Pearce v Gomez & Anor

[2010] HCATrans 274

[2010] HCATrans 274

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Perth  No P13 of 2010

B e t w e e n -

MAURICE ROBERT PEARCE

Applicant

and

PATRICIA GOMEZ

First Respondent

ANDREW BIRCH

Second Respondent

Application for special leave to appeal

GUMMOW J
CRENNAN J

TRANSCRIPT OF PROCEEDINGS

AT PERTH ON THURSDAY, 21 OCTOBER 2010, AT 10.12 AM

Copyright in the High Court of Australia

MS M.T. BATEMAN:   May it please the Court, I appear for the applicant.  (instructed by Westmont Legal)

MR R.S. HOOPER:   May it please the Court, I appear for the second respondent.  (instructed by Marks & Sands Barristers & Solicitors)

GUMMOW J:   Thank you.

MS BATEMAN:   Your Honour, the application for special leave is based on a number of bases, particularly the second respondent in the trial sought to pursue its claims by virtue of the accrued jurisdiction of the Family Court and the applicant here submits that the issue of the scope of accrued jurisdiction in the Family Court is one of public importance, most particularly because of the way it was dealt with ‑ ‑ ‑

GUMMOW J:   Why is it any different to any other Federal Court, and why is it not settled by a whole series of decisions culminating in Wakim?

MS BATEMAN:   Your Honour, in my submission, the reason why it is different is that the Family Court - and most particularly with respect to property settlement proceedings in the Family Court are peculiar in that that peculiarity is referred to by the Full Bench of Family Court in these particular proceedings in that what they are really indicating is that because the first step in the property settlement proceeding is to determine the pool of the assets of the parties then that really creates a circumstance where if what is indicated in the Full Bench decision is continued or followed then it creates an extremely broad scope, far broader than was anticipated or has been determined thus far in the federal courts.

GUMMOW J:   Why?

MS BATEMAN:   The reason, your Honour, is it can be seen in Justice Coleman’s determination because effectively what has been determined in these proceedings is that where it ever has to be determined whether there is an asset or a liability then there would be accrued jurisdiction even if, for example, in these particular proceedings, a liability of a third party, then in accordance with Justice Coleman and adopted by the two other judges in the majority, as indicated at paragraph 63 of the judgment, in the latter part of that paragraph ‑ ‑ ‑

GUMMOW J:   Paragraph 63?

MS BATEMAN:   Paragraph 63 of the judgment of the Full Bench.

GUMMOW J:   This is another problem.  It is not clear the extent to which this dispute was actually on the table, as it were, either at first instance or in the Full Court.

MS BATEMAN:   The accrued jurisdiction issue, your Honour?

GUMMOW J:   Yes.

MS BATEMAN:   Yes.  The accrued jurisdiction issue was on the table in the trial and it was indicated at trial by the second respondent that that was the jurisdiction which they were relying upon - in fact, Biltoft and the accrued jurisdiction.  It indicated that it was one and the same thing, although, in my submission, that causes another reason why perhaps this is a matter which is not now settled in relation to the Family Court because the majority decision in this particular case takes issue and distinguishes itself from Justice Coleman’s decision in respect, most particularly, of Justice Coleman’s decision about the application of Biltoft in that the majority decision determined, if I can take your Honour to the latter part of the judgment, that the judges were of the view that Biltoft – it is at paragraph 103 of the decision, is:

directed to the questions of the right to, and the prospect of, recovery by creditors of their debts, not to the proof of those debts, against one or other or both of the parties to the marriage, where liability is in issue -

rather than where a party asserts a liability, which is the case in this particular situation, where the liability was asserted and it was to be determined by the court.  The majority – that is Justices Warnick and Boland – determined that that could only fall within the accrued jurisdiction.  In my submission, that particular aspect is correctly decided by Justices Warnick and Boland, although their application then of the accrued jurisdiction was incorrect, in my submission.

However, it is inconsistent with Justice Coleman’s determination in respect of it and in fact Justice Coleman then went through a large number of potential bases of heads of jurisdiction that the Family Court may have had access to in respect of these proceedings, although did not make any determination in respect of any of them apart from, in respect of the accrued jurisdiction, really determining that where the respondent to that assertion that there is accrued jurisdiction stays silent, then that the accrued jurisdiction was there.  In my submission, that is an incorrect determination as well.

GUMMOW J:   What do you say as to the submissions against you on page 79 at paragraphs 23 to 26 as to the involvement of the liquidator and 27 on page 80?

MS BATEMAN:   In my submission, this is where the court did fall into error and that if it is the case that the Family Court has jurisdiction to determine any liability and because there are generally a very large number of liabilities associated with parties to Family Court proceedings ‑ ‑ ‑

GUMMOW J:   In the nature of things there will be a lot of small business people, to use that expression - they run their business in that way and then they get involved in a matrimonial cause and there has to be a property settlement.  Now, it is manifestly convenient that all this be done in the one court at the one time, so far as possible, to save expense and delay.

MS BATEMAN:   That is true to some extent, your Honour, except to say that the Family Court is a specialist court; it is not a ‑ ‑ ‑

GUMMOW J:   You used this word “specialist”.  It has whatever federal jurisdiction the Parliament has given it and if the Parliament gives it federal jurisdiction with respect to matters, that word “matter” has all the freight that is carried from Chapter III in the decisions of this Court construing Chapter III.

MS BATEMAN:   Yes, your Honour.  Your Honour, in my submission, it gets down to the interpretation of the single justiciable controversy and the severability and that this was not a part of a single justiciable controversy and this was entirely severable, and accordingly, the accrued jurisdiction was not invoked.  Although the Family Court has accrued jurisdiction, it was not invoked in these particular circumstances because of that lack of severability and that it was not a part of a single justiciable controversy in that it was simply a debt which had nothing really otherwise to do with the matter which was being litigated between the parties in the Family Court proceedings.

Your Honours, it is a case where the Family Court, when making its determination under section 79, as was indicated in the trial judge’s judgment and also indicated again in the Full Bench’s judgment, that there is a four‑step process, but in that four‑step process it really is a fifth step that is taken to make orders in relation to a third party because the four steps encompass determining the pool and that can be done without there being this further order being made in respect of a third party.

Also, as is indicated in Justice Coleman’s judgment, the Family Court for a very long time has had a capacity to indemnify parties, so it may well be that they are aware of some other liability that will perhaps crystallise at some later date, which is the way in which this liability could be characterised, and there could be indemnities in respect of each of the parties in respect of that liability.  So in my submission in response to those arguments, it simply does not meet that ‑ ‑ ‑

GUMMOW J:   What do you say as to paragraph 48 on page 42 of the Full Court’s reasons?  They said they were only embarking on this “for more abundant caution”.

MS BATEMAN:   Paragraph 48, your Honour?

GUMMOW J:   Yes, on page 42.

MS BATEMAN:   I did not quite catch your Honour’s question in respect ‑ ‑ ‑

GUMMOW J:   They said they were embarking on this debate only “for more abundant caution”.

MS BATEMAN:   Yes, that is right, your Honour.  In my submission, what has happened there ‑ ‑ ‑

GUMMOW J:   How does that make this an appropriate case to come here?

MS BATEMAN:   Well, your Honour, in my submission, what has happened in doing that is that the court has misunderstood the steps that need to be gone through in order to determine whether the accrued jurisdiction has in fact been invoked in the Family Court in the first place.  What it is really saying there is it accepts ‑ ‑ ‑

GUMMOW J:   When you say “accrued jurisdiction invoked”, what are you meaning?  There is a particular section in the Family Law Act which is similar to section 32 of the Federal Court Act which talks about associated matters.  That is a separate matter; that is a separate grant of accrued jurisdiction.  Accrued jurisdiction is there because of the matter.

MS BATEMAN:   Your Honour, my submission is that the Family Court has accrued jurisdiction.  That is clear ‑ ‑ ‑

GUMMOW J:   Well, it has to.

MS BATEMAN:   It is clear and there is no argument about that in that it will be decided that that was the case and it just is the case ‑ ‑ ‑

CRENNAN J:   You would accept that under section 79 a third party may intervene?

MS BATEMAN:   Yes, that right.  That question itself raises a couple of other questions.  Once the party has intervened then is that the critical point at that point where the determination about whether the court has accrued jurisdiction in respect of that issue is raised, or whether that issue of accrued jurisdiction needs to be run and determined at the trial stage?  In my submission, your Honour, in respect of paragraph 48, it is indicated there in the first sentence:

Counsel for the husband fairly conceded that the jurisdictional issues now sought to be agitated –

I apologise, it is the wrong one; it is one which indicates that it was indicated before the Full Bench that accrued jurisdiction exists in the Family Court, and there is no issue taken with that.  His Honour Justice Coleman then says:

However, for more abundant caution, the question of jurisdiction shall be considered.

Your Honour, then, in my submission, what happens then is that the court falls into error because what they do is they meld two parts of the inquiry, or rather the steps that need to be undertaken to exercise accrued jurisdiction into one, in that the two steps are that in accordance with the decisions that have dealt with the Federal Court jurisdiction and then have been adopted by Warby into the Family Court jurisdiction are that one, what the court needs to do is to determine, okay, has it actually been invoked in this particular case, and in determining whether that has in fact been invoked in this particular case it needs to go through each of those indicia of whether accrued jurisdiction has been invoked.

One of those indicia is the single justiciable controversy and the lack of severability.  In my submission, those things just were not done by the trial judge and those things were mistaken to have been matters which were then discretionary ‑ ‑ ‑

CRENNAN J:   I suppose in fairness to the trial judge those matters were not agitated.

MS BATEMAN:   They were raised by the second respondent as the basis for the jurisdiction to get the order that they sought and, in my submission, in those circumstances, accrued jurisdiction, once raised, does not simply mean the court can simply exercise jurisdiction in relation to whatever it is that is being claimed, which is otherwise the result.

CRENNAN J:   I really meant to convey that the husband had not raised those issues.

MS BATEMAN:   That is correct, however, in my submission, in respect of that, if it is raised that there is accrued jurisdiction in respect of something that is not enough for accrued jurisdiction to in fact be invoked in the Family Court.  The court is required, as a jurisdictional matter, to make that inquiry.  By law they have accrued jurisdiction, but it is not a case that it is invoked in every particular matter, in my submission, along the lines of the Federal Court decisions in respect of accrued jurisdiction.  Then if it is invoked once it is determined, okay, this is in fact a single justiciable controversy, it is not severable, then the court turns their mind to shall we exercise our discretion to exercise the accrued jurisdiction?

In my submission, that is the process that was set down in the Federal Court in respect of the Federal Court and adopted in Warby in respect of the Family Court and, in my submission, that is not what has occurred here.  What has occurred here is that they have simply melded those two together and said really considering each of those issues about those indicia, that is a discretionary matter.

In my submission, that is not a discretionary matter.  They are two quite distinct steps and, in my submission, the reason – coming back to your original question, your Honour – why this matter should get special leave is that if it is left in this state – the Full Bench’s decision in this state, it really means that the Family Court will be going off on a tangent of its own in the way in which it exercises jurisdiction.  It is a broadening of the scope of jurisdiction, much broader than was anticipated or provided for by way of the determinations in respect of the Federal Court and it is not surprising, your Honour, that this occur, in my submission, because of this broad ambit under section 79. 

There are some other aspects, your Honours, and that is resolving the differences of opinions, in my submission, between the Federal Court and the Family Court in the way in which they deal with it.  That is the two‑step or the three‑step process.  The aspect of dealing with the whole of the matter - the accrued jurisdiction is basically bring the matter in to that particular jurisdiction and deal with the entirety of the matter and what the majority in this particular case has said is, “We do not think you could have dealt with this, the entirety of it, by virtue of the order that was made”, that is, that unlike Justice Coleman, the two other judges in this particular matter essentially were saying, “We do not think that that the second respondent should be issue estopped”.

In my submission, that that is a departure from accrued jurisdiction as well in that the idea of the accrued jurisdiction and the convenience of it is to bring the entire matter in and ultimately to be issue estopped.  There is also then resolving the differences of opinion within the court itself, your Honours, so in respect of that there are two matters; that is the way in which, dealing with the whole of the matter, and also the differences in opinion between the way in which – whether it be dealt with by way of Biltoft or accrued jurisdiction.

In my submission, there is basically a general confusion in the Family Court as to the operation of the various heads of jurisdiction that Justice Coleman did go through a large number of those heads, although did not really come to any determination about them except to say that because the applicant in these proceedings did not make any submissions about accrued jurisdiction, therefore accrued jurisdiction operated.  In my submission, that is just not correct.

There are also some fundamental factual errors that Justice Coleman made and they are in respect of a determination as to whether a debt was in fact due by Mr Pearce and Ms Gomez.  What Justice Coleman did which was in error, and was adopted by the two other judges, was that he has taken on board what was evidence about something that happened in 2002, or a later date, to the building of the house, that the building of the house was between 1998 and 1999 and Justice Coleman has relied on evidence concerning something that has happened in the 2000s about, in my submission, incorrectly.

GUMMOW J:   There is no appearance for the first respondent and you appear for the second respondent.  That is right, is it not, Mr Hooper?

MR HOOPER:   Yes, I do, your Honour.

GUMMOW J:   We do not need to hear you any further, Mr Hooper.

Having regard to the uncertain foundation presented to the Full Court of the Family Court for its consideration of jurisdictional questions, this is not an appropriate case for the consideration of such questions by this Court.  Special leave is refused with costs.

AT 10.33 AM THE MATTER WAS CONCLUDED