Olmos and Radev

[2018] FCCA 2294

FEDERAL CIRCUIT COURT OF AUSTRALIA

OLMOS & RADEV [2018] FCCA 2294

Catchwords:
FAMILY LAW – Property proceedings – proceedings transferred to the Family Court of Australia – order made.

Legislation:

Federal Circuit Court of Australia Act 1999, s.39
Federal Circuit Court Rules 2001, Rule 8.02

Cases cited:

Morris & Rosetti [2017] FamCA 249

Applicant: MR OLMOS

Respondent: MS RADEV

File Number: PAC 843 of 2015

Judgment of: Judge Newbrun

Hearing date: 1 August 2018

Date of Last Submission:	3 August 2018
Delivered at:	Parramatta

Delivered on: 22 August 2018

REPRESENTATION

Counsel for the Applicant: Mr Fowler

Solicitors for the Applicant: Mcintosh Mcphillamy & Co Legal Services

Counsel for the Respondent: Mr Wong

Solicitors for the Respondent: Watts Mccray

ORDERS

1. These property and parenting proceedings, and all extant applications, are forthwith transferred to the Family Court of Australia at Parramatta, and listed for directions on 11 September 2018 at 9:30 am.

2. By consent, that the Applicant to the Application in a Case filed on 30 July 2018 file and serve on the Respondent Points of Claim summarising the relief sought by the Applicant and the facts relied upon by the Applicant in support of that relief by 5pm on 31 August 2018, in relation to the Applicant's contention that she and the Respondent are entitled to an equitable claim in the property at Property A, which is legally owned by Company A Pty Limited as Trustee of the Trust No. 2 with the Respondent to the Application in a Case to file and serve his Points of Defence on or before 28 days after service of the Points of Claim.

3. By consent, the Court notes that it is the application of the Applicant to the Application in a Case filed on 30 July 2018 to transfer these proceedings to the Family Court of Australia and the Applicant estimates the required time for the Final Hearing to be five (5) days. The Respondent to the Application in a Case consents to the transfer based on the Applicant's estimate of time required by the Applicant to present her case and to cross-examine the Respondent's witnesses, noting the Applicant also contends complex questions of fact and law.

NOTATION

The Court refers to its written judgment in relation to the above transfer Order.

IT IS NOTED that publication of this judgment under the pseudonym Olmos & Radev is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT PARRAMATTA

PAC 843 of 2015

MR OLMOS

Applicant

And

MS RADEV

Respondent

REASONS FOR JUDGMENT

1. The within Reasons for Judgment relate to the application made by the Respondent wife on 1 August 2018 that these parenting and property proceedings be transferred to the Family Court of Australia. This application was consented to by the Applicant husband.

2. The wife’s application for transfer had also been sought in her Application in a Case filed 30 July 2018, returnable before the Court on 1 August 2018, in conjunction with a proposed interim parenting Order that the mother be permitted to relocate with the child [X] born 2010 to the Queensland/Region 1 Metropolitan area.  On 1 August 2018, the parties only sought an Order that these parenting and property proceedings, together with all extant applications, be forthwith transferred to the Family Court of Australia, as well as certain discrete directions in relation to the property proceedings.

3. The parties currently reside in Town A, albeit separated, with the subject child in the primary care of the wife and spending regular time with the husband.  The husband’s extended family are long-standing Town A farmers, spanning four generations, with substantial farming property interests.  The wife’s extended family reside in Sydney.  The wife now contends that her mental health is suffering by, inter alia, having to remain living in Town A close to the husband and his extended family where she feels isolated “and outnumbered”.

Written submissions

1. The Applicant wife has submitted written submissions in support of the application to transfer these proceedings to the Family Court of Australia.

2. Those submissions provide as follows:

   Mother’s Submissions in support of Application for Transfer to the Family Court of Australia

   1.On 30 July 2018, the Respondent Wife and Mother filed an Application in a Case (“the Application”) wherein, inter alia, she sought a transfer of these proceedings to the Family Court of Australia at Parramatta. This Application was supported by the following affidavits:

   a.an affidavit of Ms L, psychologist, filed on 30 July 2018; and

   b.      an affidavit by the Wife, filed on 30 July 2018.

   2.The Application and the proceedings generally, were returnable before the Court on 1 August 2018.

   3.In the Application the Wife sought, inter alia, a transfer of the proceedings to the Family Court of Australia at Parramatta. The Husband did not oppose the transfer and a handwritten minute of order was submitted on that day and by consent.

   4.The Wife tendered a draft balance sheet and a trial plan, which were marked exhibit “A”.

   5.In determining the said application for a transfer to the Family Court of Australia, the provisions of Section 39 of the Federal Circuit of Australia Act 1999 (“the Act”) and Rule 8.02 of the Court’s Rules (“the Rules”) must be considered. In addition, the Protocol of Transfers between the Courts must also be considered, which is set out at paragraphs 14 to 18 (inclusive) in the judgment of His Honour Justice Tree in Morris & Rosetti [2017] FamCA 249.

   6.The Wife argues that the applicable criteria, which pertain to the Protocol, are those enumerated as follows in paragraph 14 of the aforementioned judgment in Morris, namely:

   [7] Complex questions of jurisdiction and law;

   [8] If the matter proceeds to a final hearing, it is likely it would take in excess of      four days of hearing time.

   7.Having regard to Rule 8.02 of the Rules, the following applies to transfers “Unless the Court otherwise orders, a request for transfer must be made on or before the first Court date for the proceedings”.

   8.In this case, it is noted that the matter was commenced by way of parenting relief set out in the Father’s Initiating Application filed on 26 February 2015. The Mother responded in kind, by her Response filed on 17 April 2015. The matter has subsequently morphed into a property and parenting dispute, of some complexity.

   9.The parties have retained  Ms. Delbridge as the single expert valuer of a trust. The value of the trust and the Husband’s control of it are contentious. 

   10.In relation to parenting, there is an application by the Mother to relocate the child to Queensland with her. The parties and the child presently living in the Town A and Town B areas respectively. Mr. L prepared a Family Report on April 2016. 

   11.The complexity referred to in relation to property pertains, inter alia, to the following:

   a.Per the notes to the balance sheet, Ms. Delbridge provides a valuation report which considers 4 different scenarios. These scenarios are dependent upon the Court making findings as to whether various real properties should be included as asset of the trust: this is a question of mixed fact and law which necessarily involves considerations of equitable principles.

   b.There is a question as to the extent of the Husband’s control of and interest in the said trust and the trust assets, such as they may be: this is a question of mixed fact and law in relation to which the parties propose, in their minute of order, a timetable for service of points of claim and response to points of claim;

   c.There is a disputed loan alleged owing from the Husband to his parents, which again is a question of mixed fact and law in relation to which Commonwealth and State law apply.

   12.The complexity referred to in the parenting pertains, inter alia, to the following:

   a.The Wife’s psychologist gives evidence of the Wife suffering an Adjustment Disorder with Mixed Anxiety and Depressed Mood, Persistent (Chronic) DSM-5 code 309.28, where she notes that “the likelihood of her [the Mother’s] symptoms abating are very low should she remain in Town A”. Further, the Wife’s psychologist gives evidence of being “vicariously traumatized (sic) by the nature of her work”. Where the Wife gives evidence of attempting to obtain alternative employment relating to her field and being unsuccessful.

   b.The Wife files an application for an interim relocation of the Child;

   c.The Wife files an application for the appointment of Chapter 15 expert in order for the alleged mental health impacts of the status quo being considered.

   13.Further, the Wife tendered a trial plan in relation to the conduct of a final trial. It is estimated that:

   a.The Wife will have 4 lay witnesses which will take 1.5 days to cross-examine;

   b.The Husband will have 4 lay witnesses, including the trustees (his parents), which will take 2 days to cross-examine;

   c.The cross-examination of the expert, whether Mr. L or a Chapter 15 expert, would take ½ a day;

   d.The cross-examination of Ms. Delbridge would take up to a ½ day, should she be required;

   e.The submissions would take at least ½ day.

   14.The above trial plan amounts to 5 days, not including objections on and the regular preliminary arguments made by the trial judge regarding, inter alia, the joint balance sheet. The trial plan exceeds 4 days and thus, on its own, meets one of the criteria in the aforementioned protocol.

   15.The Court may also wish to take into account its resources, per s.39(4)(c) of the Act, and the likelihood that the Family Court of Australia, which is the Court charged with complex matters, may be able to deal with the matter more efficiently.

   16.Having regard to the foregoing, it is submitted that the proposed transfer is indicated.

Further material relied upon

1. The parties, in further support of the application to transfer these parenting and property proceedings to the Family Court of Australia, relied upon and tendered the following documents:

   a)Exhibit A: draft Trial Plan and Balance Sheet;

   b)Exhibit B: proposed consent order for a transfer of the parenting and property proceedings to the Family Court of Australia, and particular directions for the property proceedings.

Issues in dispute

1. The issues presently in dispute appear to be at least as follows:

   a)Valuation of a family trust (Trust (No 2)) contended by the wife to be a financial resource utilised by the husband during the relationship (see in particular paragraphs 85, 86 and 87 of the wife’s Affidavit filed 30 July 2018). 

   In this context, the Court refers to the Applicant wife’s written submission, paragraph 11 in particular, inter alia, referring to a Chapter 15 Expert Report of a valuer Ms S Delbridge dated 20 February 2018, and Note 41 to the draft balance sheet, referring to four differing scenarios. 

   Further, the Court refers in this context to the draft balance sheet, items 13 (a loan account of the said trust) and item 34 (a loan account of the said trust). 

   Inter alia, the wife’s written submissions refer to the complexity of contentious issues between the parties relating to valuation of the above trust, including whether various real properties should be included as assets of the trust; further, there is a contentious issue between the parties as to the extent of the husband’s control of an interest in the said trust and the trust assets.

   b)The wife contends that the parties are entitled to an equitable claim in the property at Property A, which property is legally owned by Company A Pty Ltd as trustee of the above trust.

   c)Whether proper financial disclosure has been provided by the husband to the wife in relation to, inter alia, items in the balance sheet; see, for example, items 8 and 13 (disclosure in relation to a loan account of the said trust).

   d)Whether the wife should be permitted to relocate with the child to Queensland/Region 1.  In this context, there is significant disputation between the parties as to allegations made by the wife of harassment and ill will towards her by the husband and his extended family whilst residing and living in Town A.

   e)The nature and extent of the wife’s alleged adverse mental health.

   f)The date of separation.

   g)The nature and extent of the wife’s past work experience as a (occupation omitted).

   h)The nature and extent of the husband’s participation in the care of the child since birth.

   i)The parenting capacity of both parties. 

   j)The nature and extent of the husband’s extended family’s participation in the care of the child since birth.

   k)The nature and extent of any agreements between the parties historically relating to the child’s daycare. 

   l)The nature and extent of the husband’s financial support for the child.

   m)The views of the child in relation to spending time with the husband.

   n)Allegations of family violence made by the wife against the husband.

   o)The ability of the parties to communicate and cooperate in relation to the care of the child.

Relevant statutory provisions and principles

1. The Court refers to the decision of Tree J in Morris & Rosetti [2017] FamCA 249. His Honour sets out in that decision, in relation to transfers of proceedings between this Court and the Family Court of Australia, the relevant statutory provisions and principles, and refers to a Protocol, agreed to between the heads of jurisdiction of this Court and the Family Court of Australia, in relation to such transfers, as follows:

   14. The heads of jurisdiction of both Family Court and the Federal Circuit Court have agreed upon, and published, a protocol for the guidance as the appropriate court in which parties should commence proceedings. It provides as follows:

   If any one of the following criteria applies, then the application for final orders ordinarily should be filed and/or heard in the Family Court of Australia (“FCoA”), if judicial resources permit, otherwise the matter should be filed and/or heard in the Federal Magistrate Court (“FMC”).

   1. International child abduction.

   2. International relocation.

   3. Disputes as to whether a case should be heard in Australia.

   4. Special medical procedures (of the type such as gender reassignment and sterilisation).

   5. Contravention and related applications in parenting cases relating to orders which have been made in FCoA proceedings; which have reached a final stage of hearing or a judicial determination and which have been made within 12 months prior to filing.

   6. Serious allegations of sexual abuse of a child warranting transfer to the Magellan list or similar list where applicable, and serious allegations of physical abuse of a child or serious controlling family violence warranting the attention of a superior court.

   7. Complex questions of jurisdiction or law.

   8. If the matter proceeds to a final hearing, it is likely it would take in excess of four days of hearing time.

   Note: The FCoA has exclusive jurisdiction in relation to adoption and the validity of marriages and divorces.

   Transfers

   1. Either Court on its own motion or on application of a party can transfer a matter to the other Court.

   2. There is no right of appeal from a decision as to transfer.

   15. It is pertinent to make the following observations in relation to the protocol:

   ·    The protocol speaks about the appropriate court in which proceedings should be commenced. It does not speak, necessarily or directly, to the matters which might inform transfer by either court, although there may be an expectation that the matters enumerated in it would be relevant to the exercise of the discretion to transfer;

   ·    The language of the protocol admits of exception: for instance the direction that certain matters “ordinarily” should be filed in the Family Court, and the reference to “if judicial resources permit;”

   ·    Some of the criteria require a degree subjective interpretation, for instance, the reference to “serious” allegations of abuse, and “complex” questions of law. Necessarily, these are matters upon which reasonable minds may legitimately reach different conclusions;

   ·    Notwithstanding those observations, the intent of the protocol is to effect a relatively clear division of work between the two courts, with the Family Court undertaking work more suited to a superior court of record. Whilst terms such as “complex,” “difficult” or “complicated” might on occasion be used to try and describe that division, none are perfectly apt to describe the line of demarcation between the two courts work. That is because, particularly in children’s matters, there is almost always some degree of complexity, difficulty and complication involved in determining where the best interests of children lie.

   16. The other point which should be made about the protocol is that it is an agreement between the heads of both jurisdictions. As such, it cannot lawfully fetter the discretion of either court to transfer proceedings to the other: see for instance, Re W: Publication Application (1997) 137 FLR 205 at 240 per Finn J. In fairness to those who drafted the protocol, it does not, on a plain reading of its contents, seek to do so in any event. To cast that proposition slightly differently, a judicial officer who regarded the exercise of their discretion to transfer as being required to be in conformity with the protocol would be imposing an unlawful fetter. At most, the protocol is a potentially relevant consideration.

   RELEVANT STATUTORY PROVISIONS AND PRINCIPLES

   17. Section 39 of the Federal Circuit Court of Australia Act 1999 relevantly provides:

   (1) If a proceeding is pending in the Federal Circuit Court of Australia, the Federal Circuit Court of Australia may, by order, transfer the proceeding from the Federal Circuit Court of Australia to ... the Family Court.

   ...

   (4) In deciding whether to transfer a proceeding to the Family under subsection (1), the Federal Circuit of Australia must have regard to:

   (a)     any Rules of court made for the purposes of subsection 40(4);

   (b)     whether proceedings in respect of an associated matter are pending in the Family Court;

   (c) whether the resources of the Federal Circuit Court of Australia are sufficient to hear and determine the proceedings; and

   (d)     the interests of the administration of justice.

   ...

   18. Rule 8.02 of the Federal Circuit Court Rules provides as follows:

   (1) The Court may, at the request of a party or of its own motion, transfer a proceeding to the Federal Court or the Family Court.

   (2) Unless the Court otherwise orders, a request for transfer must be made on or before the first court date for the proceeding.

   (3) Unless the Court otherwise orders, the request must be included in a response or made by application supported by an affidavit.

   (4) In addition to the factors required to be considered by the Court under subsections 39(3) and (4) of the Act for transfer of proceedings to the Federal Court or the Family Court, the following factors are relevant:

   (a) whether the proceeding is likely to involve questions of general importance, such that it would be desirable for there to be a decision of the Federal Court or the Family Court on one or more of the points in issue;

   (b) whether, if the proceeding is transferred, it is likely to be heard and determined at less cost and more convenience to the parties than if the proceeding is not transferred;

   (c) whether the proceeding will be heard earlier in the Court;

   (d) the availability of particular procedures appropriate for the class of proceeding;

   (e) the wishes of the parties.

Discussion

1. These highly conflictual property and parenting proceedings are both complex and likely to take in excess of four final hearing days.

2. There is likely to be significant evidence, including cross-examination, in relation to all the above issues (under the heading, at the beginning of these Reasons, “Issues in Dispute”).  In passing, the Court observes that to date there are already at least five affidavits from the wife and at least four affidavits of the husband that have been filed and served.  Most of these affidavits are lengthy.  An affidavit has already been filed by the wife’s clinical psychologist and at least two affidavits from the wife’s lay witness Ms Forsyth.

3. There is a significant dispute in relation to the value of the above trust.  There is a further significant dispute between the parties as to the wife’s contention that the parties are entitled to an equitable claim in the property at Property A.  There are numerous items of property, including real estate, bank account funds, investments, business of the husband, add back issues, liability issues, that the parties are in disputation in relation to, as referred to in the draft balance sheet (Exhibit A).  There are significant financial disclosure issues to be determined.

4. The wife is proposing to have a further Expert Family Report prepared.

5. There is likely to be tendered in evidence extensive documentary evidence, particularly in relation to historical financial records, including in relation to the trust.

6. There is a significant prospect that complex accounting principles are likely to underpin expert evidence given by the valuer of the above family trust.

7. It will be necessary for the Court, at the final hearing of these proceedings, to hear the competing oral submissions of the parties, based upon the likely extensive evidence before the Court.

8. In the above circumstances, these proceedings will likely take more than four days of final hearing, and, in the view of the Court, having regard to the Protocol alone, the proceedings should be transferred.  Again the Court refers to the Trial Plan, Exhibit A, revealing a likely final hearing time of five days, without taking into account time needed by the Court for objections to affidavits and balance-sheet review.

9. Further, as to section 39(4)(c) of the Act, the resources of this Court are not sufficient to hear and determine the proceedings. There has been an interim parenting hearing in this Court to date; one interlocutory parenting judgment has been made by this Court. There is a significant prospect of there being further interlocutory proceedings relating to valuation evidence of the trust and other property of the parties, including their contended liabilities, and financial disclosure issues (see the draft balance-sheet, Exhibit A).

10. Further, as to section 39(4) of the Federal Circuit Court of Australia Act 1999 and Rule 8.02 of the Federal Circuit Court Rules 2001:

    ·The proceedings are likely to be heard and determined at less cost and more convenience to the parties than if the proceedings are not transferred; in this Court, there are likely to be significant waiting periods between the dates of directions hearings, and delays in appointing fixtures for interlocutory disputes, compared to the Family Court of Australia.  Further, in property proceedings of this nature, in particular involving significant disputes as to trust and business valuations, the Family Court of Australia has greater expertise.  This cost and convenience factor is particularly important in these proceedings, noting the present extant application by the wife to relocate to Queensland/Region 1 in light of her, inter alia, alleged parlous mental health caused, she contends, by remaining living in Town A close to the husband and his extended family;

    ·The final hearing of these proceedings is likely to be heard earlier in the Family Court of Australia than in this Court; combined parenting and property proceedings in this Court, once ready for final hearing (which this case is not), are likely to receive a final hearing date at least twelve months thereafter.

    ·The wife expressed a desire for the proceedings to be transferred to the Family Court of Australia, with the husband consenting to that course;

    ·These proceedings are complex, and the Court refers to its discussion above in these Reasons;

    ·Again, having regard to the issues to be determined between the parties, these proceedings are likely to take in excess of four final hearing days;

    ·The administration of justice is best served by transferring these proceedings, and the Court has regard to its discussions above.

11. The Court, in the exercise of its discretion, transfers these proceedings to the Family Court of Australia of its own motion, but notes, again, that on 1 August 2018 the wife sought a transfer which was not opposed by the husband. Had it been necessary, noting the manner in which these proceedings have progressed to date, the Court would have granted the wife leave to make that request out of time, noting the provisions of Rule 8.02(2).

I certify that the preceding nineteen (19) paragraphs are a true copy of the reasons for judgment of Judge Newbrun

Date: 22 August 2018