Pratten and McPherson

[2016] FamCA 775

FAMILY COURT OF AUSTRALIA

PRATTEN & MCPHERSON [2016] FamCA 775

FAMILY LAW – INJUNCTIONS – Anti-suit injunction – Where, in proceedings before this Court, the wife alleges the husband has a beneficial interest in real property – Where the second respondent maintained her legal and equitable interest in the property and denied the husband’s interest in it – Where the second respondent sought statutory relief in respect of the property in separate Supreme Court proceedings following her joinder to the spouses’ property settlement proceedings in this Court – Where the parties agree it is unsatisfactory for parallel proceedings to co-exist – Where the parties agree all aspects of the controversy could be determined to finality in either jurisdiction – Second respondent sought transfer of the property settlement proceedings to the Supreme Court under s 5(4) of the Jurisdiction of Courts (Cross-Vesting) Act 1987 (Cth) – Where application for transfer is dismissed – Where an anti-suit injunction restrains the second respondent from prosecuting the separate Supreme Court proceedings.

Conveyancing Act 1919 (NSW), s 66G
Judiciary Act 1903 (Cth), s 79
Jurisdiction of Courts (Cross-Vesting) Act 1987 (Cth), s 5
Family Law Act 1975 (Cth), ss 34, 78, 79, 80, 90AE, 90AF

Cole & Abati [2016] FamCAFC 78
CSR Ltd v Cigna Insurance Australia Ltd (1997) 189 CLR 345
Henry v Henry (1996) 185 CLR 571
Teo & Guan [2015] FamCAFC 94
Voth v Manildra Flour Mills Pty Ltd (1900) 171 CLR 538

APPLICANT: Ms Pratten

FIRST RESPONDENT: Mr McPherson

SECOND RESPONDENT: Mrs McPherson

FILE NUMBER: SYC 3588 of 2016

DATE DELIVERED: 7 September 2016

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGMENT OF: Austin J

HEARING DATE: 7 September 2016

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Watson & Ms Taylor

SOLICITOR FOR THE APPLICANT: Gayle Meredith & Associates

COUNSEL FOR THE 1^ST RESPONDENT: Not Applicable

SOLICITOR FOR THE 1^ST RESPONDENT: Mr Thompson, Newnhams Solicitors

COUNSEL FOR THE 2^ND RESPONDENT: Mr Skinner

SOLICITOR FOR THE 2^ND RESPONDENT: Fritchley Solicitors

Orders

1. Pending determination of these proceedings in the Family Court of Australia, the Second Respondent (Mrs McPherson) is restrained from taking any further steps to prosecute her claim for relief in proceedings bearing file number 2016/… in the Supreme Court of New South Wales (Equity Division) other than to:

   (a)      Discontinue those proceedings;

   (b)      Seek dismissal or adjournment of those proceedings; or

   (c) Seek an order from the Supreme Court for transfer of those proceedings to this Court (Sydney registry) pursuant to s 5(1) of the Jurisdiction of Courts (Cross-Vesting) Act 1987.

2. Otherwise, save as to costs:

   (a)The application for interim relief sought by the Second Respondent in the Response filed 21 July 2016 is dismissed;

   (b)The Application in a Case filed by the Second Respondent on 21 July 2016 is dismissed;

   (c)The Response to the Application in a Case filed by the Applicant on 9 August 2016     is dismissed;

(d)The Application in a Case filed by the Applicant on 1 August 2016 is dismissed; and

(e)      Any and all other applications for interim relief are dismissed.

1. The Second Respondent shall pay the Applicant’s costs of and incidental to the determination of the applications set out in the preceding order on a party/party basis in the sum agreed or assessed.

Notations

(A)The proceedings remain listed before the Registrar at 2.15 pm on 13 September 2016.

(B)The parties do not require the publication of reasons for Order 3 hereof.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Pratten & McPherson has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth)

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER: SYC 3588 of 2016

Ms Pratten

Applicant

And

Mr McPherson

First Respondent

And

Mrs McPherson

Second Respondent

EX TEMPORE

REASONS FOR JUDGMENT

1. Pending before the Court are property settlement proceedings instituted by the applicant wife under Part VIII of the Family Law Act 1975 (Cth) on 8 June 2016.

2. The wife joined as parties to the proceedings the husband as the first respondent and the husband’s mother as the second respondent. 

3. At this point, the wife’s claim for relief pertains to a single parcel of real property at Suburb X, NSW, though the relief sought may widen once the spouses comply with their obligations of full and frank disclosure in relation to their respective property interests.

4. The X property is legally owned by the wife and the second respondent in equal shares, though the wife asserts the husband enjoys beneficial interest in the whole (or alternatively, part) of the second respondent’s one-half share. 

5. It is the wife’s apparent desire to have the husband’s beneficial interest in the X property declared under s 78 of the Family Law Act and then transferred to her (either in whole or in part) under s 79 of the Family Law Act. The second respondent resists the declaration of any beneficial proprietary interest enjoyed by the husband in her legal interest in the X property (about which the husband is so far silent), but in the event of the existence of such beneficial interest, the husband resists its transfer to the wife as part of any adjustment of their property interests. 

6. Despite being joined to the proceedings at their outset, the second respondent filed separate proceedings in the Supreme Court of NSW about five weeks later, on 14 July 2016, in which she sought relief under s 66G of the Conveyancing Act 1919 (NSW). A copy of the Statement of Claim or Summons is not in evidence, but the interlocutory hearing was conducted on the basis that the second respondent seeks to be appointed as trustee for sale of the X property on behalf of herself and the wife, enabling her to sell the property and divide equally between them the net proceeds of sale.

7. Consequently, there are parallel proceedings involving the parties in both this Court and the Supreme Court.

8. The second respondent sought that the whole of the proceedings pending before this Court be transferred to the Supreme Court pursuant to s 5(4) of the Jurisdiction of Courts (Cross-vesting) Act 1987 (Cth). The wife opposed that application and, in addition, sought an anti-suit injunction restraining the second respondent from prosecuting the separate Supreme Court proceedings.

Applications and Evidence

1. The second respondent moved on the applications for interim relief contained within:

   (a)the Response she filed on 21 July 2016; and

   (b)the Application in a Case she filed on 21 July 2106. 

2. The wife moved on the applications for interim relief contained within:

   (a)the Application in a Case she filed on 1 August 2016; and

   (b)the Response to an Application in a Case she filed on 9 August 2016. 

3. The only evidence read was the affidavit filed by the second respondent on 21 July 2016. The underlying facts germane to the interim dispute were largely uncontentious so the parties sensibly recognised it was unnecessary to rely on other affidavit evidence.

Conclusions and Orders

1. The parties agree it is unsatisfactory that parallel proceedings currently exist in two different jurisdictions. 

2. The parties also agree that all aspects of the controversy, between all of them, could be determined to finality in either jurisdiction. 

3. What they could not agree upon was what should be done to efficiently resolve all of the litigation. The second respondent’s preference was for the Supreme Court to adjudicate and the wife’s preference was for this Court to adjudicate. 

4. As it transpired, the sole reason advanced by the second respondent for her preferring the Supreme Court was her perception that the proceedings would be heard and determined more quickly in the Supreme Court than in this Court. There were, however, two impediments to her application for transfer of the proceedings from this Court to the Supreme Court – one as to fact and the other as to law. 

5. First, although the second respondent deposed to her belief the proceedings would be concluded more quickly in the Supreme Court, that belief was implicitly held on the basis that her s 66G application would be heard by the Supreme Court in its “Real Property List” within the Equity Division in isolation from the wider dispute between the parties.

6. As her counsel was bound to accept, the second respondent’s application to transfer the whole of the matrimonial proceedings in this Court, if granted, would entail the Supreme Court then having to hear the totality of the proceedings. The second respondent’s s 66G application would become subsumed within the broader equity and matrimonial disputes between all three parties. It is highly unlikely the Supreme Court would deal with the whole of those proceedings expeditiously in a specialised case management list concerned with only contracts for sale of land, leases of land, easements and covenants over land, or relief under certain State statutes, as Supreme Court Practice Note SC EQ 12 stipulates.

7. The second respondent deposed “I have no desire to incur legal costs in remaining a party to proceedings in the Family Court in which I have no interest”, but such evidence betrays a misunderstanding by her. She is a party to the matrimonial proceedings, which she asks be transferred to the Supreme Court, and she will remain involved until completion. She is unable to segregate her s 66G application from the wider disputes.

8. In the absence of any reliable evidence (of which there was none) or agreement between the parties (of which there was none) about the comparative estimates of delay until trial in either jurisdiction of the entirety of the litigation, the second respondent’s contention of swifter determination in the Supreme Court was deprived of any force.

9. Secondly, the second respondent’s emphasis on the speed to trial as the only material consideration ignored the test the Court was obliged to apply to determine her application under s 5(4) of the Jurisdiction of Courts (Cross-vesting) Act. 

10. Relevantly, section 5(4) provides:

    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.

11. As would be apparent from the legislation, the focus of attention must be on which of the two Courts is the “more appropriate” forum (s 5(4)(b)(i)), which determination is reached by analysis of stipulated criteria (s 5(4)(b)(ii)), or alternatively, it must be “otherwise in the interests of justice” that the matrimonial proceedings be transferred to the Supreme Court (s 5(4)(b)(iii)).

12. This Court is the more appropriate court to determine the whole of the dispute for the following reasons. 

13. This Court has jurisdiction, including that which is accrued to the federal controversy, to deal with the whole of the dispute between all three parties without the need for reliance upon cross-vesting legislation (s 5(4)(b)(ii)(A)). 

14. As has occurred, the second respondent’s s 66G application could be filed in the Supreme Court, but the Supreme Court could not determine the wider matrimonial dispute between the husband and wife without reliance upon cross-vested jurisdiction (s 5(4)(b)(ii)(B)). Only the statutory application under s 66G of the Conveyancing Act and the equity dispute attending it would fall within the ordinary jurisdiction of the Supreme Court.

15. The efficacy of the second respondent’s s 66G application would hinge entirely upon the success or otherwise of the equity arguments the wife intends to advance in opposition to it. If the second respondent successfully argues for retention of both her legal and equitable interest in the property, this Court could grant relief under s 66G of the Conveyancing Act because the law would be federalised by s 79 of the Judiciary Act (Cth), though the same result could be achieved by use of similar power under the Family Law Act (ss 34, 80, 90AE, 90AF). If the second respondent fails in her bid to retain the whole of her asserted legal and equitable interest in the property, then no occasion arises for application of s 66G of the Conveyancing Act and the parties’ respective proprietary interests could be settled and severed by orders of this Court within its jurisdiction and power (s 5(4)(b)(ii)(C)). 

16. The second respondent’s s 66G application cannot be divorced from wider implications. It is dependent upon resolution of the dispute about the husband’s asserted beneficial interest in the property, which dispute is itself integral to the wider controversy between the spouses about the extent of their property interests and, consequently, if and how those property interests should be adjusted under the Family Law Act. That is quintessentially an amorphous dispute for this Court to decide within its ordinary and accrued jurisdiction. It is a dispute the Supreme Court would only inherit on the back of the s 66G application pursuant to cross-vesting legislation. The Family Court of Australia asserts specialised experience in such disputes, which is not to deny the undoubted expertise of the Supreme Court.

17. Were it not otherwise already obvious, the second respondent’s belief that the proceedings might be dealt with more quickly in the Supreme Court, even if correct, is not sufficient either individually (s 5(4)(b)(iii)) or in aggregation with the other factors (s 5(4)(b)(ii)(D)) to enable the conclusion it would be “in the interests of justice” that the whole of the proceedings before this Court be transferred to the Supreme Court.

18. Accordingly, the second respondent’s application will be dismissed, but that is not sufficient to dispose of the dispute. Simple dismissal of the second respondent’s application for transfer would leave the two sets of proceedings pending in two courts without certainty as to the manner of their progression. 

19. The wife sought an anti-suit injunction restraining the second respondent from taking any further step to prosecute the Supreme Court proceedings. Settled authority dictates that a court should only cautiously grant such an injunction because, although only a remedy in personam, it directly affects the curial process of another court. The court should generally first consider a stay of the proceedings before it (CSR Ltd v Cigna Insurance Australia Ltd (1997) 189 CLR 345 at 390), but it would not be appropriate to stay the proceedings pending before this Court because, as already explained, this Court and not the Supreme Court is the more appropriate court to deal with the whole of the litigation and this Court is not a “clearly inappropriate forum” (Henry v Henry (1996) 185 CLR 571 at 586-589, 592-593; Voth v Manildra Flour Mills Pty Ltd (1990) 171 CLR 538 at 554-557).

20. The wife invited the second respondent to give to this Court an undertaking that, in the event of dismissal of her transfer application, she would take no further steps to prosecute the Supreme Court proceedings. Her counsel informed the Court she declined to give such an undertaking. 

21. Presumably the Supreme Court remains entirely ignorant of the wider dispute pending before this Court. So far as the evidence goes, the Supreme Court would have no knowledge of the ambit of the dispute beyond the simple s 66G application revealed in the second respondent’s Statement of Claim or Summons, which is apparently next returnable before the Supreme Court on Friday 9 September 2016. Counsel for the second respondent declined to indicate the second respondent’s willingness to apply, or consent to the wife’s mooted application, for transfer of the Supreme Court proceedings to this Court. Although considered unlikely, counsel for the second respondent asserted it was possible the Supreme Court may reject an application to transfer those proceedings to this Court.

22. In such circumstances, the justifiable and safest course is to grant the anti-suit injunction restraining the second respondent from prosecuting the Supreme Court suit. This Court undoubtedly has power to grant such a remedy (CSR at 389-394; Cole & Abati [2016] FamCAFC 78 at [34]-[37], [63]-[67]; Teo & Guan [2015] FamCAFC 94 at [47]-[68], [86]-[100], [105]).

23. For those reasons, I make the following orders.

I certify that the preceding thirty-four (34) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Austin delivered on 7 September 2016.

Associate: 

Date:  13 September 2016