Rooke and Rooke and Anor

[2018] FCCA 987

FEDERAL CIRCUIT COURT OF AUSTRALIA

ROOKE & ROOKE & ANOR [2018] FCCA 987

Catchwords:
FAMILY LAW – Property settlement – transfer of proceeding – cross-vesting.

Legislation:

Family Law Act 1975 (Cth), ss.78-79

Jurisdiction of the Court (Cross-Vesting) Act 1987 (Cth), s.5

Cases cited:

BioAg Pty Ltd v Hickey [2007] NSWSC 296

Philip Morris Inc v Adam P Brown Male Fashions Pty Ltd (1981) 33 ALR 465

Applicant: MS ROOKE

First Respondent: MR ROOKE

Second Respondent: MS CASSIDY

File Number: SYC 1332 of 2017

Judgment of: Judge Henderson

Hearing date: 15 February 2018

Date of Last Submission: 9 February 2018

Delivered at: Sydney

Delivered on: 15 February 2018

REPRESENTATION

Counsel for the Applicant: Mr Dura

Solicitors for the Applicant: First Choice Family Lawyers

Counsel for the First Respondent: Mr Wong

Solicitors for the First Respondent: Santone Lawyers

Solicitors for the Second Respondent: Mr La Cava of Cara Marasco & Company

ORDERS

1. The proceedings are remitted to the Supreme Court of New South Wales on a date and time to be fixed by that Court.

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

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT SYDNEY

SYC 1332 of 2017

MS ROOKE

Applicant

And

MR ROOKE

First Respondent

MS CASSIDY

Second Respondent

REASONS FOR JUDGMENT

1. The matter of Rooke & Rooke & Cassidy. This is an application filed by the husband, amended on 6 July 2017, seeking on a final basis a declaration that the second respondent, his mother-in-law, holds one half of her property at (omitted) on trust for he and his former wife, her daughter. Clearly, this is an application falling within the original equitable jurisdiction of the Supreme Court of New South Wales.

2. This application is not only opposed by the wife and the applicant’s mother-in-law, but if the husband wishes to pursue this application, they each say the whole of the proceedings should be remitted to the Supreme Court. It is clear that the Supreme Court can, if necessary, exercise a federal jurisdiction and make orders under section 79 and declarations under section 78,[1] from a reading of section 5(4)(iii) of the Jurisdiction of Courts (Cross-Vesting) Act,[2] which is the relevant Act in this particular application.

   [1] Family Law Act 1975 (Cth), ss.78-79

   [2] Jurisdiction of the Courts (Cross-Vesting) Act 1987 (Cth) s5(4)ii.

3. The following is applicable to these proceedings:

   a)Where a proceeding is pending in the Federal Court or the Family Court and it appears to the first court that it is otherwise in the interests of justice that the relevant proceedings be determined by the Supreme Court of a state or territory, the first court shall transfer the relevant proceedings to that Supreme Court.

   b)Uncontentiously, this Court can also deal with the husband’s claim for equitable relief by way of a declaration in relation to the holding on trust of interest in his mother-in-law’s property and, clearly, the ensuing family law matters that arise from that decision, namely a division of the parties’ superannuation, chattels, and debts.

   c)Looking at the balance sheet that was tendered to me and excising the grandmother’s home, which is not on that balance sheet because at law it is her home and only her home solely, the parties have some chattels, cars and the like and totalling $12,000; debts of $15,000 - so their chattels would not cover their debts – and superannuation totalling about $150,000 between them.

   d)Thus the liquid assets are less than their debt situation. Given their age is around 50, they have many years before they can access the superannuation. The reality is these people have no assets and I do not wish to be rude or pejorative by saying that. It is a statement of fact.

4. The evidence I read is as follows:

   a)The husband’s application and amended application, financial statement and affidavit filed 2 March 2017;

   b)An affidavit of Ms N in relation to the relevant Supreme Court proceedings, length of directions hearing, trial and the like, filed 6 October 2017;

   c)Written submissions on this issue by Mr Dura of counsel.

   d)For the wife, her response affidavit and financial statement, filed 20 September 2017;

   e)An affidavit of Ms M in relation to the delay and timetabling in the Supreme Court filed 29 September 2017;

   f)A case outline by Mr Wong, her counsel.

   g)For the grandmother, her response and affidavit of 18 September 2017;

   h)A case outline prepared by Mr La Cava, a solicitor, who acts for her.

5. I accept Ms M’s affidavit evidence that this matter will be dealt with in the normal course in the Supreme Court within 12 months, far quicker than could be dealt with in this Court in the normal course, and if expedited within one to two months after the directions hearing.

6. The first directions hearing would occur in four weeks and that is consistent with the affidavit of Ms N who was not able to give, in her affidavit, precise times and dates of when the matter is likely to be dealt with. Ms M’s affidavit was more extensive in that regard.

7. Therefore, if the parties sought expedition there could be a hearing well within six months of today’s date, and in the normal course, 12 months of today’s date.

8. In my docket, final hearing in this matter in the normal course from today’s date might be two years away. If expedited, perhaps 12 months away, given the natural priority that parenting matters have over property matters in this jurisdiction, although not a sole priority. Any expedition application would be based on the mother-in-law’s age and health. She is 90. She injured her hip in 2017. Otherwise, her health is good as could be expected for a 90 year old.

9. The evidence, thrust, gravamen – whatever you want to call it – the kernel of the issue to be determined by a court is the alleged gift of half of his mother-in-law’s property or a promise to be gifted half of the mother-in-law’s property, that the husband says was made by the mother-in-law to he and his wife, all denied by the mother-in-law and her daughter, or perhaps the doctrine of unjust enrichment given what the husband says was the renovations carried out on his mother-in-law’s property whilst he and his family occupied that property.

10. He says they are extensive and valuable renovations that he carried out and that his occupation of the property started in late 2003 until separation in 13 August 2016, and that it was the husband, wife and their children that lived with the grandmother. The husband says that he and his wife contributed some $300,000 -odd dollars from the sale of the property they owned in (omitted) as part of the renovation to the grandmother’s home.

11. Now, if the husband is not successful in his application that part of the grandmother’s property is held on trust for her daughter or is gifted to the husband and wife or on the doctrine of unjust enrichment or some other equitable principle, apart from the superannuation that the parties have, they have no other property from which to make any adjustment or make a cost order, and their debts exceed their liquid assets. The question, as I see it, is this:

    a)Is it in the interests of justice the relevant proceedings be determined by a Supreme Court of a state or territory?

    b)The finding from me is an emphatic yes for the following. The grandmother is not a party to the marriage and yet it is her unencumbered solely owned family home that the husband seeks a declaration in respect of, that is, that his wife owns 50 per cent of it. I do not see that section 79[3] matters have much relevance to the determination of that particular issue.

    [3] Family Law Act 1975 (Cth), s.79

12. Section 79[4] applications require that a court, first, must identify the property held by the parties, its nature and species, and its value. At this stage, apart from superannuation, the parties have no property. It may well be at times that the interests of a third party such as a co-owner with spousal land or chattels or a business, and how they hold that property or how it is held as between the parties to the marriage and the third party - is a matter this Court should inquire into and make a declaration or finding having regard to the equitable principles in the New South Wales Supreme Court.

    [4] Ibid.

13. This is particularly so if there are loans documented or moneys traced and those loans or the moneys traced have been intermingled with assets or property of a third party. Then it may well be very proper that this Court retain the action here, do that tracing exercise, determine the holding of the property, and then seek to apply the 79[5] principles to whatever property is determined that the parties to the marriage hold. These are not the factual issues in this matter.

    [5] Ibid.

14. The husband’s first and most difficult hurdle is to obtain the declaration he seeks. It is clearly just and in the interest of justice that the Court, which is available, exercises this jurisdiction on a day-to-day basis and has the inherent jurisdiction, ought be the Court to determine that issue, particularly where that Court can then, after having determined that issue, also determine the parties’ entitlement to property under section 79 of the Family Law Act 1975.[6]

    [6] Ibid.

15. Secondly, the proceedings can be dealt with in the Supreme Court far quicker than in this Court, and that is a significant factor that the husband raises in his application given the mother-in-law’s age. The parties have already filed affidavits in these proceedings and the production of a summons and a defence, which is required to be filed in the Supreme Court with the same affidavit they have filed in these proceedings with a different cover sheet, is not of a huge impost in terms of time or in costs.

16. Thus I do not see there will be a huge disarray or difficulty in getting this matter ready to be filed in the Supreme Court. The Supreme Court is, to use the words of Brereton J in BioAg Proprietary Limited & Hickey,[7] the more appropriate forum. The discussion by Barwick J of the High Court in the famous Philip Morris[8] case and the words “the exercise of an accrued jurisdiction is discretionary”[9] are most appropriate today.

    [7] BioAg Pty Ltd v Hickey [2007] NSWSC 296.

    [8] Philip Morris Inc v Adam P Brown Male Fashions Pty Ltd (1981) 33 ALR 465.

    [9] Ibid.

17. I would be most concerned to exercise an accrued jurisdiction where the main, most difficult and, really, the first and priority point is, whether the husband’s wife has an interest in her mother’s property by way of a declaration or some trust or due to an unjust enrichment principle document. The parties will, as here, be required to undertake a mediation, some form of private or court-ordered meditation and could do so right now if they wish to do so.

18. For all those reasons, given that the most important fact in issue is the determination by declaration of the interest of a party to a marriage to the property of a third party to the marriage, it is clearly just that that matter be transferred to the Supreme Court who has that inherent and equitable jurisdiction. And I will so order. Therefore, these proceedings are transferred to the Supreme Court to be dealt with in accordance with the practice and procedure of that Court.

I certify that the preceding eighteen (18) paragraphs are a true copy of the reasons for judgment of Judge Henderson

Date:  23 April 2018