SAGONA & SAGONA
[2020] FCCA 1786
•2 July 2020
FEDERAL CIRCUIT COURT OF AUSTRALIA
| SAGONA & SAGONA | [2020] FCCA 1786 |
| Catchwords: FAMILY LAW – Transfer to the Family Court of Australia from the Federal Circuit Court of Australia – application in the Supreme Court of Victoria for transfer – practical issue that there can be no transfer of the Supreme Court proceedings to the Federal Circuit Court of Australia – proceedings transferred to the Family Court of Australia – Husband’s parents joined as Second and Third Respondents. |
| Legislation: Corporations Act 2001 (Cth) Family Law Act 1975 (Cth), ss.79, 121 Federal Circuit Court Rules 2001 (Cth), rr.1.03(1), 8.02, 8.02(2), 8.02(4), 11.01(1) Jurisdiction of Courts (Cross Vesting) Act 1987 (Cth) Jurisdiction of Courts (Cross Vesting) Act 1987 (Vic) Property Law Act 1958 (Vic), s.91 |
| Cases cited: Talbot & Talbot [2014] FamCA 128 Valceski v Valceski [2007] NSWSC 440 Warby & Warby [2001] FamCA 1469 |
| Applicant: | MS SAGONA |
| Respondent: | MR SAGONA |
| File Number: | DGC 3471 of 2019 |
| Judgment of: | Judge Stewart |
| Hearing date: | 26 June 2020 |
| Date of Last Submission: | 26 June 2020 |
| Delivered at: | Melbourne |
| Delivered on: | 2 July 2020 |
REPRESENTATION
| Counsel for the Applicant: | Mr Hall |
| Solicitors for the Applicant: | PCL Lawyers |
| Counsel for the Respondent: | Ms Skinner |
| Solicitors for the Respondent: | Mark J Halse Barrister & Solicitor |
ORDERS
Leave is granted to the Wife to make an application to transfer these proceedings to the Family Court of Australia.
On 9 July 2020 and pursuant to section 39 of the Federal Circuit Court Act 1999, these proceedings be transferred to the Melbourne Registry of the Family Court of Australia to be listed on a date to be advised.
The Husband’s parents, Mr B Sagona and Ms C Sagona, be joined as parties in the proceedings and hereafter referred to as the Second and Third Respondent.
Each of the parties’ costs be and are hereby reserved.
Liberty is granted to each of the parties to apply with respect to costs.
Leave is granted to the parties to provide a sealed copy of these orders and the Reasons for Judgment to the Supreme Court of Victoria in proceedings ....
Liberty is granted to the parties to apply specifically with respect to order 6 hereof.
AND THE COURT NOTES THAT
(A)The parties, or any of them, shall forthwith advise the Chambers of Judge Stewart in the event that they seek to be heard with respect to orders 5 and/or 6 hereof.
(B)The transfer to the Family Court of Australia will not take place until 9 July 2020 to allow the parties to avail themselves of orders 5 and/or 6 hereof.
IT IS NOTED that publication of this judgment under the pseudonym Sagona & Sagona is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT DANDENONG |
DGC 3471 of 2019
| MS SAGONA |
Applicant
And
| MR SAGONA |
Respondent
REASONS FOR JUDGMENT
These are substantive proceedings between the Wife and the Husband pursuant to section 79 of the Family Law Act 1975 (Cth) (“the Act”). At first glance, these proceedings are simple and form part of the general family law work that this Court deals with every day.
This is the Wife’s application to transfer these proceedings to the Family Court of Australia. That application is resisted by the Husband and his parents, who were legally represented on 26 June 2020 but had not been formally joined in the proceedings. The Wife applies for an order that the Husband’s parents be joined, which is also resisted by both the Husband and his parents.
The Wife is 35 years old and the Husband is 40 years old. The parties married in Country D in 2006, with the Wife moving to Australia to commence cohabitation a few months later. They separated under the one roof in November 2017 and the Husband departed the former matrimonial home in mid-2018. The parties divorced in May 2019.
The parties’ marriage produced two children who continue to live with the Wife in the former matrimonial home at E Street, Suburb F in the State of Victoria (“the former matrimonial home”). The parties’ children were born in 2007 and 2011 and are aged 12 and eight years respectively. The children live with the Wife and spend every second weekend with the Husband.
It seems clear from the parties’ earlier affidavits that the financial affairs of the Husband and the Wife were intertwined with the financial affairs of the Husband’s parents. They lived with the Husband’s parents at the commencement of cohabitation and in 2008 an investment property in Suburb G was purchased in the joint names of the Husband and his mother. The Husband said that at that time there was a debt owing to his father of approximately $47,500.
In late 2012 the parties purchased the former matrimonial home, borrowing $29,000 from the Husband’s Father. There is a factual dispute between the parties as to whether this sum was repaid. The investment property which was in the joint names of the Husband and his mother was sold and there is a factual dispute as to whether the Wife was aware of the sale. There is no dispute that the former matrimonial home was and is registered in the Husband’s sole name.
The Husband and the Wife have acquired cars, furniture and superannuation during their marriage. At first instance, and subject to any monies owing to the Husband’s parents, the non-superannuation asset pool available to be divided might be around $700,000, with superannuation entitlements available for division of approximately $200,000. There is a modest dispute about the value of the former matrimonial home, which can be easily determined in due course.
Proceedings were issues in the Federal Circuit Court of Australia by the Wife on 18 October 2019. The Husband filed his responding documents on 28 November 2019 and the proceedings came before the Court on 2 December 2020. At the first Court hearing orders were made for financial disclosure, the Wife to have sole use and occupation of the former matrimonial home and further orders were made to preserve the parties’ assets. The proceedings progressed to a Conciliation Conference which occurred on 21 February 2020. The proceedings were otherwise listed for a two day final hearing to commence on 20 April 2020. As is obvious the proceedings did not resolve at the Conciliation Conference.
On 20 April 2020 the proceedings came before the Court for final hearing. The final hearing did not proceed on that date as in the intervening period between listing and trial the Supreme Court proceedings had been issued and the Wife sought a transfer of these proceedings to the Family Court of Australia. The Husband had not had appropriate notice of the application, notice having been provided the evening before, and he wished to defend the application. The Husband’s parents did not appear on 20 April 2020, but given the nature of the application they were clearly interested parties and needed to be served with the application. Accordingly, the proceedings were adjourned for the application for transfer to be determined in a procedurally fair manner. The orders made on 20 April 2020 reflect this in the relevant notations, which read as follows:-
A. The purpose of the adjourned date is to assess what competing applications, if any, have been filed and to ascertain whether the Husband’s parents seek to be involved in these proceedings on the question of transfer.
B. The proceedings in the Supreme Court of Victoria for summary judgment issued by the Husband’s parents against the Husband and/or the Wife are set down to be heard on 24 April 2020.
C. The Wife has indicated that she will seek to have these proceedings transferred to the Family Court of Australia in order to allow the proceedings in the Supreme Court of Victoria to be cross vested pursuant to the Jurisdiction of Courts (Cross-vesting) Act 1987.
This rather prosaic summary of the proceedings, in terms of both history and litigation, becomes rather more complicated when one looks more closely.
The first issue, and less relevant for the purpose of this dispute, is a number of simmering disputed allegations in the property proceedings in this Court. The Wife alleges she has been subjected to ongoing financial control by the Husband and/or the Husband’s parents. She alleges a relationship characterised by coercive and controlling behaviour from both the Husband and his parents (denied by the Husband), including disparaging and humiliating comments made by the Husband towards her such as- “you are only marrying me so that you can obtain Australian citizenship and make my life hell” (which is also denied by the Husband). On 12 August 2019 the Wife applied for an Intervention Order against the Husband alleging she felt fearful that the Husband would harm her (although there are no allegations of physical abuse by the Husband towards her in the proceedings). The Wife also alleges illicit drug use by the Husband (which is denied by him).
The Wife alleges that the Supreme Court proceedings are a continuation of coercive and controlling financial behaviour by the Husband and/or his parents. She is now litigating in two jurisdictions with significant financial and emotional cost.
The second, and more significant issue, is the commencement of proceedings in the Supreme Court of Victoria by the Husband’s parents. The Husband’s parents seek a declaration of equitable charge over the former matrimonial home (which is in the Husband’s sole name), a sale of the property pursuant to section 91 of the Property Law Act 1958 (Vic) and consequential orders pertaining to the sale, including a distribution to the Husband’s parents of their claim.
The Supreme Court proceedings were issued by Writ and Claim on 17 December 2019. Thus commenced the litigation in the Supreme Court and the Federal Circuit Court of Australia relating to the same real property, namely the former matrimonial home. At first instance the Husband was the only Defendant named. He failed to defend the Writ in the Supreme Court, thus giving the Husband’s parents the right to apply for Judgment in Default or Summary Judgment.
At the time the Conciliation Conference proceeded in the Federal Circuit Court of Australia on 21 February 2020, the Wife was unaware of the Supreme Court proceedings as she had not been served. On the same day the Conciliation Conference was proceeding, the Husband’s parents applied in the Supreme Court for Summary Judgment (and I unreservedly accept that the Husband’s Counsel who also appeared for the Husband at the Conciliation Conference was unaware of this). A week later, on Friday 28 February 2020, the Wife’s solicitors were served with the proceedings filed in the Supreme Court on 21 February 2020. Those proceedings were due to be heard in the Supreme Court the next business day, namely the Monday, at 10.00am. The Wife appeared in the Supreme Court and her application to be joined as a Second Defendant was granted, together with further orders giving the Wife the opportunity to file an application to transfer those proceedings to the Federal Circuit Court of Australia. The hearing date for that application was set for 16 April 2020 but was adjourned pending the hearing in the Federal Circuit Court of Australia scheduled on 20 April 2020. As set out above, the hearing in the Federal Circuit Court of Australia on 20 April 2020 was adjourned with directions for filing.
The Wife filed her Application in a Case on 7 May 2020 in the Federal Circuit Court of Australia seeking joinder of the Husband’s parents and a transfer of the proceedings to the Family Court of Australia. The Wife also seeks costs. The Husband filed his Response to Application in a Case on 15 June 2020 seeking dismissal of the Wife’s application. He also sought costs. The Husband’s parents provided the Court with two affidavits in support and submissions, but did not file an application. Nevertheless, the thrust of their submission is that the application for joinder and transfer is resisted and should be dismissed. The Husband’s parents clearly have an interest in the outcome of the Wife’s application and therefore it is appropriate and necessary in the interests of justice that they were heard and considered on the application.
For the sake of completion, the Husband’s parent’s claim as Plaintiffs in the Supreme Court seems to be for approximately $580,000 plus interest and costs. In the event their claim is successful, the non-superannuation property pool available to be divided between the parties in these proceedings will be minimal, if not negligible. It may be that all that remains is the superannuation and personal property in the form of vehicles and chattels. Thus, the issue of what interest the Husband’s parents may have would form the significant aspect of the dispute between the parties in the family law proceedings if that issue is transferred from the Supreme Court to the Family Court of Australia.
The Family Court of Australia has wide ranging powers with respect to third party debt. What is clear is that if the Supreme Court proceedings are transferred, the position of the Husband’s parents will be determined and dealt with as might seem appropriate to the trial judge. It will not be ignored. Although it was put by the solicitor for the Husband’s parents that they will argue that no direct jurisdiction arises for the Family Court of Australia, save for accrued jurisdiction, the Family Court of Australia has wide ranging powers to direct parties to undertake and do all acts and things necessary to give effect to any declarations and findings the Court makes.
In the Supreme Court proceedings the Wife applies for a transfer of those proceedings to run with the family law proceedings pursuant to the Jurisdiction of Courts (Cross Vesting) Act 1987 (Vic) or in the alternative the Jurisdiction of Courts (Cross Vesting) Act 1987 (Cth) (“the Cross Vesting legislation”). The reason the Wife applies for a transfer is hardly opaque. The Cross Vesting legislation does not apply to the transfer of matters from the Supreme Court of Victoria (or any other State or Territory) to the Federal Circuit Court of Australia, but rather only to transfers to the Family Court of Australia.
Unless the Wife’s application for transfer to the Family Court of Australia is granted, her transfer application filed in the Supreme Court proceedings is thwarted.
Each of the parties made comprehensive submissions both in Court and in writing. In particular I have been referred to the following:-
a)Valceski v Valceski [2007] NSWSC 440, being a leading case with respect to transfer applications;
b)Warby [2001] FamCA 1469, with respect to the accrued jurisdiction of the Family Court of Australia;
c)Rule 8.02 of the Federal Circuit Court Rules2001 (Cth), the interests of justice; and
d)the peculiar expertise of the Supreme Court in dealing with applications pursuant to section 91 of the Property Law Act 1958.
I am not the decision maker on the transfer issue from the Supreme Court, but I am satisfied that the Wife has at least an arguable case in the Supreme Court proceedings for transfer and that is sufficient in and of itself to warrant the transfer of these proceedings to the Family Court of Australia. To embark on a detailed analysis of the substantive merits of the Wife’s transfer application in the Supreme Court is to go beyond the scope of this analysis.
To deal briefly with the matters set out in rule 8.02 of the Federal Circuit Court Rules 2001 (Cth), it is noted that:-
a)this case does not involve issues of general importance such that it would be desirable for there to be a decision of the Federal Court of Australia or the Family Court of Australia on one or more of the points in issue;
b)transfer between the Federal Circuit Court of Australia and the Family Court of Australia will probably not result in a significant increase in cost or delay. Enquires indicate that at present there is a roughly a 12 to 18 month delay (depending on whom the proceedings are ultimately docketed). If there are any urgent or pressing issues in these proceedings the Family Court of Australia has a process to apply for an expedited hearing The cost may be marginally more in the Family Court of Australia, however I do not regard the additional cost as being significant having regard to the issues in these proceedings. There is also the prospect of returning the proceedings to the Federal Circuit Court of Australia if it ultimately transpires that the transfer from the Supreme Court to the Family Court of Australia is not granted. The delays for final hearings in the two courts are roughly similar; and,
c)the parties have disparate wishes regarding this transfer which is symptomatic of the hotly contested nature of almost all aspects of this dispute.
I agree with the submissions of the Husband’s parents that these proceedings do not seem to fall within the protocols between the Family Court of Australia and the Federal Circuit Court of Australia regarding appropriate venue to issue (and by analogy appropriate venue). Although, in the event the Supreme Court proceedings are transferred to the Family Court of Australia it is not difficult to envisage the proceedings taking four or more days.
Rule 8.02(4) of the Federal Circuit Court Rules 2001 (Cth) identifies the factors relevant to transferring proceedings between the Federal Circuit Court of Australia and the Family Court of Australia. This is a class of proceeding where the Wife has an arguable case for transfer in the Supreme Court proceedings, but only if these proceedings are transferred to the Family Court of Australia. In that sense, in terms of the availability of the procedure in family law to receive a cross vested case rests exclusively with the Family Court of Australia. The concept of transferring to acquire jurisdiction is not unknown in the family law arena. Justice Benjamin noted this in Talbot & Talbot [2014] FamCA 128 when his Honour at paragraph 18 referred to:-
… some form of ‘Yo’ process could be employed with the Federal Circuit Court transferring proceedings to the Family Court (sans jurisdiction) followed by an immediate return (with broader jurisdiction).
Although the comment was made with respect to a transfer from the Family Court of Australia to the Federal Circuit Court of Australia to acquire jurisdiction in the Federal Circuit Court of Australia in respect of exercising power under the Corporations Act 2001 (Cth), the comments are analogous to the situation at hand.
Rule 1.03(1) of the Federal Circuit Court Rules 2001 (Cth) provides that “the object of these Rules is to assist the just, efficient and economical resolution of proceedings.”
I do not wish to dissemble or obfuscate. It would visit an injustice on the Wife to deprive her the opportunity to at least argue her case for transfer in the Supreme Court proceedings. It was put by the solicitor for the Husband’s parents and Counsel for the Husband that the decision to issue in the Federal Circuit Court of Australia was made mistakenly or erroneously by the legal practitioners for the Wife, and as such they are responsible. It is difficult to understand that submission in circumstances where the Wife was unaware that the Supreme Court proceedings had been issued when she issued in the Federal Circuit Court of Australia, even in circumstances where she may have been aware of the caveat that had been lodged over the former matrimonial home. That notwithstanding, it would be an unfortunate result for the administration of justice (and for the legal profession generally) if technical points, readily remedied in this instance, could stand in the way of a substantive consideration of the Wife’s case on its merits. The solicitor for the Husband’s parents quite properly reminded the Court that the concept of the interest of justice relates to all parties and not just to the Wife. I agree, but in weighing any prejudice to each of the parties, the prejudice to the Wife in not granting the transfer outweighs any prejudice to the other parties. Furthermore, any prejudice to the other parties may adequately be addressed in costs.
The application for transfer in the Supreme Court is opposed by the Husband and his parents on numerous grounds. In saying that, the Wife has an arguable case for transfer. I am in no way seeking to predict the outcome of the transfer proceedings in the Supreme Court and it would be wholly inappropriate for me to do so. The comprehensive submissions made on behalf of the Husband and the Husband’s parents are noted and there is no doubt that the defence to the Wife’s transfer application in the Supreme Court proceedings will be pursued on the numerous grounds set out in their written submissions.
Counsel for the Husband also argued that the application for transfer to the Family Court of Australia in these proceedings was out of time as pursuant to rule 8.02(2) of the Federal Circuit Court Rules 2001 (Cth):-
Unless the Court otherwise orders, the request must be included in a response or made by application supported by an affidavit.
These proceedings were listed for hearing within six months of issue. That is a short period of time and unusual in the Federal Circuit Court of Australia. Further, the Wife only became aware of the Supreme Court proceedings in late February 2020 and was required to attend to the litigation in the Supreme Court quickly. I will grant leave to the Wife to make this application for transfer to the Family Court of Australia.
The solicitor for the Husband’s parents suggested that a hearing on substantive issues would take place earlier in the Supreme Court than in the Family Court of Australia. It seems that this issue is largely irrelevant to this application and is really a matter for the actual transfer application in the Supreme Court.
For the foregoing reasons the Wife’s application for the proceedings to be transferred from this Court to the Family Court of Australia will be granted. The actual transfer will occur one week from today to allow the parties to make any applications arising out of these orders, if that is necessary.
I turn now to the issue of joinder. Rule 11.01(1) of the Federal Circuit Court Rules 2001 (Cth) states:-
Subject to any order of the Court, a person whose participation is necessary for the Court to completely and finally determine all matters in dispute in a proceeding must be included as a party in the proceeding.
As set out above, it was appropriate and necessary for the Husband’s parents to participate in these proceedings. Moving forward, their required participation in the family law proceedings will largely depend on the outcome of the Supreme Court proceedings. The proceedings will be listed in the Family Court of Australia on a date to be determined by the superior court. No doubt the outcome of the Supreme Court proceedings will dictate whether their continued involvement in these proceedings is necessary, but it will be simple to remove the Husband’s parents as respondents in the event that they successfully resist the Wife’s transfer application or if the Supreme Court proceedings resolve in some other fashion. I shall join the Husband’s parents as Second and Third Respondents to these proceedings.
In a similar but not identical analysis, in the event that the Wife’s application in the Supreme Court proceedings is unsuccessful or if the Supreme Court proceedings resolve, and always subject to the discretion being exercised in the Family Court of Australia, I would not regard it as unreasonable for the proceedings to be returned to the Federal Circuit Court of Australia if it was thought to be appropriate at that time.
I turn now to costs. Each of the parties seek costs. Although I will reserve liberty to apply on any costs argument arising out of these proceedings, I make the observation that costs issues should probably be in the overall cause rather than at this point. There will be almost inevitable cost consequences dependant on the outcome of the Husband’s parents claim and the costs argument here will probably rise or fall on that outcome.
Finally, I propose to order that parties be at liberty to provide these reasons and sealed orders to the Supreme Court to ensure there are no breaches of section 121 of the Act. There is however one caveat. I have not raised this with the parties and accordingly if any party objects to that course the proceedings will be listed with some degree of urgency for that argument.
Accordingly, and for the reasons set out, I make the orders as set out above.
I certify that the preceding thirty-seven (37) paragraphs are a true copy of the reasons for judgment of Judge Stewart
Associate:
Date: 2 July 2020
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