M v W

Case [2006] SASC 347

SUPREME COURT OF SOUTH AUSTRALIA

(Full Court)

M v W & ANOR

[2006] SASC 347

Judgment of The Full Court

(The Honourable Justice Bleby, The Honourable Justice Besanko and The Honourable Justice Anderson)

23 November 2006

FAMILY LAW AND CHILD WELFARE - DE FACTO RELATIONSHIPS - ADJUSTMENT OF PROPERTY INTERESTS

PROCEDURE - COSTS - JURISDICTION

Application for interim costs order referred to the Full Court by a Master of the Supreme Court - Action involving de facto property dispute where it is alleged that assets held pursuant to a trust – Issue of whether the Court has power to make an interim order for costs – Consideration of two possible sources of power, namely section 40(1) of the Supreme Court Act 1935 (SA) and the inherent jurisdiction of the Court – Application allowed (by majority) – Referred back to Master to hear and determine the application on the merits.

Corporations Act 2001 (Cth) s 1335(1); De Facto Relationships Act 1996 (SA) s 3, 9, 10, 11, 14A; De Facto Relationships Act 1984 (NSW); Family Law Act 1975 (Cth) s 117, 68L(2); Federal Court of Australia Act 1976 (Cth) s 43; Judiciary Act 1903 (Cth) s 26; Law of Property Act 1936 (SA) s 69; Matrimonial Causes Act 1959 (Cth) s 125; Matrimonial Causes Act 1929 (SA); Property Law Act 1958 (Vic) s 285; Real Property Act 1886 (SA) s 64; Supreme Court Act 1935 (SA) s 40(1), 72, 29(1); Supreme Court Act 1970 (NSW) s 76(1)(a); Supreme Court Act 1958 (Vic) s 24(1); Supreme Court Rules 1987 (SA) r 2.01, 3.04, 3.06, 100, 101.01, 106.04, referred to.
Giller v Procopets [2002] VSC 305; Mansfield v DPP for Western Australia [2006] HCA 38; Parker v Parker (1992) 16 Fam LR 458; Re JJT; Ex parte Victoria Legal Aid (1998) 195 CLR 184; Devlin v Collins (1984) 37 SASR 98, discussed.
Aiden Shipping Co Ltd v Interbulk Ltd [1986] AC 965; Baumgartner v Baumgartner (1987) 164 CLR 137; Breen v Breen (1990) 65 ALJR 195; Cameron v Cole (1943-1944) 68 CLR 571; Copping v ANZ McCaughan Ltd (1995) 63 SASR 523; DJL v Central Authority (2000) 201 CLR 226; Electric Light and Power Supply Corporation Ltd v Electricity Commission of NSW (1959) 94 CLR 554; In the Marriage of D and M Barro (1982) 8 Fam LR 855; Knight v FP Special Assets Ltd (1992) 174 CLR 178; Montreal Trust Co v Churchill Forest Industries (Manitoba) Ltd (1971) 2 DLR (3d) 75; Parij v Parij (1997) 72 SASR 153; Taylor v Attorney-General [1975] 2 NZLR 675; Wilson v Wilson [1966] 2 NSWR 187; GE Dal Pont, "Law of Costs" (2003), [6.6]; Sir Jack Jacob, "The Inherent Jurisdiction of the Court" (1970) 23 Current Legal Problems 23, considered.

M v W & ANOR
[2006] SASC 347

Full Court: Bleby, Besanko and Anderson JJ

  1. BLEBY J:             I am indebted to Besanko J for setting out the background to these…

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AGLC
M v W [2006] SASC 347
Case
[2006] SASC 347
Decision Date

CaseChat Overview and Summary

This case involves an application for an interim costs order in a de facto property dispute, referred to the Full Court of the Supreme Court of South Australia. The plaintiff, who was in a de facto relationship with the defendant for 23 years, seeks a declaration that the defendant holds trust assets for both parties and orders for the revocation of the trust and distribution of the trust property. Additionally, the plaintiff requests an interim costs order of $80,000 under Section 40(1) of the Supreme Court Act 1935 (SA), to be paid into the plaintiff's solicitors' trust account for specified purposes.

The legal issues before the court were whether the Supreme Court had the power to make an interim order for costs under Section 40(1) of the Supreme Court Act 1935 (SA), and whether the inherent jurisdiction of the court could be invoked to make such an order. The court considered the implications of making an interim costs order before a final determination of liability and assessed whether the inherent jurisdiction could support such an order.

The majority of the court held that the Supreme Court does have the power to make an interim costs order under Section 40(1) of the Supreme Court Act 1935 (SA), provided that the plaintiff has at least a prima facie claim to the amount sought. The court concluded that the inherent jurisdiction could also be invoked to make such an order, but it was not necessary to rely on it. The application for an interim costs order was allowed and referred back to the Master to be heard on the merits. The court did not alter the Master's order permitting future documents to be filed under the heading "M v W & Anor".

Orders

Orders of the court

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Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

In my opinion, the inherent jurisdiction does not authorise an interim order for costs which requires a defendant to pay a sum of money for the benefit of the plaintiff before he or she has been held finally liable for that amount.Conclusion In my opinion, there is no power to make the orders sought by the plaintiff and the application should be dismissed. At the time of the reference, the Master made an order that in future the parties be at liberty to file documents in this matter under the heading “M v W & Anor”. Neither party challenged the order and it appears to be justified having regard to the terms of s 14A of the De Facto Relationships Act 1996. I would not alter it.ANDERSON JIntroduction In this matter I have had the opportunity of reading the draft reasons prepared by Besanko J. His Honour sets out the background of this matter in detail. His Honour also analyses the relevant decisions in detail and I am indebted to him for his analysis. I have come to a different conclusion from Besanko J both in relation to his interpretation of s 40(1) of the Supreme Court Act 1935 (SA) and also, in the event that my interpretation is wrong, as to whether the inherent jurisdiction of the court can be invoked in this instance. The Plaintiff’s Claim The plaintiff alleges in her affidavit dated 12 January 2006 that there was an agreement between the plaintiff and the defendant to the effect that money, earned by the plaintiff as a legal practitioner, be paid to the defendant who was to have control of the money for the benefit of them both. They lived in a de facto relationship for 23 years. She further alleges that pursuant to that agreement, the assets of the plaintiff and the defendant were to be held pursuant to a trust. The orders sought by the plaintiff are summarised by Besanko J as follows:1A declaration that the trustee (the second defendant) holds the trust assets for the plaintiff and the defendant;2An order revoking the trust and distributing the trust property in such manner as the court considers just; 3An order for the sale of real property pursuant to s 69 of the Law of Property Act 1936 and s 64 of the Real Property Act 1886 for a division of property pursuant to s 9 of the DeFacto Relationships Act 1996. Besanko J sets out the orders sought in the present application contained in the notice for specific directions filed by the plaintiff:1That pursuant to Section 40 (1) of the Supreme Court Act, the First Respondent will provide payment into the trust account of the plaintiff’s solicitors in the sum of $80,000 for the provision of costs of the plaintiff in this proceedings.2That the payment referred to in Order 1 above be paid by way of cash or bank cheque made payable to Lesley Hastwell & Associates Trust Account. 3That the payment referred to in Order 1 above be made no later than 14 days after the date of this order. 4That the payment referred to in Order 1 above be kept separate in the said trust account and those funds be used only for the payment of accounting fees of Edwards Marshall, the professional fees of Mr Colin Pitchfork, coin valuer, and the professional fees of licensed real property valuers, and any other proper legal disbursements and fees. The Legislation

Ratio Decidendi

Legal Principle Established

Section 11 of the Act relevantly provides :11-Matters for consideration by the court(1) In deciding whether to make an order for the division of property under this Part, and if so the terms of the order, the court-(a)must consider the financial and non-financial contributions made directly or indirectly by or on behalf of the de facto partners to-(i)the acquisition, conservation or improvement of property of either or both partners.….. The whole of the “property” as defined of both former de facto partners is subject to a possible order of the Court. Although I have said proceedings under the De Facto Relationships Act are not proceedings for the administration of a trust, the Court is able to decide on the apportionment of the total property pool of the two former partners. Provided that the Court is satisfied that the claimant for an interim order for costs has at least some prima facie claim to that part of the property pool held by or under the control of the other in an amount equal to or exceeding the amount of the interim order for costs, it will not be difficult for the Court to make an appropriate adjustment upon the final order for the division of the property if those costs should properly be met by the claimant. For these reasons I consider that the Court does have power to make an interim order for costs by virtue of the provisions of section 40(1) of the Supreme Court Act. If necessary I would, for the reasons given by Anderson J, hold that an interim order for costs could be made in the exercise of the inherent jurisdiction of the Court, but in my opinion it is not necessary to rely on that. I would order that the application for an interim order for costs contained in paragraphs 1 to 4 of the Notice for Specific Directions filed by the plaintiff on 16 January 2006 be referred back to the Master with a direction that the Master hear and determine the application on the merits on the basis that it is an application which the Court has power to determine in the plaintiff’s favour. BESANKO J: This is an application referred to this Court by a Master pursuant to the power contained in r 106.04 of the Supreme Court Rules 1987 (“SCR”). That rule relevantly provides:(1)A Master may refer any summons or application to a single Judge or to the Full Court and the Full Court or the Judge may either dispose of the matter or refer it back to the Master with such directions as it or he may think fit.The application was made by a notice for specific directions issued by the plaintiff to an action in this Court. The action is not yet ready for trial. The orders sought by the plaintiff The orders sought by the plaintiff that are relevant to the reference to this Court are as follows:1.That pursuant to Section 40 (1) of the Supreme Court Act, the First Respondent will provide payment into the trust account of the Plaintiff’s solicitors in the sum of $80,000 for the provision of costs of the Plaintiff in this proceeding.2.That the payment referred to in Order 1 above be paid by way of cash or bank cheque made payable to Lesley Hastwell & Associates Trust Account.3.That the payment referred to in Order 1 above be made no later than 14 days after the date of this order.4.That the payment referred to in Order 1 above be kept separate in the said trust account and those funds be used only for the payment of accounting fees of Edwards Marshall, the professional fees of Mr Colin Pitchfork, coin valuer, and the professional fees of licensed real property valuers, and any other proper legal disbursements and fees.