LL Pty Limited and Dawson and Ors
[2015] FamCA 709
•27 August 2015
FAMILY COURT OF AUSTRALIA
| LL PTY LIMITED & DAWSON AND ORS | [2015] FamCA 709 |
| FAMILY LAW – INTERIM – JURISDICTION – CROSS-VESTING – Whether proceedings should be transferred to Supreme Court of New South Wales – Where the parties are engaged in several pieces of litigation in different courts – Whether transfer “in the interests of justice” – Consideration of s 5(4) of the Jurisdiction of Courts (Cross-vesting Act) 1987 - Where a judge of the Supreme Court refused an application to have related proceedings transferred to this Court – Where it is found that those proceedings involve a similar substratum of facts as an important issue in the family law proceedings – Where it is found to be in the interests of justice for the matter to be transferred to the Supreme Court. |
| Jurisdiction of Courts (Cross-vesting) Act 1987 ss 5(4) | |
| Bankinvest AG v Seabrook (1988) 14 NSWLR 711 LL Pty Limited v Dawson … | |
| APPLICANT: | LL Pty Ltd |
| 1ST RESPONDENT: | Ms Dawson (deceased) Ms Simpson as Personal Legal Representative |
| 2ND RESPONDENT: | Mr Worth |
| 3RD RESPONDENT: | Mr Dawson |
| FILE NUMBER: | SYC | 4098 | of | 2014 |
| DATE DELIVERED: | 27 August 2015 |
| PLACE DELIVERED: | Sydney |
| PLACE HEARD: | Sydney |
| JUDGMENT OF: | Loughnan J |
| HEARING DATE: | 18 August 2015 |
REPRESENTATION
| SOLICITOR FOR THE APPLICANT: | Cordato Partners |
| COUNSEL FOR THE APPLICANT: | Mr Lynch SC Mr Klooster |
| COUNSEL FOR THE 1ST RESPONDENT: | Mr Maurice |
| SOLICITOR FOR THE 1ST RESPONDENT: | Mr G |
| 2ND RESPONDENT: | No appearance |
| COUNSEL FOR THE 3RD RESPONDENT: | Mr McGrath SC |
| SOLICITOR FOR THE 3RD RESPONDENT: | Owen Hodge |
Orders
These proceedings are transferred to the Supreme Court of New South Wales to be joined with proceedings numbered ….
IT IS NOTED that publication of this judgment by this Court under the pseudonym LL Pty Limited & Dawson and Ors has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
| FAMILY COURT OF AUSTRALIA AT SYDNEY |
FILE NUMBER: SYC4098 of 2014
| LL Pty Ltd |
Applicant
And
| Ms Dawson (Ms Simpson as Personal Legal Representative) |
1st Respondent
And
| Mr Worth |
2nd Respondent
And
| Mr Dawson |
3rd Respondent
REASONS FOR JUDGMENT
Introduction
Ms Dawson and Mr Worth first cohabited in April 2003. They never married and have no children together. They separated in early 2014. Proceedings arising out of their de facto relationship commenced on 16 July 2014 when Ms Dawson filed an application seeking maintenance and property settlement orders. She also sought an order under s 106B of the Family Law Act 1975 (Cth) (“the Family Law Act”) to set aside the transfer of a property at B Street, Suburb C (“the Suburb C property”) to LL Pty Ltd (“LL”) from a company previously owned by Ms Dawson and Mr Worth called D Pty Ltd. Ms Dawson also sought interim injunctions to preserve that asset.
Ms Dawson passed away on 16 March 2015. There is some controversy about Ms Dawson’s will but pursuant to an order of the NSW Supreme Court, her mother, Ms Simpson, acts as the legal personal representative of her estate. Ms Simpson has applied to continue the property settlement proceedings notwithstanding Ms Dawson’s death.
Mr Worth was declared bankrupt on his own petition on 20 October 2014.
The current proceedings concern an interim application filed on 5 June 2015 by LL that the family law proceedings be cross-vested and transferred to the Supreme Court of New South Wales pursuant to the provisions of the Jurisdiction of Courts (Cross-Vesting) Act 1987 (Cth) (“the Act”).
Ms Simpson and Mr Dawson, who says the Suburb C property is held on trust for him, oppose the transfer of the proceedings. Mr Dawson is the brother of Ms Dawson and the son of Ms Simpson.
LL, Ms Simpson and Mr Dawson are all represented before the Court. There was no appearance at the hearing by or on behalf of Mr Worth or his trustee in bankruptcy.
Applications
LL sought the following orders:
Pursuant to Section 5(4) of the Jurisdiction of Courts (Cross-Vesting) Act 1987 (Cth) these proceedings be transferred to the Supreme Court of NSW at Sydney with a view to being heard concurrently with the Supreme Court proceedings (LL Pty Ltd v Dawson & Ors) with Case Number ….
Ms Simpson and Mr Dawson opposed the application. No response was filed on behalf of Mr Worth or his trustee in bankruptcy.
Written Evidence
LL relied on:
·Affidavit of Mr E filed 19 March 2015;
·Affidavit of Ms F filed 22 May 2015; and
·Affidavit of Ms F filed 5 June 2015.
Ms Simpson relied on:
·Affidavit of Ms Simpson filed 8 May 2015;
·Affidavit of Ms Simpson filed 19 June 2015; and
·Affidavit of Mr G filed 12 August 2015.
Mr Dawson relied on:
·Affidavit of Mr H filed 27 March 2015;
·Affidavit of Ms I filed 8 May 2015; and
·Affidavit of Ms I filed 30 June 2015.
Background Facts
In 2001 Mr Dawson became a paraplegic.
Ms Dawson and Mr Worth commenced cohabitation in April 2003.
Mr Dawson says that he and Ms Dawson acquired a property at J Street, Suburb K (“the Suburb K property”), as tenants in common in equal shares in 2004.
D Pty Ltd bought the Suburb C property on 28 July 2004. Ms Dawson and Mr Worth were the shareholders and directors of D Pty Ltd. It is Ms Dawson’s evidence that the property was purchased for her brother, Mr Dawson. She deposed that the property was specifically modified for Mr Dawson because of his disability. Mr Dawson says that at the time the Suburb C property was purchased, he exchanged his 50 percent share in the property at Suburb K, for D Pty Ltd’s interest in the Suburb C property.
In 2008 the Suburb K property was sold and Ms Dawson and Mr Worth kept the sale proceeds of approximately $1,070,000.
Ms Dawson deposed that in December 2013, Mr Worth removed her as a director of D Pty Ltd by forging her signature on the relevant documents, without her consent or knowledge.
Ms Dawson and Mr Worth separated on 1 January 2014.
D Pty Ltd transferred the Suburb C property to LL on 5 February 2014 and that by way of consideration, D Pty Ltd received shares worth $1,005,000 in LL.
On 30 May 2014, LL commenced proceedings in the Supreme Court of New South Wales (“the Supreme Court proceedings”) by way of a Statement of Claim against Mr Dawson seeking possession of the Suburb C property, a writ for possession, an occupation fee and costs.
Ms Dawson commenced proceedings for spousal maintenance and property settlement in this Court on 16 July 2014. She also sought interim relief including:
a)Discovery concerning the transfer of the Suburb C property to LL;
b)An order that LL forthwith re-transfer the Suburb C property to D Pty Ltd; and
c)An order that she be reinstated as a director of D Pty Ltd.
She sought on a final basis that the transfer of the Suburb C property to LL be set aside.
Nine days later, on 25 July 2014, LL mortgaged the Suburb C property for $1,005,000 to M Pty Ltd and N Pty Ltd. In obtaining the mortgage, Ms O, the sole director of LL, signed two statutory declarations stating that she had no knowledge of any Court proceedings in relation to the property at Suburb C.
On 12 August 2014, Mr Dawson filed an Amended Defence and First Cross-Claim in the Supreme Court proceedings against LL, D Pty Ltd, Ms Dawson and Mr Worth. He sought a declaration that D Pty Ltd held the Suburb C property in trust for him and that LL subsequently holds it on trust for him.
On 8 October 2014 LL filed an Amended Statement of Claim in the Supreme Court proceedings, adding D Pty Ltd as second defendant and Mr Worth as third defendant.
Mr Worth filed for bankruptcy on his own petition on 20 October 2014 with Mr P appointed as his trustee.
On 25 October 2014 LL filed an Application in a Case in this Court seeking to be removed as a party to these proceedings. The application is still pending and has in effect been overtaken by events. Orders are sought against LL and thereby it is necessarily a party. The particular relief is a coherent part of property settlement proceedings. Lest it be thought otherwise, there is no prospect of LL being removed as a party unless the s 106B claim is withdrawn or otherwise determined.
On 9 January 2015 Mr Dawson filed a further Amended Defence in the Supreme Court proceedings.
On 4 February 2014 Mr Dawson filed an Application in a Case in this Court seeking his joinder to these proceedings. On 12 February 2015 Justice Rees ordered that Mr Dawson be joined as a party to these proceedings. She also ordered that a case guardian be appointed for the Ms Dawson and that LL’s application for removal as a party in the proceedings be stood over to 30 March 2015. Mr G, solicitor, was appointed as case guardian for the Ms Dawson.
On 23 February 2015 Justice Lindsay of the Supreme Court made an interim order granting Ms Simpson special letters of administration of Ms Dawson’s estate which specifically authorised her conduct of these proceedings as the legal personal representative of Ms Dawson.
On 24 February 2015 D Pty Ltd was wound up on the application of Q Pty Ltd Q Pty Ltd is the accountant for both LL and D Pty Ltd.
On 27 February 2015 Justice Schmidt of the Supreme Court heard Mr Dawson’s motion to transfer the Supreme Court proceedings to this Court. On 6 March 2015 Schmidt J dismissed the transfer application and ordered that the Supreme Court proceedings be stayed pending determination of LL’s application in this Court to be removed as a party to the proceedings.
Sadly, in March 2015 Ms Dawson took her own life. Mr G advised the parties’ legal representatives of her death.
On 17 March 2015, Mr Worth attempted to access Ms Dawson’s house. Mr Dawson and the police were present.
On 24 March 2015 Mr Worth’s solicitors sent the other parties in the proceedings an affidavit by Mr Worth which annexed a will by Ms Dawson dated 7 April 2004. Mr Worth asserted that he was Ms Dawson’s executor and on this basis requested that the Family Court proceedings be withdrawn (sic).
On 27 March 2015, Mr Dawson’s solicitors served on the parties’ legal representatives a copy of a will by Ms Dawson dated 29 November 2014.
On 30 March 2015 the matter came before me in the duty list. Remarkably, Mr Dawson sought to have LL’s Application in a Case to be removed as a party to the proceedings, fixed for hearing. LL opposed that and contended that there was a contest concerning the Ms Dawson’s wills and no steps should be taken pending the granting of probate.
On 7 April 2015 Ms Simpson applied for administration ad litem of Ms Dawson’s will of 29 November 2014.
On 10 April 2015 Mr Worth lodged a caveat in relation to the application of letters of administration.
On 23 April 2015 Ms Simpson was granted letters of administration ad litem of Ms Dawson’s will. Mr G advised the parties and filed a Notice of Address in these proceedings, for Ms Simpson.
On 25 May 2015 the matter came before me. LL objected to the appointment of Ms Simpson as legal personal representative. The issues were stood over to 9 June 2015.
On 5 June 2015, LL filed the present application, an Application in a Case to transfer these proceedings to the Supreme Court.
The matter came before me on 9 June 2015 and it was agreed that the matter be stood over to 18 August 2015.
On 20 July 2015, Mr Worth emailed the parties legal representatives and advised them Ms R is now trustee of the D Pty Ltd Trust.
On 21 July 2015 an injunction was granted in the Supreme Court proceedings restraining Mr Worth from dealing with the D Pty Ltd Trust. On 10 August 2015 that injunction was continued until further order.
On 18 August 2015, LL’s application for the transfer of the proceedings was heard and judgment was reserved.
The Relevant Legislation
The relevant provision of the Jurisdiction of Courts (Cross-vesting Act) 1987 is as follows:
Section 5 (4)
Where:
(a) a proceeding (in this subsection referred to as the relevant proceeding ) is pending in the Federal Court or the Family Court (in this subsection referred to as the first court ); and
(b) it appears to the first court that:
(i) the relevant proceeding arises out of, or is related to, another proceeding pending in the Supreme Court of a State or Territory and it is more appropriate that the relevant proceeding be determined by that Supreme Court;
(ii) having regard to:
(A) whether, in the opinion of the first court, the relevant proceeding or a substantial part of it would have been incapable of being instituted in that court, apart from this Act and any law of the Australian Capital Territory or the Northern Territory relating to cross-vesting of jurisdiction; and
(B) whether, in the opinion of the first court, the relevant proceeding or a substantial part of it would have been capable of being instituted in the Supreme Court of a State or Territory, apart from this Act and any law of a State or Territory relating to cross-vesting of jurisdiction; and
(C) the extent to which, in the opinion of the first 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 State or Territory referred to in sub-subparagraph (B) and not within the jurisdiction of the first court apart from this Act and any law of the Australian Capital Territory or the Northern Territory relating to cross-vesting of jurisdiction; and
(D) the interests of justice;
it is more appropriate that the relevant proceeding be determined by that Supreme Court; or
(iii) it is otherwise in the interests of justice that the relevant proceeding be determined by the Supreme Court of a State or Territory;
the first court shall transfer the relevant proceeding to that Supreme Court.
The Explanatory Memorandum of the Act makes clear the intention that each court should basically retain its own jurisdiction and that forum shopping should be avoided. The Explanatory Memorandum states:
“… The provisions relating to cross-vesting will need to be applied only in those exceptional cases where there are jurisdictional uncertainties and where there is a real need to have matter tried together in the one court… Courts will need to be ruthless in the exercise of their transferral powers to ensure that litigants do not engage in “forum-shopping” commencing proceedings in inappropriate Courts.
The history and purpose of the cross-vesting scheme have been referred to in a number of authorities. In the decision of the New South Wales Court of Appeal in Bankinvest AG v Seabrook (1988) 14 NSWLR 711(“Bankinvest”), the principal judgment was given by Rogers AJA, with whom Street CJ and Kirby P concurred. After discussing the objects and history of the cross-vesting legislation, Street CJ commented at [713] to [714]:
The cross-vesting legislation passed by the Commonwealth, the States and the Territories both conferred on each of the ten courts Australia-wide jurisdiction and set up the mechanism regulating the transferring of proceedings from one of these ten courts to another. In relation to transfer the common policy reflected in each of the individual enactments is that there must be a judicial determination by the court in which proceedings are commenced either to transfer or not to transfer the proceedings to one of the other nine based, broadly speaking, upon consideration of the interests of justice… Viewed from this standpoint it can be seen to be highly desirable that the judicial administration of the day to day working of the cross-vesting scheme is not encumbered by an encrustation of judge-made pronouncements of principles to be applied when considering making a transfer order. It calls for what I might describe as a “nuts and bolts” management decision as to which court, in the pursuit of the interests of justice, is the more appropriate to hear and determine the substantive dispute.
Further, at page 725 – 726 Rogers AJA commented that:
It is important that full effect be given by the courts to the imaginative and detailed code for ensuring that throughout Australia disputes are dealt with by the one court and that the court most appropriate for the particular dispute. Consistently with the preservation of dual State and Federal court systems and with State courts dispensing justice within the State boundaries, there has been a legislative recognition of the need to transcend State boundaries in appropriate cases. No longer is it appropriate to regard the court of another State as a “foreign” court.
The applicant in this case submits that the proceedings should be transferred because of the interests of justice (s 5(4)(b)(iii)).
In BHP Billiton Ltd v Schultz [2004] 221 CLR 400 (“Schultz”), Gleeson CJ, (with whom McHugh and Heydon JJ agreed) said in relation to the “interests of justice” requirement:
[14] In the context of the Cross-vesting Act, one is not concerned with the problem of a court, with a prima facie duty to exercise a jurisdiction that has been regularly invoked, asking whether it is justified in refusing to perform that duty. Rather, the court is required by statute to ensure that cases are heard in the forum dictated by the interests of justice. An application for transfer under s 5 of the Cross- vesting Act is brought upon the hypothesis that the jurisdiction of the court to which the application is made has been regularly invoked. If it appears to that court that it is in the interests of justice that the proceedings be determined by another designated court, then the first court ‘‘shall transfer’’ the proceedings to that other court. There is a statutory requirement to exercise the power of transfer whenever it appears that it is in the interests of justice that it should be exercised. It is not necessary that it should appear that the first court is a ‘‘clearly inappropriate’’ forum. It is both necessary and sufficient that, in the interests of justice, the second court is more appropriate.
[15] … The interests of justice are not the same as the interests of one party, and there may be interests wider than those of either party to be considered. Even so, the interests of the respective parties, which might in some respects be common (as, for example, cost and efficiency), and in other respects conflicting, will arise for consideration. The justice referred to in s 5 is not disembodied, or divorced from practical reality.
In Valceski v Valceski [2007] NSWSC 440, Brereton J summarised the High Court’s consideration in Schultz on the interests of justice:
[69] … As BHP v Schultz makes clear, the interests of justice concern those of both parties, and rather than the selection of the most advantageous, or least disadvantageous, forum for one of them, the “interests of justice” are to be judged by more objective factors, such as facilitate identification of the “natural forum”, in which objectively judged it might be expected that the dispute would fall to be resolved, with its concomitant juridical advantages and disadvantages for each party, whatever they may be: cf British American Tobacco v Gordon (at [47]).
In the Full Court decision in Re Chapman and Jansen (1990) 13 Fam LR 853 (“Chapman”) Fogarty J commented:
… the question of whether to transfer to the state court or proceed to determine in the Family Court was a matter of justice in each case. The question in each case was, which is the ‘natural forum’, or which court has the ‘most real and substantial connection’.
As to which party carries the onus of establishing that the interests of justice requires a transfer, in Chapman, after referring to Bankinvest and Bourke v State Bank of New South Wales (1988) 85 ALR 61, Nicholson CJ observed:
It seems to me that where proceedings have been instituted by a litigant in a court having jurisdiction, anyone seeking to displace that jurisdiction at least carries the forensic onus of persuading the Court that it ought to order a transfer. See also Waterhouse v ABC (1989) 86 A.C.T.R. 1 per Kelly J. at pp. 11-12.
LL bears that onus in these proceedings.
Is A Transfer to the Supreme Court in the Interests of Justice?
Submissions
It was submitted for LL that the proceedings running in this court are “satellite litigation” to the controversy between LL and Mr Dawson in the Supreme Court. It was submitted that the continuation of proceedings in this Court will ultimately delay the resolution of the entire controversy between the relevant parties. Underpinning this submission, LL argued that any final decision of this court will open up the chance of an appeal specific to the issue litigated in this court. If however, the proceedings are cross-vested, an appeal is possible, however that appeal could deal with the determination of the entire controversy between the parties and reduce the overall delay experienced by the parties.
LL argued that this Court does not have jurisdiction to deal with the claim Mr Dawson advances against it in these proceedings. That seems to be the main basis on which Schmidt J refused on 27 February 2015 to transfer the Supreme Court proceedings to this court.
It was further submitted that if the transfer of the Suburb C property from D Pty Ltd to LL is set aside, the property would not form part of Ms Dawson’s estate. On these grounds, it was submitted that Ms Dawson’s estate is likely to be insolvent, and as such, the parties with an interest in the Suburb C property are not Ms Dawson and Mr Worth, but rather third parties. Schmidt J noted at paragraph 19 of her judgment, Mr Dawson conceded that there was force in this submission.[1]
[1] LL Pty Limited v Dawson [2015] NSWSC 165
LL submitted that in circumstances where the substantive contestants in this litigation are not the usual objects of concern of the Family Law Act, and that the continuation of the proceedings in this Court bi-furcates the controversy between those contestants, that it is more appropriate that the proceedings in this Court be determined by the Supreme Court. It was also put that a transfer would not deprive the parties of rights under the Family Law Act if any are properly available.
Counsel on behalf of Ms Dawson opposed LL’s application. It was submitted that the core of these proceedings is the de facto property settlement claim, made by Ms Dawson. Counsel argued that there are issues in the matter that fall within the jurisdiction of this Court, including what happened with the wealth accumulated by the parties prior to separation and the division of the superannuation interests of Ms Dawson and Mr Worth. Counsel submitted that the Supreme Court is not specialised to deal with the complex property matters and bankruptcy matters between a de facto couple that are present in this case.
It was also argued on behalf of Ms Dawson that there is no certainty as to how the matter will proceed in the Supreme Court and that such a transfer will not be in the interests of justice and mean the path of the case will be unknown.
It was submitted for Mr Dawson that there is no sufficient basis to have the matter transferred to the Supreme Court. He argued that the current proceedings are substantially similar to the Supreme Court proceedings in that all of the parties to both proceedings are the same, save for D Pty Ltd; and, that both proceedings seek orders in relation to the breakdown of the relationship between Ms Dawson and Mr Worth.
It was submitted on behalf of Mr Dawson that if the proceedings were to be heard in the Supreme Court, they would require the accruing of the Family Court’s jurisdiction onto the Supreme Court and that the Family Court is the more appropriate place to have the proceedings heard.
Discussion
It falls to LL to establish that it would be in the interests of justice to transfer the proceedings before this Court to the NSW Supreme Court.
The potential mischief of having disputes involving a similar substratum of facts determined in different courts, is obvious. Common to both sets of proceedings are the claims of Mr Dawson in relation to the Suburb C property. LL and Mr Dawson have been drawn into the family law proceedings because of the Suburb C property.
An application was made in the Supreme Court by Mr Dawson in February 2015 to transfer the Supreme Court proceedings to this Court. On 6 March 2015 Schmidt J dismissed the transfer application and ordered that the Supreme Court proceedings be stayed pending determination of LL’s application in this Court. Importantly, Schmidt J said in his judgment dated 6 March 2015[2]:
18. While common sense plainly suggests that, given the common factual underpinnings of the parties’ respective cases in the two sets of proceedings, the one court should deal with the entire controversy surrounding the ownership and fraudulent disposal of the interest in the Suburb C property, the transfer order which Mr Dawson sought cannot be made.
19. That follows from a concession made on his behalf at the hearing, that there was force in LL’s case that the Family Court does not have jurisdiction to deal with the claims which Mr Dawson advances against it in these proceedings, they both being third parties to the relationship between Ms Dawson and M[r] Worth.
20. That concession was consistent with the view taken by Brereton J in Valceski. The position would be different if Ms Dawson was actively seeking relief in these proceedings against LL. She is not. In the result, I cannot see that the Family Court has jurisdiction over the dispute between third parties to the relationship between Ms Dawson and Mr Worth, which is the subject of the Family Court proceedings.
21. Accordingly, the transfer application must be refused.
[2] LL Pty Limited v Dawson [2015] NSWSC 165
Schmidt J’s decision means that it is not possible to consolidate all of the litigation in this Court.
The submissions in favour of transfer on behalf of LL, went further than the effect of the decision of Schmidt J. As to the submission made by LL that this Court does not have jurisdiction to hear some other aspects of the controversy, I did not really follow the argument. The fact of Mr Worth’s bankruptcy can be accommodated within Part VIIIAB of the Family Law Act. The fact of valuable superannuation interests (that recently came to notice) suggests that the earlier concerns that there may not be any property of Ms Dawson and Mr Worth to settle, may be avoided. If, as is suggested, the family law proceedings prove not to be viable (e.g. Ms Simpson is replaced as the legal personal representative of Ms Dawson; or a finding is made that there is no property of the de facto relationship between Ms Dawson and Mr Worth), that would reinforce the need for the proceedings to be conducted in the Supreme Court.
The submission on behalf of Ms Dawson included reference to the superannuation interests in ‘The Dawson Worth Superannuation Fund’. In the event that is a self managed fund then orders can be addressed to a party/trustee and the restrictions of the superannuation law are avoided to some extent.
Lest it be argued that this claim cannot be continued on behalf of the deceased estate, the case of Casey and Braione-Howard and DRFDB Authority (2005) FLC 93-219 makes clear that the court may exercise its powers under s 79(8), to make orders pursuant to ss 90MT and 90MS provided that the superannuation interest constitutes “property” of the Ms Dawson’s estate.[3] In this case, the Full Court held that a productivity superannuation benefit that was payable to the deceased’s estate could be split in favour of the deceased’s former wife so that she would be entitled to be paid a specific percentage of the payment due to the estate, with a corresponding reduction in any entitlement of the deceased’s estate to that benefit. Similar issues could arise in these proceedings. Here the principal parties were not married but s 90SM(8), dealing with de facto relationships, is in similar terms to s 79(8).
[3] At paragraph 17 of Casey and Braione-Howard and DRFDB Authority (2005) FLC 93-219, their Honours Bryant CJ, Finn, Coleman, Warnick and O’Ryan JJ outlined that “… There is not doubt that the productivity benefit is payable to the estate of the deceased member. As such it is “property” of the estate and able to be the subject of an order under s 79(8) of the Family Law Act if, in the exercise of its discretion, the Court considers so doing to be just and equitable…”
The Family Law Act contemplates splittable payments of superannuation being payments made to a deceased estate:
FAMILY LAW ACT 1975 - SECT 90ME
Splittable payments
(1) Each of the following payments in respect of a superannuation interest of a spouse is a splittable payment :
(a) a payment to the spouse;
(b) a payment to another person for the benefit of the spouse;
(c) a payment to the legal personal representative of the spouse, after the death of the spouse;
(d) a payment to a reversionary beneficiary, after the death of the spouse;
(e) a payment to the legal personal representative of a reversionary beneficiary covered by paragraph (d), after the death of the reversionary beneficiary.
(2) A payment is not a splittable payment if it is prescribed by the regulations for the purposes of this subsection. The regulations may prescribe a payment either:
(a)generally (that is, for the purposes of all payment splits in respect of a superannuation interest); or
(b)only for the purposes of applying this Part to a particular payment split in respect of a superannuation interest.
(3) If a payment is made to another person for the benefit of 2 or more persons who include the spouse, then the payment is nevertheless a splittable payment, to the extent to which it is paid for the benefit of the spouse.
However, coming back to the central issue, in Chapman Nicholson CJ stated:
… I think that the fact that there are a series of disputes between the parties, some being within the jurisdiction of the court and some being outside it, is a classic situation for the invocation of the provisions of cross vesting legislation. It could not, in my view, be in the interest of justice to have two parallel sets of proceedings between the same parties being undertaken in different courts relating to different issues arising out of their de facto relationship.
Without transferring these proceedings, the resolution of the controversy between the parties will be split between courts. If the issue is litigated in both courts, there is potential for delays to occur in both sets of proceedings with one court awaiting a decision of the other court. The cost of litigating the proceedings in two different courts increases the legal costs of all parties.
As Schmidt J said, “… common sense plainly suggests that …the one court should deal with the entire controversy surrounding the ownership and fraudulent disposal of the interest in the Suburb C property”. I am satisfied that the interests of justice require the matter to be transferred to the Supreme Court.
I will order that the proceedings be transferred to the Supreme Court of New South Wales to be joined with proceedings numbered ...
Lastly, in the course of final submissions, Mr Grath SC for Mr Dawson said that there was agreement to the Court granting leave to the parties in respect of the use of documents filed or produced in these proceedings. Mr Dawson seeks leave in respect of the Harman obligation[4] and the prohibition on publication contained in s 121 of the Family Law Act. As I understood the submission, Mr Dawson’s lawyers seek to use some documents filed or produced in these proceedings in the Supreme Court proceedings and in order to provide evidence to the NSW Police. Leave was granted to Mr Dawson’s lawyers to provide a minute of the agreed order to my associate for the matter to be considered in chambers. As at the date of drafting these reasons, that approach had not yet been made. Given that the proceedings are being transferred, the first reason for leave is no longer necessary and upon the transfer order being effective, this Court has no jurisdiction to grant leave in the matter. The application will need to be renewed before the Supreme Court.
[4] Harman v Secretary of State for the Home Department [1983] 1 AC 280.
I certify that the preceding seventy six (76) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Loughnan delivered on 27 August 2015.
Associate:
Date: 27 August 2015
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