North v Peter North Superannuation Fund Pty Ltd - [2022] WASC 16

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION:   NORTH -v- PETER NORTH SUPERANNUATION FUND PTY LTD [2022] WASC 16
CORAM:   SMITH J
HEARD:   14 JANUARY 2022
DELIVERED          :   21 JANUARY 2022
FILE NO/S:   CIV 1618 of 2021
BETWEEN:   TAYLA EVANA NORTH
First Plaintiff
TRAVIS VAUGHN NORTH
Second Plaintiff
AND
PETER NORTH SUPERANNUATION FUND PTY LTD
First Defendant
ANNETTE STELLA NORTH
Second Defendant

Catchwords:

Cross-vesting jurisdiction - Application to remove proceedings to the Family Court of Western Australia - Proceedings related to proceedings pending in the Family Court - More appropriate and in the public interest proceedings be determined by the Family Court

Legislation:

Family Law Act 1975 (Cth)
Jurisdiction of Courts (Cross–vesting) Act 1987 (WA)
Rules of the Supreme Court 1971 (WA)

Result:

Proceedings transferred to the Family Court of Western Australia

Category: B

Representation:

Counsel:

First Plaintiff	:	B Hanbury
Second Plaintiff	:	B Hanbury
First Defendant	:	No appearance
Second Defendant	:	BW Ashdown

Solicitors:

First Plaintiff	:	Hale Legal
Second Plaintiff	:	Hale Legal
First Defendant	:	No appearance
Second Defendant	:	Culshaw Miller Lawyers

Cases referred to in decision:

Bankinvest AG v Seabrook (1988) 14 NSWLR 711
BHP Billiton Ltd v Schultz (2004) 221 CLR 400
Coley v Danae [2020] WASCA 13
Fell v Fell [2007] WASC 157
H v D [2012] WASC 291
Halvorson v Zahra (deceased) (No 3) [2005] FCWA 32
Mrowka v Format Finishing Pty Ltd [2009] WASCA 184
Sewell v Wilson [2010] WASCA 152

SMITH J:

1.0 The application and the result

The second defendant, Annette Stella North, applies for orders that Supreme Court proceedings be transferred to the Family Court of Western Australia (Family Court) pursuant to s 5(4) of the Jurisdiction of Courts (Cross‑vesting) Act 1987 (WA); or alternatively be stayed pending the determination of an outcome of Family Court of Western Australia proceedings PTW 3468 of 2017.
Both proceedings concern a dispute about entitlement to a death benefit paid by a superannuation fund.
For the reasons that follow, I am of the opinion that the Supreme Court proceedings should be transferred to the Family Court.

2.0 The relief sought by the plaintiffs in the Supreme Court proceedings and matters raised by the second defendant in her application in the Family Court of Western Australia

2.1 Background

The plaintiffs are the children and beneficiaries of the late Peter Eric North (Mr North), who prior to his death on 12 February 2020 was married to, but separated, from the second defendant. The second defendant and Mr North had commenced living together on 5 December 2004, and married on 6 November 2010. They separated on 11 July 2016.
The second defendant commenced property settlement proceedings in the Family Court in 2017 against Mr North. Mr North died (before the Family Court proceedings were finalised) on 12 February 2020.
Mr North established a self-managed superannuation fund known as the Peter North Superannuation Fund (Fund) by a deed dated 1 May 1997. The first defendant was incorporated on 26 October 2006. On incorporation of the first defendant, the second defendant was appointed a director and secretary, and Mr North was appointed a director. On 22 November 2006, the first defendant was appointed trustee of the Fund.
The life of Mr North was insured by two insurance policies: an MLC Life Insurance Policy (policy number 8616754T); and an AIA Life Insurance Policy (policy number 16784364).
Whilst the second defendant and Mr North were married and prior to separating:
(a)by a deed dated 30 October 2013, the terms and governing rules of the Fund were varied by the replacement of the former terms and rules in their entirety;[1]
(b)on 7 May 2013, the second defendant made a binding death benefit nomination in favour of Mr North; and
(c)on 4 August 2014, Mr North made a non-lapsing binding death benefit nomination directing that the death benefit payable by the trustee of the Fund be applied or paid in shares of equal value before any tax is deducted to the second defendant and each of the plaintiffs.
[1] Affidavit of Yong Sheng Wee affirmed 5 July 2021, Annexure YSW-5, 91 - 166.
After the commencement of the Family Court proceedings, Mr North and the second defendant each separately executed binding death benefit nomination forms as follows:
(a)on 12 June 2018, the second defendant executed a death benefit nomination form in which she nominated her children as her beneficiaries in equal shares;[2]
(b)on 3 September 2018, Mr North executed a binding death benefit nomination form in which he nominated the plaintiffs as his beneficiaries in equal shares;[3] and
(c)on 14 January 2021 (after Mr North's death) the second defendant executed a death benefit nomination form in which she nominated her children as her beneficiaries in equal shares.[4]
[2] Affidavit of Yong Sheng Wee affirmed 20 September 2021, Annexure YSW-32, 96 - 97.
[3] Affidavit of Yong Sheng Wee affirmed 5 July 2021, Annexure YSW-19, 331 - 332.
[4] Affidavit of Yong Sheng Wee affirmed 20 September 2021, Annexure YSW-33, 98 - 99.
On 12 February 2021, MLC Limited paid the sum of $1,124,444 to the first defendant's bank account (MLC death benefit), and on 30 July 2021, AIA paid the sum of $60,000 to the first defendant's bank account.[5]

2.2 The Family Court of Western Australia and Supreme Court proceedings

2.2.2 The Family Court proceedings

2.2.2.1 Interim orders sought by the second defendant

[5] The AIA payment was made to the first defendant's bank account after the Supreme Court proceedings were commenced.

In an amended initiating application filed in the Family Court on 26 July 2021, the second defendant sought a number of interim orders which included an order that the plaintiffs in their personal capacities be joined as respondents in the Family Court proceedings, and that until further order, an injunction be granted restraining them from prosecuting the Supreme Court proceedings against the Fund.[6]
[6] Affidavit Annette Stella North sworn 14 October 2020, Annexure AN 1, 39 - 40.
On 6 August 2021 in an ex parte hearing before a registrar in the Family Court proceedings, the plaintiffs were joined in their personal capacities as parties and an order was made, until further order, restraining the plaintiffs from prosecuting the Supreme Court proceedings against the Fund, and 'the said proceedings' otherwise be transferred to the Family Court.[7]
[7] Affidavit Annette Stella North sworn 14 October 2020, Annexure AN 4, 43 - 44.
On 2 September 2021, Moncrieff J discharged these orders, and Alison Rebelo was substituted for the plaintiffs as the legal personal representative for the deceased.[8] It appears from the transcript of the hearing before his Honour that the reasons why the orders were set aside were that his Honour found:
(a)the orders should not have been made ex parte (in breach of the rules of procedural fairness)[9]; and
(b)any stay application of the Supreme Court proceedings and any application to transfer the Supreme Court proceedings should have been made to and determined by the Supreme Court.[10]
[8] Affidavit Annette Stella North sworn 14 October 2020, Annexure AN 5, 45.
[9] Second Supplementary Affidavit of Yong Sheng Wee affirmed 26 October 2021, Annexure YSW-42, 130.
[10] Second Supplementary Affidavit of Yong Sheng Wee affirmed 26 October 2021, Annexure YSW-42, 135 ‑ 137.
However, on 14 December 2021, Moncrieff J in effect set aside all of the orders that he had made on 2 September 2021,[11] except for the order discharging the stay of the Supreme Court proceedings, and made a further order staying the Family Court proceedings, pending further order and/or the resolution of proceedings in the Supreme Court.

2.2.2.2 Final orders sought by the second defendant filed on 24 May 2021

[11] Consequently, the effect of these orders appears to be the plaintiffs were reinstated as parties in their individual capacity as parties to the Family Court proceedings.

The second defendant's amended initiating application in the Family Court seeks final orders in respect of the treatment of the MLC death benefit. In summary, the orders sought are as follows:[12]
(a)pursuant to s 78 of the Family Law Act 1975 (Cth), a declaration that the MLC death benefit in the sum of $1,124,444 and accrued interest is property of the parties to the marriage; and if deemed necessary, a declaration that the 2018 binding death nomination executed by Mr North on 3 September 2018 is invalid;
(b)requiring the payment of the death benefit in the sum of $1,124,444 and accrued interest be applied in repayment of specified matrimonial debts (being mortgages) and payment of any costs orders assessed in favour of the second defendant, and the apportionment of the interests in the remaining balance in equal thirds to the second defendant and each of the plaintiffs; and
(c)in the alternative, in the event that the court is not prepared to make the declarations (sought in (a)), an order pursuant to s 106B of the Family Law Act that the 2018 death benefit nomination be set aside, and consequential orders sought in (b) be made.

2.2.3 The Supreme Court proceedings

[12] Affidavit Annette Stella North sworn 14 October 2020, Annexure AN 1, 41 - 42.

The plaintiffs instituted the Supreme Court proceedings on 5 July 2021, by way of an originating summons, pursuant to O 58 of the Rules of the Supreme Court 1971 (WA) seeking:[13]
1.A declaration that the insurance death benefit paid by MLC Limited (ABN 90 000 000 402) on 12 February 2021 in the sum of $1,124,444.00 (the Death Benefit) into the [First] Defendant's bank account (BSB: 610-101 Acc. No.: 071426235) is payable to the Plaintiffs and is not an asset of the [First] Defendant.
2.An order that the Death Benefit amount be paid by the [First] Defendant to the Plaintiffs.
[13] Subsequent to the filing of the originating summons - appearance required on 5 July 2021; the second defendant was made a party to the proceedings.
The plaintiffs claim they are entitled to the death benefit paid by MLC because the 2018 binding death benefit nomination nominates each of the plaintiffs to receive a 50% proportion of the benefit.

3.0 Legal principles - transfer of proceedings from the Supreme Court to The Family Court of Western Australia

Section 5(4) of the Jurisdiction of Courts(Cross-vesting) Act provides:
(4)Where ‑
(a)a proceeding (in this subsection referred to as the relevant proceeding) is pending in the Supreme Court or the State 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 other of the courts referred to in paragraph (a) and it is more appropriate that the relevant proceeding be determined by that other court;
(ii)having regard to ‑
(A)whether, in the opinion of the first court, apart from this Act and any law of the Commonwealth or another State relating to cross-vesting of jurisdiction, the relevant proceeding or a substantial part of the relevant proceeding would have been incapable of being instituted in the first court and capable of being instituted in that other court; and
(B) the interests of justice,
it is more appropriate that the relevant proceeding be determined by that other court; or
(iii)it is otherwise in the interests of justice that the relevant proceeding be determined by that other court,
the first court shall transfer the relevant proceeding to that other court.
Section 5(4)(b) provides three alternative paths to the grant of a transfer of proceedings pending in this court to the Family Court.[14]
[14] Fell v Fell[2007] WASC 157 [1] ‑ [3] (Beech J).
In this matter, the preconditions for the exercise of the power to transfer proceedings are relevantly s 5(4)(a) and either s 5(4)(b)(i) or s 5(4)(b)(iii).
In considering whether the preconditions for transfer are met in this matter, the first precondition in s 5(4)(b)(i) that must be met is whether the Supreme Court proceedings are 'related' to the Family Court proceedings.
A direct relationship need not arise between the two set of proceedings for the proceedings to be related. In H v D, Pritchard J observed:[15]
The authorities do not suggest that a direct relationship between the two sets of proceedings is required. The expression 'related to' should be given a wide, rather than a restricted, meaning: Seymour v Devine and Ors[9] (Pullin J, citing Carey v Carey(Unreported, SCt of WA, Lib No 8307, 14 June 1990 (Franklyn J)).
The term 'related' means 'associated' or 'connected' and in order to be 'related' there needs to be some nexus or association between the two sets of proceedings in order that the conclusion can be drawn that they are related: Fell v John Fell [2007] WASC 157 [12] (Beech J); Armstrong v Armstrong [2004] WASC 121 [52] (Barker J); Re Hamilton-Irvine and the Companies Act 1985 (1990) 94 ALR 428, 432 ‑ 433 (Beaumont J); Leithead v Leithead (1991) 109 FLR 177 and Hoddell v Hoddell Pty Ltd [1999] WASC 156 [21] (Murray J).

4.0 Disposition - Is it more appropriate that the Supreme Court proceeding be determined by the Family Court or is it otherwise in the interests of justice to transfer the proceedings?

[15] H v D [2012] WASC 291 [31] ‑ [32].

If either s 5(4)(b)(i) or s 5(4)(b)(iii) are met, then the court must order the transfer of the Supreme Court proceedings, and has no further discretion in the matter.[16]
[16] BHP Billiton Ltd v Schultz (2004) 221 CLR 400 [14] (Gleeson CJ, McHugh & Heydon JJ) [62] (Gummow J) (Hayne J agreeing), [222] (Callinan J); Mrowka v Format Finishing Pty Ltd [2009] WASCA 184 [106] (Buss JA).
In some matters, the determination as to whether two sets of proceedings are associated or connected (that is, whether there is a nexus or association between the two proceedings) may be difficult to discern if the association or connection between the proceedings is tenuous or the strands connecting them are remote. This is not the case in this matter.
The factual connection between the Supreme Court and Family Court proceedings exists to an overwhelmingly sufficient degree that it must necessarily follow that the two sets of proceedings are related. This is not only because the plaintiffs and the second defendant are parties to both proceedings, but the subject matter of the Supreme Court proceedings forms a significant part of the subject matter of the Family Court proceedings, and there is a significant overlap between the issues raised in both sets of proceedings.
In the Supreme Court proceedings, the plaintiffs seek a declaration that they are equally entitled to the entire MLC death benefit pursuant to the effect of the 2018 binding death benefit nomination, and in the Family Court proceedings, the second defendant claims that the 2018 nomination is invalid, or alternatively should be set aside.
Under Part VIIIB of the Family Law Act, the Family Court may make orders adjusting superannuation entitlements of parties to a marriage. In this context, superannuation interests are to be treated as property for the purposes of the definition of 'matrimonial causes' under that Act, and the Family Court is able to take account of superannuation interests as 'property' and make orders affecting that 'property' under s 79 of the Family Law Act.[17]
[17] Coley v Danae [2020] WASCA 13 [134] - [135] citing Family Law Act 1975 (Cth) s 90XC.
Consequently, the first precondition in s 5(4)(b)(i) is met. That is, the Supreme Court proceedings are related to the proceedings that are pending in the Family Court.
Turning to the second precondition in s 5(4)(b)(i), that is whether it is more appropriate that the Supreme Court proceedings be determined by the Family Court, I have also considered at the same time whether it is in the interests of justice that the Supreme Court proceedings be determined by the Family Court (the third precondition, and the alternative to the second). This is because the questions of whether it is more appropriate that the Supreme Court proceedings be determined by the Family Court and whether it is in the interests of justice that the proceedings be determined by the Family Court are closely aligned concepts.[18]
[18] H v D [2012] WASC 291 [37] (Pritchard J), citing Fell v Fell [2007] WASC 157 [12] (Beech J) and BHP Billiton Ltd v Schultz (2004) 221 CLR 400 [14] (Gleeson CJ, McHugh & Heydon JJ).
To determine whether the second precondition is met, the court must engage in an evaluative judgment of all of the circumstances of the particular case.[19] Where the interests of justice lie and which court is more appropriate will depend upon an analysis of all the circumstances of each case.[20]
[19] Fell v Fell [2007] WASC 157 [7] - [8] (Beech J); H v D [2012] WASC 291 [19] (Pritchard J).
[20] Fell v Fell [2007] WASC 157 [17] (Beech J).
What is involved is a 'nuts and bolts' management decision as to which court, in the pursuit of the interests of justice, is the more appropriate to deal with the Supreme Court proceedings.[21]
[21] BHP Billiton Ltd v Schultz (2004) 221 CLR 400 [13] (Gleeson CJ, McHugh & Heydon JJ, citing Bankinvest AG v Seabrook (1988) 14 NSWLR 711, 713 ‑ 714 (Street CJ).
Although the plaintiffs claim that the Family Court has no jurisdiction to make the declaration that they seek in the Supreme Court proceedings, this submission is misconceived.
Pursuant to s 78(1) of the Family Court Act, the Family Court has power in proceedings between the parties to a marriage with respect to existing title or rights in respect of property, to declare the title rights, if any, that a party has in respect of the property. Further, pursuant to s 78(2), the Family Court may make consequential orders to give effect to a declaration.
Further, the Family Court has the power, pursuant to s 79(8) of the Family Law Act, to determine whether the 2018 binding death benefit nomination should be set aside, and if so, whether second defendant should be paid the amounts she claims of the proceeds of the MLC death benefit.[22]
[22] Halvorson v Zahra (deceased) (No 3) [2005] FCWA 32.
If the second defendants claim to set aside the 2018 death benefit nomination in the Family Court or her claims otherwise that she is entitled to the portions of the death benefit fails, it should necessarily follow on the matters presently pleaded in the Family Court proceedings and on the material filed in support of and in opposition to the application to transfer, that the plaintiffs would not be prohibited from putting an argument to the Family Court that they are each entitled to the proceeds in the proportion that they claim in the Supreme Court proceedings, and that orders to that effect should be made by the Family Court.
In any event, if the Supreme Court proceedings are transferred, then the jurisdiction of the Supreme Court to hear and determine the plaintiffs' claim is transferred with the proceedings. This is the effect of s 4(6) of the Jurisdiction of Courts (Cross-vesting) Act, which provides that if a proceeding is transferred from the Supreme Court to the State Family Court, the State Family Court has jurisdiction with respect to so many of the matters for determination in the proceeding as that court would not have had apart from this subsection. In addition, pursuant to s 9 of the Jurisdiction of Courts (Cross-vesting) Act, the Family Court may exercise jurisdiction conferred on that court by provision of that Act, and may hear and determine a proceeding transferred to the Family Court under such a provision.[23]
[23] Mrowka v Format Finishing Pty Ltd [2009] WASCA 184 [107] (Buss JA).

If the proceedings instituted by the plaintiffs in this court were to be heard and determined, and a declaration made that the plaintiffs were entitled to the distribution of 50% each of the proceeds of the MLC death benefit (pursuant to the effect of the 2018 binding death benefit nomination) prior to the proceedings in the Family Court being heard and determined, the proceedings in the Family Court would not be brought to an end. This could lead to two inconsistent judgments being delivered by this court and the Family Court.
This is because of the operative effect of s 90AC of the Family Law Act, which provides that Part VIIIAA has effect despite anything to the contrary in any other law (whether written or unwritten) of a State or anything in the trust deed or other instrument, and s 90XB, which provides for the splitting of payments in respect of a superannuation interest of a spouse.
For these reasons, it is more appropriate that the Supreme Court proceedings be determined by the Family Court. The critical issue in the Supreme Court proceedings is the effect of the 2018 binding death benefit nomination, and this is an issue raised in the Family Court proceedings. However, it is only the Family Court which can exercise the power conferred by s 106B or s 90XB of the Family Law Act, to declare the 2018 nomination as invalid or otherwise set it aside. Thus, the Family Court has the power to resolve all the matters in issue in both proceedings concerning the validity and enforceability of the 2018 nomination, and if appropriate, it may make orders setting aside of the 2018 nomination.
For these reasons also, it is in the public interest that the Supreme Court proceedings be transferred to the Family Court.
I note, however, although it was not raised by either party in the hearing of this application, that insofar as the second defendant seeks in the Family Court proceedings a declaration that the MLC death benefit proceeds are property of the parties to the marriage, this could be said to raise a matter within the exclusive jurisdiction of the Family Court, which raises the operative effect of s 8(1) of the Family Law Act. Section 8(1) prohibits the institution of proceedings by way of a 'matrimonial cause' except in the Family Court, which could have the effect of ousting the jurisdiction of this court to determine the plaintiffs' claim in the Supreme Court proceedings.[24] However, I do not find it necessary in this matter to consider this issue or express any view in respect of this issue. This is because it is clear that the preconditions requiring this court to transfer the Supreme Court proceedings to the Family Court have been met.
[24] See Sewell v Wilson [2010] WASCA 152 [31] - [34] (Newnes JA) (Buss and Murphy JJA agreed); Mrowka v Format Finishing Pty Ltd [2009] WASCA 184 [61] - [65] (Owen JA) (Pullin and Buss JJA agreed).
For these reasons I will make an order that pursuant to s 5(4) of the Jurisdiction of Courts (Cross-vesting) Act, the proceedings in CIV 1618 of 2021 be transferred to the Family Court of Western Australia.
I will hear the parties further as to the orders that should made as to costs.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
EC
Associate to the Honourable Justice Smith
21 JANUARY 2022