Scobie and Dudley and Anor

[2014] FCCA 816

FEDERAL CIRCUIT COURT OF AUSTRALIA

SCOBIE & DUDLEY & ANOR [2014] FCCA 816

Catchwords:
FAMILY LAW – Jurisdiction – accrued jurisdiction – powers of this Court – transfer to the Family Court of Australia.

Legislation:

Family Law Act 1975, s.79

Federal Circuit Court Rules 2001, r.8.02

Stanford v Stanford [2012] HCA 52
Hickey v Hickey & Attorney-General of the Commonwealth (Intervener) (2003) FLC 93-143

Selan & Selan [2013] 49 FamLR 164
Balceski v Balceski 2007 70 NSWLR 36

Applicant: MR SCOBIE

First Respondent: MS DUDLEY

Second Respondent: MS L DUDLEY

File Number: SYC 7106 of 2012

Judgment of: Judge Kemp

Hearing dates: 7, 8 & 9 April 2014

Date of Last Submission: 9 April 2014

Delivered at: Sydney

Delivered on: 9 April 2014

REPRESENTATION

Counsel for the Applicant: Mr Gruzman

Solicitors for the Applicant: Shipton & Associates Solicitors

Counsel for the First Respondent: Ms Bridger

Solicitors for the First Respondent: Ken Heasman Llb Solicitor

Counsel for the Second Respondent: Mr Underwood

Solicitors for the Second Respondent: Forsters Solicitors

ORDERS

1. The matter is transferred to the Family Court of Australia for directions on 16 June 2014 at 10.00am.

2. The costs of all parties are reserved.

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

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT SYDNEY

SYC 7106 of 2012

MR SCOBIE

Applicant

And

MS DUDLEY

First Respondent

MS L DUDLEY

Second Respondent

REASONS FOR JUDGMENT

Introduction

1. These proceedings commenced by the husband by way of an Initiating Application filed on 7 January 2013 with a first return date of 19 March 2013. 

2. On 19 March 2013, an interim order was made restraining the Second Respondent, Ms L Dudley, the mother of the First Respondent wife, from encumbering or further encumbering a property known as Property M, New South Wales, (“the property”).  The Respondents were directed to file and serve their Responses, Financial Statements and Affidavits and the matter was adjourned to 13 June 2013, before Judge Sexton. 

3. On 13 June 2013, the proceedings were adjourned to 27 August 2013 with directions that the wife’s solicitors within 14 days forward any request for further particulars of the husband’s claim and any request for financial documents within a further 14 days requesting any specific financial documents.

4. On 27 August 2013, the Court directed the parties to conciliate the matter at a Conciliation Conference scheduled on 23 October 2013 but also made orders for the matter to be allocated a final hearing date commencing 7 April 2014. 

5. A Conciliation Conference proceeded on 23 October 2013, but the matter did not resolve.

6. The matter then came before the Court on the first day of the hearing on 7 April 2014.

7. On the first day, an objection was taken in respect of the affidavit material of the husband which had referred to the existence of various diaries upon which the husband had relied in the preparation of his affidavit.  Those diaries had, it would appear, not been produced earlier, albeit they were, otherwise, available for inspection.

8. The extensive affidavit of the husband was filed on 24 March 2014, not strictly in accordance with the trial directions, which required that that material be provided 35 days prior to the hearing.  The husband’s Financial Statement was only filed on 4 April 2014. 

9. The husband also relied on an Affidavit of an architect, being Mr M, filed on 24 March 2014. 

10. The wife relies on her affidavit sworn 18 April 2013, an updated Affidavit sworn 24 March 2014 and an Affidavit in reply sworn only on 8 April 2014, which was filed in Court on that day.  The wife also relied on Affidavits of Ms J affirmed 6 April 2014 and Ms G affirmed 14 March 2014. 

11. The matter was not brought back before this Court between the date of the Conciliation Conference on 23 October 2013 and the first day of trial.  It might have been useful if the parties had sought directions at an earlier time point, given it would appear and there were outstanding disclosure issues.

12. Leave was granted to the wife to file an Amended Response on 7 April 2014, which sought an order that the husband’s Amended Initiating Application be dismissed with costs. 

13. The Court dispensed with the need for the Second Respondent to file a formal Response to the husband’s Amended Initiating Application and received as Exhibit 1, her proposed Minute of Order, which sought, in effect the dismissal of orders 1-3 of the husband’s Amended Initiating Application with costs.

14. The matter was then stood over until 8 April 2014, which allowed the Respondents the opportunity of inspecting the husband’s diaries produced and noting also that this Court also entertained another matter listed for hearing on 7 April 2014. 

15. When the matter resumed on 8 April 2014, the Court dealt with substantial objections raised by the parties to their affidavit material relied upon.  That process took most of the day. 

16. During the course of the Court ruling on the admissibility of the parties’ affidavit material, it became apparent to the Court that there were issues as to the Court’s jurisdiction.  This matter was raised with all Counsel.

17. Mr Gruzman of Counsel appeared for the husband, Ms Bridger of Counsel appeared for the wife and Mr Underwood of Counsel appeared for the Second Respondent. 

18. The matter then returned to Court on 9 April 2014, when the issue of jurisdiction was addressed by counsel between about 10.15am and 1.00pm. 

19. Mr Underwood by way of an oral application, sought orders in terms of that set out in a document which is Exhibit “1A”.  Those orders are

    a)That the Application of the Applicant husband for declarations and orders sought in paragraphs (a) to (h) of paragraph 26 of the particulars dated 28 January 2014 (which were attached to the Amended Initiating Application) be dismissed for lack of jurisdiction; and

    b)Orders 1, 2, 3, 4, 5, 7, 8, 9, 10, 11, 12 and 13 set out in the Initiating Application be dismissed for want of jurisdiction.

20. Mr Underwood provided an aide memoire for his submissions in respect of the Court’s lack of jurisdiction, referenced to the various paragraphs of the particulars provided by the husband and the Court refers to that in identifying the following issues impacting upon the Court’s consideration of its jurisdiction:

    a)Whether the draft Wills of Mr J and the Second Respondent were a representation? (Particular 11);

    b)Whether the Will of Mr J dated 16 March 2009 was a representation (Particular 14);

    c)Whether there was a contract/agreement by Mr J not to revoke his Will of 16 March 2009;

    d)Whether the Will of the Second Respondent dated 16 March 2009 (Exhibit “3”) was a representation (Particular 15);

    e)Whether there was a contract/agreement by the Second Respondent not to revoke her Will of 16 March 2009 (Exhibit “3”);

    f)Whether the Will of the Second Respondent dated 17 November 2010 (Exhibit “4”) was in breach of any agreement not to revoke the Will of 16 March 2009 (Exhibit “3”) (Particular 18);

    g)What were the terms of the agreement pleaded in paragraph 19 of the particulars and who were the parties to this agreement? (That particular asserted that the First and Second Respondents were in breach of the agreement having failed and refused to allow a Strata Plan to be finalised and registered);

    h)Whether the First and Second Respondents have breached the agreement pleaded in Particular 19;

    i)Whether the Second Respondent holds the extensions on the property in trust for the Applicant husband and First Respondent wife (Particulars 24 and 25);

    j)Whether the Second Respondent holds half of the land and improvements on trust for the Applicant husband and First Respondent wife (Particulars 24 and 25);

    k)Whether the Court has power to make the declarations and orders in paragraph 26 of the Particulars.

21. Ms Bridger confirmed that the wife supported the Second Respondent’s application.

22. Mr Gruzman, in seeking to deal with the jurisdictional issues,  confirmed that his client was now abandoning the orders sought in the Amended Initiating Application as set out in paragraphs 1, 2, 3, 4, 5, 7, 8, 9, 10, 11 and 12.  He sought to substitute a Minute of Order now sought by the Applicant husband as against the Second Respondent.  That minute has become Exhibit “A” and seeks the following:

    a)A declaration that the property be held by the Second Respondent on trust for the Applicant husband and the First Respondent wife.

    b)That the land comprising the property be subject to a charge or lien supported by caveat as to the value of the trust interest determined in order (a). 

    c)That the Second Respondent do all acts and things and sign all documents to sell the land comprising the property and to pay to the Applicant husband and First Respondent wife a sum which is equal to the value of the interest found.

    d)Such further or other order as the Court sees fit.

    e)The Second Respondent pay the Applicant husband’s costs.

23. Mr Gruzman has abandoned some prayers of relief clearly outside the jurisdiction of this Court (in particular those seeking a declaration under s.66G of the Conveyancing Act).  The remaining matters articulating the scope of the relief sought may be within jurisdiction, albeit raising complex factual issues for determination as to the application of various equitable causes of action and the relief available, including, as possibly referred to by the Court, defences of laches and acquiescence.    

24. When the matter was listed for hearing, the Court was advised that the Second Respondent, who was born (omitted) 1934, was then nearly 79 years of age.  The Second Respondent is now 79 years and 7 months of age.  The Second Respondent’s husband died on (omitted) 2009 and the property, the subject of this application, appears to have passed by way of survivorship into the sole name of the Second Respondent. 

25. The husband and the wife commenced their co-habitation in about 1988, married on (omitted) 1989 and separated in June 2010.  A relationship of some 21 odd years.

26. There are two adult children of their relationship, Ms J aged 22 and Ms A aged 20. 

27. Post the decision of the High Court of Australia in Stanford v Stanford [2012] HCA 52, it is clear that the Court shall not make an order under s.79(2) of the Family Law Act 1975 (“the Act”), unless it is satisfied that, in all the circumstances, it is just and equitable to make the order. Sub-section (4) prescribes the matters the Court must take into account in considering what order, if any, should be made under s.79 of the Act for the alteration of property interests between the parties. That decision also makes it clear that the requirements of s.79(2) and (4) of the Act are not to be conflated. The Court must be satisfied that it is not only just and equitable to make an order, but the order itself must be just and equitable in its terms.

28. The first step set out in Hickey v Hickey & Attorney-General of the Commonwealth (Intervener) (2003) FLC 93-143, requires the Court to identify the property liabilities and financial resources of the parties. The wife, it would appear, received a substantial inheritance from her late uncle’s Estate of some $927,000.00 which she says arose nearly some 12 months after the parties had separated.

29. The only other property of substance, apart from the real property the subject of the dispute appears to be some superannuation ($12,660.00) held by the husband; superannuation of $296,000.00 held by the wife; bank accounts of approximately $265,000.00 for the wife; motor vehicle $20,000.00 for the wife;  $10,000.00 horse float for the wife; and $4,000.00 household contents for the wife.

30. That real property was valued by Mr E (valuer) on a number of bases namely,

    As at the date of separation

    a)Disregarding the first floor addition - $1,150,000.00

    b)With the first floor addition $1,550,000.00

    As at 7 March 2014 (approximate to first day of the hearing)

    c)$1,250,000.00 without first floor addition

    d)$1,860,000.00 with the first floor addition; and

    e)$980,000.00 being the value of the first floor addition, if the property was strata titled.

    Each of those valuations referred to certain assumptions and issues concerning the availability of a garage and/or use of other space on the property.

31. The husband asserts liabilities of some $93,000.00.

32. The Court accepts Mr Gruzman’s submission that it must determine issues of legal and equitable ownership in order to determine the property pool and the determination of that issue must clearly be within jurisdiction.

33. The Court has had regard to the decision of the Full Court of the Family Court of Australia in Selan & Selan [2013] 49 FamLR 164, which referred to that Court’s exercise of any accrued jurisdiction. In that case, the Full Court was concerned as to whether there were in the circumstances, a single justiciable controversy which, in turn, required consideration of the relevant applications and evidence, with a view to determining if there was a common sub-stratum of facts.

34. Mr Gruzman submits that there is such a single justiciable controversy here.  No doubt, that controversy would involve the same parties as are before the Court today.

35. Secondly, he submits that the claims are not severable from the matrimonial cause and arise out of a common sub-stratum of facts.  Finally, he says that the Court has the power to grant appropriate remedies in respect of any of the claims, so far as they are attached claims.

36. The Court accepts that the underlying facts do not need to wholly coincide but the facts that underlie any equitable relief must be a subset of those underlying the matrimonial proceedings;  See Balceski v Balceski 2007 70 NSWLR 36. To that extent, the accrued jurisdiction extends to determining issues so as to bind a third party in any determination that a third party’s property is that of a party to the marriage.

37. Once jurisdiction is found to exist in a Court, there are somewhat limited circumstances in which a Court would decline to exercise it. 

38. However, in the circumstances of this matter, and in an analysis of the equitable issues now under consideration as referred to in these reasons, it is clear that what is sought to be exercised is the jurisdiction of a superior Court, in particular, that of the Supreme Court of New South Wales.   This Court is one of intermediate level and does not exercise the jurisdiction of a superior Court.

39. This Court has no power to transfer proceedings to the Supreme Court of NSW Equity Division.  That power must rest in the Family Court of Australia.

40. The Court is of the view that the complexity of the equitable issues now raised (identified in paragraph 20 above) call for consideration by a superior Court. 

41. It would be presumptuous of this Court to suggest to the Family Court of Australia that this matter should be dealt with by the Supreme Court of NSW. 

42. Further, as this case has developed in the short period before me, it now becomes clear that the Court could not dispose of it, in any event, within the allocated 3 day hearing time provided and that the hearing is likely to well exceed the hearing days normally provided for matters in this Court as set out in the Protocol between this Court and the Family Court of Australia.

43. In those circumstances, in accordance with Regulation 8.02 of the Federal Circuit Court Rules 2001, the Court is of the view that it will transfer these proceedings of its own motion to the Family Court of Australia for consideration by it, as to whether it will hear the matter or, in turn, consider transferring it to the Equity Division of the Supreme Court of NSW.  The Court will so order.

44. The Court will reserve all parties’ costs.

I certify that the preceding forty-four (44) paragraphs are a true copy of the reasons for judgment of Judge Kemp

Associate: 

Date:  6 May 2014