made by the Master. These were that:
(a) the claims by Ms Yi, if properly understood, would not exceed the monetary jurisdictional limit of the Magistrates Court;
(b) the principles of case management, set out in Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175, (Aon), would have required Ms Yi’s application to be dismissed; and
(c) Ms Yi had forfeited the right to the transfer because she had made a deliberate decision, over warnings given by the Registrar of the Magistrates Court, not to seek a transfer of the proceedings to this court.
Ms Yi’s counsel, Mr G Brzostowski SC, rejected each of these contentions as a matter of fact or law.
In relation to (c), I had no evidence of what Dr Ai was alleging, so I gave him leave to file a further affidavit annexing any relevant transcript and gave Ms Yi an opportunity to file an affidavit in reply. They did so as I deal with below. No relisting was sought for further oral argument by either party.
I shall deal with each of the claims of Dr Ai seriatim.
Monetary jurisdictional limit(a)
At the hearing before the Master, Mr Brzostowski SC handed up four documents described as Aides Memoire which set out an analysis of the comparative contributions, holdings and present day values of assets of Dr Ai and Ms Yi at various dates. They had, it appears, been before the Master.
The tables showed that on the basis of a share of between 30% and 35% of the notional pool, to which Ms Yi may be entitled, she would receive somewhere between $138,000 and $168,000. Hence, she sought to amend the claim to one seeking $160,000 rather than the $50,000 originally claimed and which was the monetary jurisdictional limit of the Magistrates Court. This is, of course, one of the bases on which a transfer from a lower to a higher court can be made in the exercise of the court’s discretion: Ex parte O’Flynn; Re George Pearse Pty Ltd (1961) 78 WN(NSW) 1121 (at 1122) (affirmed on appeal in George Pearse Pty Ltd v O’Flynn [1962] SR(NSW) 400).
Dr Ai submitted that there were significant flaws in the Aides Memoire such that property was improperly included in the notional pool so as to inflate the outcome that Ms Yi might reasonably be able to expect. He referred to two particular matters.
(i)Superannuation . The Aides Memoire showed that Dr Ai had $200,000 in superannuation, while Ms Yi had $5,574. Dr Ai submitted that his superannuation fund was not available as an asset to be included in the notional pool under s 19(2) of the Domestic Relationships Act. In support of this position, Dr Ai referred to a number of decisions, including, In the Marriage of Harrison (1996) 129 FLR 74; Ferris v Winslade (1998) 22 Fam LR 725; Prymas v Whittaker [2006] ACTSC 48; and Aldridge v Mazzotti [2009] Fam CA 1048.
The Full Court of the Family Court of Australia addressed the issue of superannuation in In the Marriage of Harrison (at 76) in the following way:
It must first be said that in most cases a spouse’s entitlement to superannuation is not property and therefore is not capable of any order under the provisions of s 79: see In Marriage of Crapp (No 2) (1978) 35 FLR 153, In Marriage of Coulter (1990) 96 FLR 375 and In Marriage of Mitchell (1995) 120 FLR 292. The various attempts which trial judges, in their ingenuity, have made to take superannuation entitlements into account by reference to precise mathematical calculations, although perhaps desirable from a practical point of view, nevertheless do not enable or entitle them to include such sums as part of the property of the parties, however calculated.
It follows from what we have said that in most cases the proper approach to be taken by trial judges, when dealing with a party’s entitlement to superannuation in proceedings for alteration of property interests pursuant to the provisions of s 79 of the Family Law Act, is to adjourn the proceedings under s 79(5) with or without the making of any order under s 79(6) or, in the alternative, to treat the superannuation entitlement as a resource, pursuant to the provisions of s 75(2)(f) or s 75(2(j).
Section 75(2)(f) provides that the Court shall take into account the eligibility of either of the parties for a pension, any superannuation fund or scheme whether the fund or scheme was established or operates within or outside Australia. Section 75(2) requires the Court to take into account the extent to which a party whose maintenance is under consideration has contributed to the income earning capacity, property and financial resources of the other party.
Subsequently, s 90MC was introduced into the Family Law Act 1975 (Cth), which provided:
(1) A superannuation interest is to be treated as property for the purposes of paragraph (ca) of the definition of matrimonial causes in section 4.
In Prymas v Whittaker, Gray J had to consider the implications of this provision on the Domestic Relationships Act and applications under it. His Honour said (at [37]):
There is nothing in the Domestic Relationships Act to equate with this approach. It is said that it is within my discretion to adopt an approach in this case to treat superannuation as property and that it would be just and equitable to do so. I do not consider that I should do so. The Family Law Act does not deem superannuation interests to be property, rather it merely defines such interests as falling within the jurisdiction of that Act. I am not prepared to treat superannuation as property for the purposes of the Domestic Relationships Act. The nature of the contingency and the circumstances upon which it becomes due, as well as the question of its valuation, make it particularly difficult to treat it as property in the context of the Domestic Relationships Act dealing as it does with alterations and adjustments to such interests. However, at least insofar as I can regard it as a financial resource of the particular party, I am prepared to take their position on superannuation into account as a relevant matter when making property orders pursuant to the Domestic Relationships Act as part of the exercise of my general discretionary power.
In Aldridge v Mazzotti, Faulks DCJ, had to consider, in the Family Court of Australia, proceedings under the Domestic Relationships Act which had been transferred to that court under s 5(1) of the Jurisdiction of Courts (Cross-Vesting) Act 1987 (Cth) and s 5(1) of the Jurisdiction of Courts (Cross-Vesting) Act 1993 (ACT). His Honour proceeded (at [70]) on the basis that superannuation “should be treated as a resource rather than as an asset.” His Honour (at [80]) cited the above passage from Prymas v Whittaker, but noted that the approach was still discretionary, although his Honour did choose to treat superannuation as a resource.
Thus, Dr Ai said, the Aides Memoire gave a false impression for they appeared to treat the superannuation as an asset and not merely as a resource. This inflated the notional pool and thus was an improper basis on which to determine whether it was possible Ms Yi would obtain more than the Magistrates Court monetary jurisdictional limit in her claim.
Mr Brzostowski SC did not directly address this issue.
Consideration
Whilst the thrust of Dr Ai’s submission is correct, namely that the Aides Memoire appeared incorrectly to treat the superannuation as property of Dr Ai and, therefore, directly distributable, the proper method of taking it into account does not render it or its value as irrelevant. To use it as a resource, which is, it appears, the proper approach, means that it has to be taken into account in both the adjustment of property rights under s 15 of the Domestic Relationships Act and any maintenance order under s 19 of that Act. Both require, inter alia, “the income, property and financial resources of each party” to be taken into account: s 19(2).
Here, the amount of Dr Ai’s superannuation fund, especially compared to that of Ms Yi, mean that, to use the words of Faulks DCJ in Aldridge v Whittaker (at [81]):
[i]t is a matter which would therefore be significant because of its size in my consideration of factors under s 19(2) of the Domestic Relationships Act 1994 (ACT).
The difficulty with the use of a superannuation fund as a resource is that the effect cannot easily be quantified until the court finally addresses the apportionment and adjustment or the orders to be made. See, for example, the way in which Gray J made use of the resource in Prymas v Whittaker (at [62] to [67]).
It seems to me that while the more direct adjustment of superannuation balances as between the parties, which appeared to be the basis of the calculations in the Aides Memoire, is almost certainly not applicable under the Domestic Relationships Act, the claim by Ms Yi will be affected by the court, applying the necessary criteria, especially that set out in s 19(2) of the Act, and may well make an adjustment that could increase the payment to her above the monetary jurisdictional limit limiting the Magistrates Court. I certainly cannot say it will not.
(ii)After acquired property . Dr Ai was also very concerned that the Aides Memoire took into account the value of a property he had purchased in Brisbane about a year after the relationship ended. He referred me to what Crispin J said in Crellin v Robertson (2004) 186 FLR 87 (at 95; [37]), namely:
However, as Higgins J said in Pigott v Walker it would not usually be just or equitable to distribute from one party to another an asset or funds to which the other party did not, even indirectly, contribute and which were acquired after the relationship had ceased.
It is to be noted that this was said in the context of superannuation which has been dealt with above.
Nevertheless, the principle seems to have some validity. As Cooper J said in Ferris v Winslade (at 732; [29]):
The ACT legislature has not sought to equate a de facto marriage to a legal marriage. Nor has it, in relation to adjustment of property rights between parties to a domestic relationship, replicated, exactly, the Family Law Act for the adjustment of property rights.
His Honour did, however, note a similarity in the nature of the discretion to be exercised under both legislation and considered that decisions of the Family Court of Australia were an appropriate guide to the exercise of the discretion under s 15 of the Domestic Relationships Act.
In this context, Dr Ai asserted that the Brisbane property, his after-acquired property, should not be included in the notional pool. The asset and its appreciated value was not property that formed part of the assets owned by Dr Ai at the time of the end of the relationship with Ms Yi.
Dr Ai also complained about the inclusion in the Aides Memoire of the current value of his present home, five years after the end of the relationship, for the purpose of calculating Ms Yi’s entitlement.
Mr Brzostowski SC submitted that the inclusion of the Brisbane property was justified because it had been purchased with the proceeds of the sale of shares that had been built up during the relationship.
He added that the inclusion of such property also could be justified by the indirect contribution made by Ms Yi.
His primary submission, however, was that Ms Yi had made a major contribution as primary parent and that her role as parent to the child born to the relationship has to be recognised in a substantial and not merely token way. See, for example, Mallet v Mallet (1984) 156 CLR 605 (at 636) per Wilson J. This contribution, of course, continued after the separation.
Mr Brzostowski SC also submitted that where values of assets had risen after separation, the court normally, and he stressed “normally”, takes account of the value of the asset at the date of trial. He referred to DW v GT (2005) 191 FLR 305. There, the parties made an informal agreement as to the division of property but one of the parties later applied for an alteration of property interests under s 79 of the Family Law Act. The court there held that the application was to be determined on its merits in accordance with the factors set out in s 79(4) (relating principally to contributions made by the parties) but at the date of trial not the date of the earlier agreement. Thus, the court said (at [39] to [42]):
39In determining s 79 applications in circumstances where there has been an earlier agreement, it will often be necessary to consider what was the value of the parties’ assets at the time of the agreement, what their various contributions were to that time, and what might have been an appropriate s 75(2) adjustment. A consideration of these matters might well be necessary in order to provide a background to the parties’ understanding of what was a just and equitable settlement at the time. However, and perhaps more significantly, it would generally be necessary for the Court to acquaint itself with changes in the composition and value of the property pool, so that post-separation contributions can be assessed.
40.In the present case therefore it may well have been necessary for the trial judge to consider these various matters existing at the time of the agreement. However it was also necessary for him to go further and to consider the composition and value of the assets and the various matters referred to in s 79(4) as they existed at the date of the hearing. The fact that he did not undertake this further exercise must lead to the conclusion that there is substance in ground 1(b).
Appeal ground 1(c): property pool assessment and contributions.
41.Pursuant to appeal ground 1(c), the wife asserts that the trial judge erred in that his Honour failed to have regard to the identity of the property as it existed at the time of trial and the value of the property and failed then to consider the contributions of each of the parties to that property.
42.Following our conclusions in regard to appeal ground 1(b), we are of the view that this assertion also has substance.
Consideration
While the apparent approach in Crellin v Robertson seemed to me at the hearing to be intuitively persuasive, it now seems to me that this was an untutored response. In Crellin v Robertson, the later contributions to superannuation were of a particular kind, namely accumulated by personal exertion. While there may still be a need for an offset of these against the other party’s ongoing parenting or other contribution, there was, nevertheless, an argument for excluding such after acquired accumulation from the notional pool, where it was accumulated entirely by the personal exertion of the party.
I note, however, what was said in the New South Wales Court of Appeal in the context of a domestic relationship claim in Kardos v Sarbutt (2006) 34 Fam LR 550 by Brereton J with whom Basten JA and Hunt AJA agreed). His Honour said (at 558- 9; [30] to [31]):
30.... the exercise of the identification and valuation of the property of the parties is undertaken typically, though not invariably, as at the date of trial [see Parker v Parker (1993) 16 Fam LR 863; (1993) DFC 95-139; Wells v Wells (1977) 29 FLR 383; (1977) 4 Fam LR 57; (1977) FLC 90-285], though sometimes as at the date of separation [Cozanitis v Cozanitis (1979) 34 FLR 523n; (1978) 4 Fam LR 709; (1979) FLC 90-643]. The starting point is that ordinarily property is valued as at the date of trial [Williams & Williams (1984) 9 Fam LR 798; (1984) FLC 91-541; Hauff v Hauff (1986) 10 Fam LR 1076; (1986) FLC 91-747]. The primary reason for this is that the jurisdiction under s 20 is to adjust interests with respect to ‘the property of the parties to the relationship or either of them’ and speaks from the date at which the jurisdiction is exercised, so that what is in issue is the property of the parties and each of them at the date of trial. Establishing the divisible pool at any other date may lead to failure to have regard to relevant assets available for division, or to the bringing into account of property no longer available. Thus in Woodland & Todd (2005) 33 Fam LR 177; (2005) FLC 93-217; [2005] FamCA 161, in which the property of the parties – which had been worth $873,000 when the husband and wife divided it between them in 1997 under an informal agreement which did not deprive the court of jurisdiction – had increased in value to $2.5 million when the matter came to trial years later, the Full Court of the Family Court held that the primary judge had erred in treating the case as concerning an asset pool as at the date of the informal agreement in 1997, and was required to address an asset pool that existed at the time of the hearing, not at the time of the prior agreement.
31.Although usually the preferable approach is to value property as at the date of trial, giving where appropriate separate and special consideration to contributions to value made between separation and trial, nonetheless the ultimate task of evaluating the respective contributions of the parties may sometimes be facilitated by adopting the date of separation for identifying and valuing the property, particularly when there have not been ongoing contributions by one party which have benefited the other since separation. Thus the Full court of the Family Court has said (in respect of proceedings under Family Law Act, s 79, which for present purposes are akin to proceedings under Property (Relationships) Act, s 20) that although ordinarily the parties’ property is to be valued at the date of trial, in a particular case there may be reasons to justify another date, which might be the date of separation [Omacini & Omacini (2005) 33 Fam LR 134; (2005) FLC 93-218; [2005] FamCA 195].
In my view, it cannot be said at this stage, though that, of course, does not bind the trial judge ultimately, that the Brisbane property and the current value of the Braddon property is irrelevant to the ultimate determination of the claim by Ms Yi.
Accordingly, I cannot say that Ms Yi cannot reasonably claim that she may well secure a verdict in her favour for an amount that exceeds the monetary jurisdictional limit of the Magistrates Court at $50,000. On the material before me, that is a reasonable argument.
Principles of Case Management(b)
Dr Ai referred me to several passages in Aon where the court made points such as the following:
· applications for adjournments and amendment cannot be considered solely in the context that any prejudice can be adequately compensated for in costs (at 182; [5]);
· there is an irreparable element of unfair prejudice in unnecessarily delaying proceedings (at 182; [5]);
· there is a public interest in the efficient use of court resources (at 191; [27]);
· consideration needs to be given to whether a party is misusing or abusing the court processes (at 194; [34]);
· the courts must now balance the advantage to a party of an adjournment or amendment as against the strain litigation imposes on litigants with non-compensable inconvenience and stress (at 214; [100]);
· the need to permit an amendment (or, presumably, an adjournment) must be weighed also against the delay and costs associated with it and the prejudice reasonably assumed to flow from it (at 215; [102]);
· limits must be placed on the ability of parties to effect changes to their litigation choices (at 217; [112]); and
· the courts cannot leave only to the parties the preparation for trial for the resolution of disputes serve the public as a whole (at 217; [113]).
Dr Ai drew from these points that the delay in transferring the case from the Magistrates Court to the Supreme Court and then to the Family Court of Australia, especially after a hearing date had been set in the Magistrates Court, was unreasonable and had resulted in irreparable, unfair prejudice to him.
Mr Brzostowski SC indicated that he could not explain why the decision to seek a transfer was not made until the morning of the hearing in the Magistrates Court.
There is, however, some explanation in the affidavit of Ms Yi sworn on 17 December 2010. In it, she says that:
· she had tried unsuccessfully to reach a settlement with Dr Ai from the date of separation to shortly before the time limit to bring these proceedings expired;
· she sought free legal advice as she could not afford to engage a lawyer on a commercial basis;
· she felt “overpowered” by Dr Ai’s skills as a lawyer (he has a law degree) and his greater fluency in English;
· she did not appreciate that the court could take into account all of her financial and non-financial contributions as a home-maker and a parent until she spoke to counsel shortly before the hearing;
· she did not appreciate that the court could consider post-separation contributions until she had spoken to counsel shortly before the hearing.
She also detailed a number of occasions when Dr Ai had failed to comply with orders of the court, such as to produce documents, especially financial documents, applications which did not proceed and steps (including answering and administering interrogatories) not taken.
Consideration
The difficulty with this submission by Dr Ai is that the real delay and inconvenience had already occurred by the time the Master considered the application for a transfer. It really happened when the Magistrates Court hearing date on 27 May 2010 was vacated and the stay of those proceedings was imposed pending the application to transfer the proceedings to the Supreme Court (and then to the Family Court of Australia).
The points he makes were very relevant to those decisions, but those decisions had been made by the time the application for transfer came before the Master. It was then too late to complain. As I said of a somewhat similar situation in Hamilton v Australian Capital Territory and Anor [2011] ACTSC 45 (at [99]):
So far as past prejudice is concerned, it should not be ignored but it is to a large extent of little importance in this case ... I note that the decision to adjourn the trial has already been made; I should not controvert the decision then made by Gray J nor revisit it.
In the absence of an appeal against the decision to adjourn the hearing in the Magistrates Court (and I appreciate that, in the circumstances, such an appeal would have questionable utility) there is nothing that can now be done about that and the prejudice that flows from it. Of course, the courts should endeavour to ameliorate any past prejudice by, for example, expediting future consideration of a delayed claim.
It would, however, be a perversion of the justice of the case to refuse a transfer as a sanction or penalty for the prejudice suffered by the delay occasioned by the adjournment granted by the Magistrates Court, especially where there was no appeal from that decision. Aon does not stand for that approach. In the context, it was quite a different situation, though the principles are still valid and to be applied.
There is nothing in this argument to support setting aside the Master’s decision.
Ms Yi had deliberately chosen the forum of the Magistrates Court(c)
Dr Ai described the decision of Ms Yi to commence proceedings in the Magistrates Court as “deliberate and calculated”. It was calculated because it was clearly based on her calculation of to what she thought she was entitled.
This was, in fact, emphasised in Ms Yi’s affidavit of 17 December 2010, where she deposed:
As I had no idea that my non-financial contributions could be taken into account in relation to all of our property, and certainly no idea that my post-separation contributions could also be taken into account, I concentrated on basic arithmetic. The information about the property at the time was also outdated. It had a mortgage of $333,000 in 2005 and capital gain $65,000 in 2006. My simplistic solution was to claim half of the capital gain in 2006 of $32,500 plus $15,250 that I gave to [sic] Appellant for the purpose of purchasing the property.
I have referred (at [50]) to her misunderstanding of her possible entitlements under the Domestic Relationships Act.
Dr Ai also referred to her awareness of the monetary jurisdictional limit of the Magistrates Court; Ms Yi frankly acknowledges this in her most recent affidavit.
Dr Ai referred to Ms Yi seeking legal advice from time to time. Again Ms Yi acknowledged this but the precise context of this needs to be considered. She says that she did not consider that she could afford to engage her own lawyer. She says that the advice came from the Law Society’s “Duty Lawyer” Scheme. She only decided she needed a lawyer to represent her late in the day and only saw Senior Counsel for the first time in May 2010.
She also pointed out that she did not have relevant information especially about Dr Ai’s financial circumstances, in part because of the delay by and reluctance of Dr Ai to provide it, despite court orders.
There was no request to cross-examine Ms Yi on her affidavit. Much of it, particularly her chronology of the court attendances in the Magistrates Court, are consistent with that set out in Dr Ai’s affidavit. I am, therefore, prepared to accept the material in it, as I am the material in Dr Ai’s affidavit.
Dr Ai particularly challenged the finding of Master Harper where his Honour found:
On balance it seems to me that the plaintiff more likely than not did not deliberately limit her claim in 2007 to $50,000 knowingly waiving her entitlement to any greater amount, rather I think it is more likely that the plaintiff was unaware that she might have been entitled to any greater amount than $50,000 and of course I do not prejudge the matter. It may be that she will be found entitled to that amount or something less or to nothing, but that will be a matter [sic] for the court which hears and determines the proceedings eventually.
I appreciate what Dr Ai says about this passage. At one level, his criticism is just. It is clear, even on Ms Yi’s affidavit evidence, that she did deliberately limit her claim to $50,000. She says as much.
Consideration
The problem for Dr Ai’s argument, however, is that Ms Yi did not limit her claim to the $50,000 monetary jurisdictional limit of the Magistrates Court in full knowledge of all the facts. That is to say, while she limited her claim, there is no evidence that she, knowing that the claim might well be worth much more than the $50,000, chose the Magistrates Court, deliberately waiving the excess. That is quite a different matter.
In Giusti Patents and Engineering Works Ltd v Maggs [1923] 1 Ch 515, Astbury J referred to Sowton v Cutler and Anor (1675-6) 2 Chan Rep 108 21 ER 630 and said (at 519) of that case:
That is a direct decision, and indeed the only decision dealing with this point. It decides that where a plaintiff voluntarily sues in a Court that has no jurisdiction, he cannot cure his mistake and remove the proceedings by certiorari. By that I am clearly bound.
In my view, “voluntarily” as used by Astbury J above must mean “in full knowledge of the relevant information”. After all, it is difficult to understand otherwise how legal proceedings could be commenced involuntarily.
Dr Ai, however, submitted that the Registrar, before whom the parties appeared no less than twenty times (not to mention five appearances before a Magistrate as well), had expressly mentioned the monetary jurisdictional limit. He said to me:
... the issue of jurisdiction has been raised numerous times in the Magistrates Court. In fact, it was the subject of decision of the Registrar of the court. During that process, the Registrar himself indicated a number of times to both of us that if either party wished to bring the – to move the case to the Supreme Court, they can do that at their liberty, and yet throughout the nearly three years on and off the court, there was no such a move.
It was in this context that I gave leave for the further affidavits to be filed to set out the relevant passages of transcript that showed what had been said. Dr Ai, in his affidavit of 29 November 2010, deposed:
(... Merrill Legal Solutions Canberra Office advised that all proceedings before Registrar Jorgensen had not been recorded and that they were unable to provide either the session recordings or any transcripts of these proceedings).
In these circumstances, it is difficult to make a finding about whether the comments made by the Registrar were such as to give Ms Yi sufficient warning to justify a holding that she deliberately waived her right to apply for a transfer.
Dr Ai did, however, annex copies of transcripts of proceedings before various Magistrates. He set out in his affidavit the following passage from a hearing before Magistrate Dingwall on 16 August 2007:
HIS HONOUR: What do you assert, Ms Jin, that you’re entitled to?
MS JIN: Sorry?
HIS HONOUR: What do you assert you’re entitled to? Have you got a figure on it?
MS JIN: Your Honour, I’m sure I’m entitled to more than $50,000. The reason that I ask for $50,000 is because the limit of the jurisdiction in Magistrates Court [sic]. ...”
He omitted, however, to add that Ms Yi said also in that last answer:
If I gather more evidence that [sic] I might well transfer the application to the Supreme Court if I realise there’s more money involved in this case.
In addition, later in that same hearing the following exchange occurred:
MS JIN: Your Honour, I don’t have the full detail of the defendant’s financial situation and therefore I retain my rights to – how do you say – to correct if there is anything.
HIS HONOUR: Well, I can’t transfer it to the Supreme Court. The Supreme Court has to make an order transferring it to the court. I’ve been trying to suggest to the pair of you that these matters are best kept well away from courts.
Ms Yi then set out in her affidavit occasions when Dr Ai failed or refused to provide financial information. I do not need to detail them, but, by my calculation, Dr Ai failed to comply on time or, alternatively, at all, with seven directions to provide evidentiary material, the bulk of which related to his financial affairs. This delay and failure to provide information must have hampered Ms Yi in considering her position and getting proper legal advice on the inadequate information she had. The comments above show she was, quite reasonably, reserving her position until she obtained the information to which she was entitled.
I do note also that in the hearing before Magistrate Cush on 16 February 2010, the transcript records Ms Yi saying as follows:
MS JIN: Okay. So, I --- I got a lawyer’s suggestion that you should run this case in the Supreme Court. And you, you will get more money. But I said, you know, it’s ok as long as you know, it’s fair justable [sic], you know. And I know Magistrate jurisdiction power is only for $50,000. And it’s ok with me. But you know, I --- it’s just my ---, it’s just my intention I wish that you know, respondent will, will negotiate with me or try to settle the matter with me [sic]. But, you know, I even made offer to him [sic]. And you know, he refused to, refused to do any negotiation.
While that is very close to Ms Yi abandoning the opportunity to apply for a transfer to this court, I am not satisfied on the whole of the evidence that this is so. My reasons for this are that at this stage, Ms Yi had still not received the statement of financial position of Dr Ai that on 19 January 2010 had been ordered to be provided. In addition, I am not satisfied that the legal advice received included advice about post-separation contributions and asset enhancement. These are, after all, fairly technical matters and Ms Yi’s evidence was that legal advice was provided at that stage by “Duty Lawyers”. Finally, she had been pursuing the claim in the Magistrates Court for some time. It is understandable that, unless there was a major change in her circumstance, this is where she would continue unless given legal advice to the contrary. The real question of waiver arises at the time of commencement of proceedings (if full knowledge of the relevant facts, law and circumstances are known) or when, thereafter, that full knowledge becomes known. I am not satisfied that this is the position here.
It seems to me that, in the circumstances, it is not the case that the Master was wrong in his finding, properly understood and, further, that the original choice of forum, the Magistrates Court, was not a choice whereby Ms Yi had waived her right to apply for a transfer. She subsequently reserved her right, on production of proper information, to seek a transfer and, in my view, did not abandon that position until she retained lawyers on a full-time basis.
Proceedings in the Federal Magistrates Court
Dr Ai did make a complaint about a suggestion made by Mr Brzostowski SC to the Master that there would be an efficiency and cost savings in the transfer because there were proceedings between the parties already in the Federal Magistrates Court. This is the matter referred to above (at [14]).
Dr Ai had made an application to that Court. That application was to be heard on 28 June 2010. That was some ten days after the hearing before the Master. The Master noted that Mr Brzostowski SC submitted that this was a reason for the transfer while Dr Ai said that they were quite unrelated proceedings.
The Master made no definite finding about this issue. It seems to me unlikely that it would have weighed heavily on the mind of the Master for it seems quite unlikely that a hearing date in this matter would have been able to be given at the same time as the other matter given its proximity.
Dr Ai said that, since those proceedings he had commenced had now been finalised, one argument taken into account by the Master had fallen away and to that extent undermined the decision.
I do not see it that way. Certainly, this factor was no longer relevant. On the other hand, it did not seem to me to be an important factor in the Master’s reasoning. Far more important was the change in the legislative approach to such applications. His Honour said:
In a number of applications I have referred to the amendments to the Family Law Act giving the Family Court of Australia jurisdiction to determine applications under the Domestic Relationships Act. Indeed in relation to domestic relationships which have come to an end since March last year this court no longer has jurisdiction to determine such applications and they must be brought in the Family Court of Australia.
I have quoted in earlier decisions the remarks made by the Commonwealth Attorney-General, Mr McClelland in his second reading speech when that legislation was before the House of Representatives in which the Attorney referred to the facilities offered by the Family Court of Australia and the Federal Magistrates Court for counselling and mediation and other facilities which are offered in those courts and which are unavailable in the courts of the Territory and I have referred to the Attorney’s remarks about those Commonwealth Courts being specialist courts which deal almost exclusively with the sorts of issues that arise in the present litigation.
Whilst as I said it is not a simple balancing task, I am satisfied on reflection that the Family Court of Australia is the more appropriate court to determine the present proceedings than this court and I am satisfied that it is in the interests of justice that the proceeding be determined by the Family Court rather than by this court.
Having arrived at that view it seems to me as I have said previously that this court has no discretion about the matter and is obliged to order the transfer to the Family Court.
That seems to me to have set out the important issue seen by his Honour rather than the pending of other proceedings.
I do not see any merit in this complaint.
The Transfer of Proceedings
The basis on which the court will exercise its discretion to order the transfer of proceedings from one court to another has been well set out in Banks v Hollingsworth and Anor [1893] 1 QB 442 when Lord Esher MR said (at 447-8):
The question upon an application of this nature is whether, considering all the circumstances of the case and the interests of the parties and of public justice, the case ought to be tried in the High court rather than in that in which the action was brought, and the judge who has to determine the question of removal must consider all the circumstances. He must consider the amount of the claim; it may be important if the amount claimed is very small, yet, if the case involves questions of a complex or highly difficult nature requiring the knowledge and experience of the judges at the superior Court for their determination, the judge may well be of opinion that it should be tried in the superior Court. There are many other circumstances which would properly influence his decision as to the propriety of removal, such, for instance, as the Court in which justice will in the particular case be more speedily arrived at; for it might happen that in the superior Court a case involving some difficulty could not be reached for some months, yet the inferior Court might be perfectly able to try it, and to try it at once. I do not say that, upon any one of such points as I have suggested being clearly made out, a judge would be obliged to take either the one course or the other as regards the removal of the action; all that the clause means, in my opinion, is that the judge must say, after a reasonable, judicial, and careful consideration of the circumstances, whether an action ought rather to be tried in the High Court or in the Court in which it was brought ...
See also Ronald v Harper [1908] VLR 674 (at 676-7).
In cases of claims for damages for personal injuries, it has been held that where the compensation is likely to exceed the monetary jurisdictional limit of the inferior court, the plaintiff “should be, in ordinary circumstances, permitted to have that cause of action adjudicated upon by the appropriate tribunal”: Ex parte Delponte; Re Thiess Bros Pty Ltd [1965] NSWR 1468 (at 1469) per Asprey J.
More recently, Bryson J, after referring to this decision, said in Sanderson Motors Pty Ltd v Kirby [2000] NSWSC 924 (at [4]):
When asked to exercise this power the Court should, in my opinion, appraise the facts and circumstances of the case before it and consider whether the applicant has shown something which, within the framework of the purposes for which the power exists, is a sound ground or a good reason why an order ought now to be made. The subject does not admit of more particular exposition.
This statement was approved and followed by Harrison J in Nationwide News Pty Ltd v Vasiljkovic [2009] NSWSC 1227 (at [6]).
In Kalis v Waltham [2010] ACTSC 94, Master Harper commented (at [22], [26]) in reference to the power of transfer under s 270 of the Magistrates Court Act 1930 (ACT):
22.Whilst the power is a general one, the overwhelming volume of applications for removal are made in actions for damages for personal injury, usually in circumstances where the plaintiff’s condition has worsened since proceedings were commenced, or where counsel has advised that the upper limit of damages might exceed $50,000.00.
...
26.Almost always such applications will be granted, the court taking the view that any prejudice to the defendant arising from the removal is capable of being met by orders for costs, and perhaps other matters, when final orders are made in the action.
The interests of justice in such circumstances were clearly foremost in his Honour’s consideration for he then noted (at [27]):
It is quite conceivable that this court might refuse an application and subsequently the Magistrates Court might assess damages in a sum of more than $50,000.00. The Magistrates Court would be obliged to enter judgment for the limit of its jurisdiction. A plaintiff in those circumstances would have been done a great injustice, far outweighing any disadvantage to a defendant where removal was ordered but the plaintiff was subsequently awarded less than $50,000.00.
This is not, of course, a claim for compensation for personal injuries. The same general approach, however, will apply. The circumstances where the order for a transfer will be refused are quite limited. A number of them are set out in Taylor P (General Editor), Ritchie’s Uniform Civil Procedure NSW (LexisNexis Butterworths: Sydney, 2005), looseleaf, at p 2885; [s 140.20]. I do not need to set them out.
In my view, none are relevant to this case. While delay may be prejudicial to Dr Ai, in that the value of his assets have likely increased over time and will thus be greater at the time of trial than, for example, at the date of separation, that is not an absolutely determining factor. In any event, as I have said, that delay is neither really caused by nor added to by the Master’s decision.
Indeed, it could be said fairly that Dr Ai has contributed to delay in these proceedings by the failure to provide financial information as required in the Magistrates Court and his failure to comply, or comply in a timely fashion, with orders and directions in that Court.
In my view, the Master carefully evaluated the circumstances and his discretion was exercised in accordance with the correct principles.
In my view, Dr Ai’s interests would appear to be best served by preparing for and pursuing the litigation as vigorously as he can in the Family Court of Australia to as early and just a conclusion as can be attained.
Costs
I am concerned that Dr Ai has been prejudiced by what was an application for an adjournment, to make this application on the hearing date. I have held that Ms Yi had understandable reasons for so doing, but she cannot thereby escape the fact that this has caused Dr Ai prejudice.
I am well aware that Aon has decided that prejudice cannot always be adequately compensated for by costs. See above (at [47]). Nevertheless, that does not decide the converse, namely that costs should not be used to compensate for prejudice where appropriate.
It seems to me that the delay in making the application in this case disentitles Ms Yi to her costs of the application. On the other hand, should she succeed in her claim and be found to be entitled to more than $50,000, it would be unfair that she have to pay Dr Ai’s costs, especially as he may have been said to have contributed in some part to that delay.
In the circumstances, it seems to me that each party should bear their own costs of the hearing before the Master.
As to the costs of the appeal, the situation is somewhat different. Dr Ai has not been wholly unsuccessful. His claim for a costs order has succeeded and, of course, he had to appeal to achieve that.
In addition, I consider that, though the arguments did not ultimately succeed, he did show an error in the way the argument about superannuation was decided. It also seems to me that his complaints about delay and his reliance on Aon were, while not able to determine the appeal, substantial arguments that certainly coloured the approach to the appeal and were probably determinative as to costs.
In the circumstances, I consider that each party should pay their own costs of the appeal.
I certify that the preceding one-hundred and three (103) numbered paragraphs are a true copy of the Reasons for Judgment herein of his Honour, Justice Refshauge.
Associate:
Date: 6 May 2011
Counsel for the appellant: Dr Yang Ai (self represented)
Solicitor for the appellant: Dr Yang Ai (self represented)
Counsel for the respondent: Mr G Brzostowski SC
Solicitor for the respondent: Dobinson Davey Clifford Simpson
Date of hearing: 15 November 2010
Date of judgment: 6 May 2011
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