Sewell v Wilson - [2010] WASCA 152

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA

TITLE OF COURT : THE COURT OF APPEAL (WA)

CITATION: SEWELL -v- WILSON [2010] WASCA 152

CORAM: BUSS JA
NEWNES JA
MURPHY JA

HEARD: 12 MAY 2010

DELIVERED : 3 AUGUST 2010

FILE NO/S: CACV 125 of 2009

BETWEEN: JULIA KAY SEWELL
Appellant
AND
IAN WILSON
Respondent

ON APPEAL FROM:
Jurisdiction              :  DISTRICT COURT OF WESTERN AUSTRALIA
Coram  :FENBURY DCJ
Citation  :WILSON -v- SEWELL [2009] WADC 151
File No  :CIV 3056 of 2008

Catchwords:

Courts - Jurisdiction - Proceedings in District Court by former husband against former wife for breach of contract in relation to sale of former matrimonial home - Former husband claimed entitlement to 18% of proceeds of sale for work done in making house ready for sale - Admission by former husband that work was minor and 18% entitlement based on estimated outcome if proceedings brought in Family Court for property settlement - Proceedings for property settlement out of time - Whether District Court proceedings arose out of 'marital relationship' - Whether 'matrimonial cause' under Family Law Act 1975 (Cth) - Whether primary judge erred in finding District Court had jurisdiction

Legislation:

Family Law Act 1975 (Cth), s 4, s 8, s 31, s 41(3), s 44(3), s 44(4), s 79

Result:

Appeal allowed

Category: B

Representation:

Counsel:

Appellant: Mr J R Tydde
Respondent: In person

Solicitors:

Appellant: HHG Legal Group
Respondent: In person

Case(s) referred to in judgment(s):

Bate v Priestley (1989) 97 FLR 310
DMW v CGW [1982] HCA 73; (1982) 151 CLR 491
Dougherty v Dougherty (1987) 163 CLR 278
Fisher v Fisher (1986) 161 CLR 438
O'Grady v Northern Queensland Co Ltd (1990) 169 CLR 356
Perlman v Perlman (1984) 155 CLR 474
R v Federal Court of Australia; Ex parte WA National Football League (1979) 143 CLR 190
Raftland Pty Ltd v Federal Commissioner of Taxation [2008] HCA 21; (2008) 238 CLR 516
Re Ross-Jones; Ex parte Green (1984) 156 CLR 185
Rediffusion (HK) v Attorney-General (HK) [1970] AC 1136
Russell v Russell (1976) 134 CLR 495
Trustees Executors & Agency Co Ltd v Reilly [1941] VLR 110
Wilson v Sewell [2009] WADC 151
Workers' Compensation Board (Qld) v Technical Products Pty Ltd (1988) 165 CLR 642

BUSS JA: I have read the proposed reasons for decision of Newnes JA, with whom Murphy JA proposes to agree. I agree with the orders proposed by Newnes JA and, subject to the following observations, with his reasons.
On 31 August 1986, the appellant and the respondent were married. On 15 November 1990, a property at 128 Glendower Street, Perth was purchased and registered solely in the appellant's name. It was the matrimonial home until about January 2001 when the marriage irretrievably broke down. In February 2003, the parties were divorced. No application has been made by either of them under the Family Law Act 1975 (Cth) for a property settlement.
The respondent's cause of action against the appellant in the District Court proceedings was for breach of an alleged oral contract. He claimed damages. The appellant applied to strike out the proceedings on the ground that the District Court did not have jurisdiction. Fenbury DCJ dismissed the application.
The respondent pleaded in his statement of claim that on or about 11 August 2007 he and the appellant made an oral agreement whereby it was agreed:
(a)the respondent would undertake maintenance and improvement work, at his expense, on the Glendower Street property;
(b)upon completion of the work, the property would be sold; and
(c)in consideration of the respondent undertaking the work, he would receive from the appellant 18% of the net sale proceeds of the property.
The appellant denied entering into the oral contract alleged by the respondent.
In my opinion, the only finding reasonably open to the primary judge, on the affidavits relied on by the parties and the admissions made by the respondent at the hearing of the appellant's application, was that the pleaded consideration for the oral contract was false or deceptive.
This character of the pleaded consideration is apparent from the facts and circumstances set out in the reasons of Newnes JA. It is unnecessary for me to repeat them. It is sufficient to refer to par 11 of the respondent's affidavit dated 26 July 2009, which was in evidence before the primary judge, and two passages in the transcript of the hearing before his Honour.
In par 11 of his affidavit, the respondent deposes, relevantly:
The consideration was clearly far above what would be prevailing commercial rates for such work the reason being that the contract was to give effect to the agreed property settlement between the [appellant] and I.
The respondent elaborated upon this issue in the course of argument before the primary judge:
FENBURY DCJ: So there was a property settlement contemplated that never occurred.
WILSON, MR: That's correct.
FENBURY DCJ: So this matter here that's in this court and the issues that are being flagged before me so far needs to be looked at in the light of that, doesn't it? The fact that there are untaken property settlement issues ‑ or unprosecuted property settlement issues behind it?
WILSON, MR: That is correct.
FENBURY DCJ: Or do I just pretend there's nothing ‑ ‑ ‑
WILSON, MR: I determined to prosecute those in 2007 in the appropriate jurisdiction at that time. And then the contract that was instigated at the [appellant's] behest ‑ and I'll allude to that ‑ that simply rendered the proposed Family Court proceedings unnecessary, it usurped them, and that took the place of the proposed Family Court route that I had intended to take (ts 16).
A little later in the argument, the following exchange occurred:
FENBURY DCJ: And you say she agreed to pay you ‑ the agreement was, 18 percent of the net proceeds of sale of a house, worth well over a million dollars ‑ ‑ ‑
WILSON, MR: Yes.
FENBURY DCJ: ‑ ‑ ‑ to take silent account of your right, your property settlement right.
WILSON, MR: Well ‑ ‑ ‑
FENBURY DCJ: Your equitable interest in the property.
WILSON, MR: To ‑ to kill two birds with one stone, yes that's my submission. Yes, And ‑ and it was a contract, just as it was a contract and ‑ ‑ ‑
FENBURY DCJ: So doing sums ‑ ‑ ‑
WILSON , MR: ‑ ‑ ‑ this is ‑ ‑ ‑
FENBURY DCJ: ‑ ‑ ‑ about hourly rates and things is really not a ‑ not really of assistance.
WILSON, MR: Hourly rates are utterly irrelevant. All that matters, as I say, the court shouldn't embark on a inquiry as to the adequacy of the consideration, not in this context, and that would be only appropriate in relation to a quantum meruit claim.
It was intended to kill two birds with one stone. This contract ‑ ‑ ‑ (ts 22).
At the material time, 'matrimonial cause' in s 4(1) of the Family Law Act was defined to mean, relevantly:
(ca)proceedings between the parties to a marriage with respect to the property of the parties to the marriage or either of them, being proceedings:
(i)arising out of the marital relationship;
In s 4(1) of the Act, 'proceedings' is defined to mean, relevantly, a proceeding in a court, whether between parties or not. In s 4(2), a reference in the Act to a 'party to a marriage' includes a reference to a person who was a party to a marriage that has been, relevantly, terminated by divorce.
In this State, the Family Court of Western Australia has exclusive jurisdiction in relation to a 'matrimonial cause', as defined in s 4(1) of the Family Law Act.
The true or genuine consideration for the payment which, on the respondent's case, the appellant agreed to make (namely, 18% of the net sale proceeds of the Glendower Street property) was not merely the work which the respondent had agreed to undertake but, overwhelmingly, settlement of any and all claims that the respondent had or may have had against the appellant for a property settlement under the Family Law Act on the basis of their status as former spouses.

The true or genuine consideration reveals that the alleged oral contract was a contract, relevantly, for the settlement of property interests between former spouses. The District Court proceedings were, in reality:
(a)proceedings between former parties to a marriage (namely, the appellant and the respondent) with respect to the property of one of them (namely, the Glendower Street property); and
(b)proceedings arising out of the marital relationship between the appellant and the respondent, in that the cause of action was, in truth, for the enforcement of an alleged oral contract which resolved claims in respect of the property arising directly and immediately from that relationship.
The District Court proceedings were therefore a 'matrimonial cause', within par (ca)(i) of the definition in s 4(1) of the Family Law Act. The District Court does not have jurisdiction in relation to such a cause. The primary judge should have allowed the appellant's application, and dismissed the proceedings.
I note, for completeness, that the alleged oral contract would not, in any event, be enforceable as an agreement in the Family Court of Western Australia in that it was not a 'financial agreement' within the meaning of s 90D of the Family Law Act. The respondent's remedy, if any, in relation to the possible obtaining of a property settlement with the appellant is to make application to the Family Court of Western Australia for a grant of leave under s 44(3) of the Act to bring proceedings pursuant to s 79 for the alteration of property interests.
NEWNES JA: This is an application for leave to appeal from a decision of Fenbury DCJ dismissing an application by the appellant for an order that the respondent's action be struck out on the ground that the District Court had no jurisdiction to hear it. In dismissing the application, his Honour rejected the appellant's contention that the action constituted a 'matrimonial cause' within the meaning of the Family Law Act 1975 (Cth) and that it lay within the exclusive jurisdiction of the Family Court of Western Australia: Wilson v Sewell [2009] WADC 151. The appellant contends that in doing so his Honour erred.
On 17 December 2009, Pullin JA ordered that the application for leave to appeal be heard with the appeal.

Background

The appellant and the respondent were married on 31 August 1986. On 15 November 1990, a property in Glendower Street, Perth (the property) was registered in the name of the appellant. It was the matrimonial home from that time until about January 2001 when it appears the marriage broke down. In February 2003, the appellant and the respondent were divorced. No application for a property settlement under the Family Law Act was made by either party.
In 2008, the respondent, who had previously practised as a solicitor, commenced proceedings against the appellant in the District Court based on an alleged oral contract. In the statement of claim, the respondent pleads, in substance, that on or about 11 August 2007 the parties orally agreed that the respondent would undertake certain maintenance and improvement work on the property at his expense, upon the completion of the work the appellant would sell the property, and the respondent would receive 18% of the net proceeds of sale. The respondent pleads that he undertook the work in the latter part of 2007 and completed it by the end of December 2007. He alleges that the parties were unsuccessful in attempts to sell the property on a private basis between January and April 2008, and agreed to postpone the sale until after the winter months.
The respondent pleads that, on or about 18 September 2008, the appellant, in breach of the oral contract, informed the respondent that she would not sell the house or pay him an amount equal to 18% of its value. Although it is not expressly pleaded, it is evident that it is the respondent's case that he treated that conduct as a repudiation of the contract, which he accepted. In the action the respondent claims damages for breach of contract.
In her defence, the appellant pleads first, that the District Court does not have jurisdiction to determine the claim as it is a 'matrimonial cause' within the meaning of s 4 of the Family Law Act and therefore lies within the exclusive jurisdiction of the Family Court of Western Australia (the Family Court (WA)). Secondly, the appellant denies that she entered into the alleged contract with the respondent and says that the respondent orally agreed to undertake some maintenance work on the property to assist the appellant in preparing it for sale.
Following the filing of her defence, the appellant applied to have the respondent's statement of claim struck out and the action dismissed for want of jurisdiction.
The appellant's application was heard by the primary judge on 14 August 2009. His Honour dismissed the application. He found that the respondent's claim was not a 'matrimonial cause' within the meaning of the Family Law Act, concluding that the respondent's action did not arise out of the marital relationship but from the appellant's failure to fulfil her obligations under the alleged oral contract. His Honour did not accept the appellant's submission that the action was a matrimonial cause because the contract was a de facto property settlement. He found that although the alleged contract might be a de facto property settlement, that did not change the nature of the proceedings, which was an action for damages for breach by the appellant of an alleged contract for the supply of work and materials.

Grounds of appeal

There were two grounds of appeal. Ground 1 challenged the finding of the primary judge that the respondent's claim was not a 'matrimonial cause' within the meaning of s 4 of the Family Law Act. Ground 2 asserted that the primary judge erred in failing to find that the interest in the property claimed by the respondent was not enforceable as it was not evidenced in writing as required by s 34 of the Property Law Act 1969 (WA).

Disposition of the appeal

On the hearing of the appeal the second ground of appeal was not pressed and, in my view, rightly so. There is no substance in it. The only issue on the appeal, therefore, was the question of the jurisdiction of the District Court to hear the claim.
The jurisdiction of a court was described by Lord Diplock in Rediffusion (HK) v Attorney-General (HK) [1970] AC 1136 as follows:
'Jurisdiction' is the right of the court to enter upon the inquiry as to whether or not a cause of action exists in the plaintiff and, if a cause of action does exist, to grant or, if the relief is discretionary, to withhold the relief applied for. Conversely, lack of jurisdiction is absence of any right in the court to enter upon such an inquiry at all (1151).
In most cases, the jurisdiction of the court will be obvious and no issue will arise. But where a question as to jurisdiction arises, either because it has been raised by a party or it has been identified by the court, the court has the authority and duty to decide whether the dispute before it lies within its jurisdiction, and for that purpose to determine the existence or otherwise of facts on which its jurisdiction depends, but its decision is not conclusive: R v Federal Court of Australia; Ex parte WA National Football League (1979) 143 CLR 190, 215; Re Ross-Jones; Ex parte Green (1984) 156 CLR 185, 194; DMW v CGW [1982] HCA 73; (1982) 151 CLR 491, 501.
In this case, the question of jurisdiction was raised by the appellant. Whilst it is not stated to be such, the appellant's application to dismiss the action appears to have been treated by the parties as an application under O 20 r 19(1)(d) of the Rules of the Supreme Court 1971 (WA), dealing with abuse of process, or as being brought within the inherent jurisdiction of the court. Both sides adduced evidence on affidavit but there was no cross‑examination of any of the deponents. Neither party has raised any question below or on the appeal as to whether such an application was the appropriate manner in which to determine the issue of jurisdiction and it appears to have been assumed that it was. I think that for the purposes of determining this appeal that view can be accepted.
Under the Family Law Act, a 'matrimonial cause' lies within the exclusive jurisdiction of the Family Court of Australia (the Family Court): s 8, s 31. In this State, the Family Court (WA) was established by the Family Court Act 1975 (WA) (repealed) and continued by the Family Court Act 1997 (WA). The Family Court (WA) has, by proclamation dated 27 May 1976, been vested with federal jurisdiction: s 41(3) of the Family Law Act.The effect therefore is that a 'matrimonial cause' is to be brought in this State in the Family Court (WA).
A 'matrimonial cause' is defined in s 4 of the Family Law Act. It is unnecessary to set out the definition in full. The appellant relied upon the part of the definition contained in par (ca)(i), which is as follows:
(ca)proceedings between the parties to a marriage with respect to the property of the parties to the marriage or either of them, being proceedings:
(i)arising out of the marital relationship;
In s 4, 'proceedings' is defined to mean proceedings in a court. The reference to 'parties to a marriage' includes former parties to a marriage: s 4(2).
Under s 79 of the Family Law Act, the Family Court (WA) has wide powers to vary the interests in property of former parties to a marriage, taking into account a range of matters including their respective contributions (financial or otherwise) to the acquisition or improvement of the property, and their contribution to the welfare of the parties to, and children of, the marriage.
Where more than 12 months have elapsed since the parties were divorced, proceedings falling within par (ca) of the definition in s 4 can only be commenced with the leave of the Family Court (WA) or with the consent of the other party: s 44(3). Such leave will not be granted unless, among other things, the court is satisfied that hardship would be caused to a party to the marriage, or a child, if leave were not granted: s 44(4).
As I have indicated, the substantive issue on the appeal was whether the primary judge should have found that the proceedings brought by the respondent in the District Court were a 'matrimonial cause' within the meaning of the Family Law Act and therefore lay within the exclusive jurisdiction of the Family Court (WA).
The proceedings are, in my view, clearly 'with respect to the property of' the appellant, who was a party to the marriage. The phrase 'with respect to' has been described, in an oft‑cited passage, as having 'the widest possible meaning of any expression intended to convey some connection or relation between the two subject matters to which the words refer': Trustees Executors & Agency Co Ltd v Reilly [1941] VLR 110, 111; although in Workers' Compensation Board (Qld) v Technical Products Pty Ltd (1988) 165 CLR 642, 653, Deane, Dawson and Toohey JJ considered that this was 'going somewhat too far.' Their Honours pointed out that the phrase must take its meaning from its particular statutory context. Nevertheless it is 'of broad import': O'Grady v Northern Queensland Co Ltd (1990) 169 CLR 356, 374. In O'Grady, McHugh J said that it 'requires no more than a relationship, whether direct or indirect, between two subject matters' (376).
I consider that, on any view, the required nexus is plainly satisfied. The proceedings allege a contract to carry out work on the property of the appellant and to receive 18% of the net proceeds from its sale, which was to follow upon the completion of the work. The damages claim, although not particularised, falls to be assessed by reference to the amount the house would have realised had a sale taken place.
The real question is whether the appellant's proceedings are proceedings 'arising out of the marital relationship'.

The relevant part of the definition of matrimonial cause has undergone several amendments since the Family Law Act came into force on 1 January 1976. The definition of 'matrimonial cause' at that time included, in s 4(c)(1)(ii), 'proceedings with respect to … the property of the parties to a marriage of either of them'. In Russell v Russell (1976) 134 CLR 495, it was held that that provision, among others, was valid only in so far as it was ancillary to principal relief for a decree of dissolution or nullity of a marriage, or for a declaration as to the validity of a marriage or its dissolution or nullity.
Following that decision, in 1976 the definition of 'matrimonial cause' was amended, relevantly, to include:
(ca)proceedings between the parties to a marriage with respect to the property of the parties to a marriage or either of them, being proceedings in relation to concurrent, pending or completed proceedings for principal relief between those parties.
The provision was amended in 1983 to its present form, to include pre‑divorce proceedings. The constitutional validity of that provision was unsuccessfully challenged in Fisher v Fisher (1986) 161 CLR 438.
The principal authority upon which the primary judge relied in concluding that the proceedings in this case were not a matrimonial cause was Perlman v Perlman (1984) 155 CLR 474. In that case, following their divorce the parties had executed a maintenance agreement under the Family Law Act to settle once and for all the financial arrangements between them. The maintenance agreement was to be in substitution for any rights of the parties under Part VIII of the Family Law Act. The agreement was set out in a deed and approved by the Family Court pursuant to s 87 of the Family Law Act. It thereupon became effective as a final agreement. Under the agreement, the former husband was required to make certain payments to his former wife. He failed to do so and the former wife applied to the Family Court seeking an order enforcing the agreement. The Family Court held that it had no jurisdiction to make the orders sought. The former wife then commenced proceedings in the Supreme Court of New South Wales to enforce the maintenance agreement, seeking, in effect, an order for specific performance of the agreement and damages for breach. The former husband applied to strike out the proceedings on the basis that they were a 'matrimonial cause' and the Supreme Court had no jurisdiction to hear them. The High Court unanimously held that the proceedings were not a 'matrimonial cause' and accordingly the Supreme Court had jurisdiction.
It was unnecessary for the court to consider par (ca), as it then stood, but it did consider par (e) of the definition of 'matrimonial cause' and, in particular, the phrase 'proceeding … in circumstances arising out of the marital relationship (emphasis added)'.
Gibbs CJ considered that the proceedings clearly did not arise out of the marital relationship but arose from the fact that the divorced husband had failed to fulfil his obligations under the deed (486, 487). Wilson J (with whom Mason J agreed on this point) expressly declined to attempt any abstract definition of the limits of par (e) but said that the wife's claims did not focus on circumstances arising out of the marital relationship. The marriage having been dissolved in 1978 and the financial relationship of the parties being finally determined by the approved agreement, the husband's failure to respect his obligations under the agreement had nothing whatever to do with the marital relationship (500).
Deane J (with whom Brennan J agreed) considered that the agreement itself might properly be regarded as ‘arising out of the marital relationship' but the Supreme Court proceedings for the enforcement of the completed and approved agreement could not properly be regarded as so arising (507). Dawson J said that the proceedings arose out of a contractual relationship entered into after the marital relationship had been concluded by dissolution of the marriage. Whilst the dissolution of the marriage was the occasion for the contract, the circumstances in which relief was sought arose out of the contract and its breach, and not the marital relationship (511, 512).
The High Court had occasion to consider par (ca)(i) of the definition of 'matrimonial cause', in its present form, in Dougherty v Dougherty (1987) 163 CLR 278. That case concerned the intervention of an adult son in his mother's property application, giving rise to a question as to whether the son's application was a 'matrimonial cause'. In relation to par (ca)(i), Mason CJ, Wilson and Dawson JJ said:
This paragraph requires that proceedings between the parties to a marriage with respect to property should arise out of the marital relationship. By this means a limit is imposed upon the jurisdiction of the Family Court to make an order under s 79 where the parties are parties to a marriage. Proceedings of that kind which do not arise out of the marital relationship do not constitute a matrimonial cause in relation to which jurisdiction is vested in the Family Court. It may be that this limitation sufficiently confines the operation of s 79 in relation to proceedings between the parties to a marriage with respect to property and obviates the need to read the section down in its application to such cases. In any event, whether the exercise is undertaken for the purpose of applying par (ca) or reading down s 79, it should be comparatively easy to ascertain whether or not a claim by a party to a marriage for an alteration of property interests is based upon circumstances arising out of the marital relationship. Claims grounded solely in contract or tort or equity or otherwise arising by reason of a relationship, eg. of partnership, where the marriage relationship is purely coincidental are not likely to attract the power. But leaving aside matters such as those there will not be wanting occasions where the Family Court may find it just and equitable to alter the respective property interests of the parties inter se for reasons associated with and finding their source in the marriage relationship (286). (emphasis added)
The decision of the Court of Appeal of New South Wales in Bate v Priestley (1989) 97 FLR 310, was relied upon by the primary judge and by the respondent on the appeal. In that case, the parties were formerly husband and wife but the marriage had been dissolved in or about 1979. In 1979, a 'Deed or Maintenance Agreement' requiring the former husband to pay maintenance to his former wife was approved by the Family Court. In 1981, fresh proceedings were commenced in the Family Court seeking to revoke that approval. On 31 May 1984, those proceedings were settled between the parties. As part of the settlement, the former husband executed a deed entitled 'Acknowledgement of Debt' in which he agreed to pay to his former wife an amount of $50,000 on or before 1 July 1985. The recitals to the deed stated that the former wife had agreed to accept an acknowledgement of debt which could be used to found a claim in the District Court, which in turn could be used in bankruptcy proceedings. Later that day the Family Court made consent orders giving effect to the settlement by, in substance, revoking the 1979 deed and requiring the former husband to pay $50,000 by way of property settlement and/or lump sum maintenance on or before 1 July 1985. The deed was noted in the orders. The former husband did not pay the amount by the date required. The former wife brought proceedings under the deed in the District Court. The former husband objected to the jurisdiction of the District Court on the ground that the proceedings were a 'matrimonial cause' within either par (ca)(i) or (ca)(ii) of the definition in s 4(1) of the Family Law Act. The objection failed and the former husband appealed.
The Court of Appeal held (Hope AJA and Mahoney JA, Kirby P dissenting) that the proceedings were not a 'matrimonial cause'.
Mahoney JA said:
The principal argument for Mr Bate was, I think, to the effect that the proceeding to enforce the deed was a 'matrimonial cause' because the proceeding arose out of the deed and the deed arose out of the (former) marital relationship and accordingly the proceeding arose out of the marital relationship. Philosophically, the argument is irrefutable. But the claim of A arising from B arising from C … may be traced back to the Creation without philosophical error. In deciding whether, for the particular purpose before it, A is to be seen as arising from C, the test applied by the court is not philosophical but functional: cfState Rail Authority of New South Wales v Codelfa Construction Pty Ltd (1982) 150 CLR 29 at 40‑41. In Perlman v Perlman (1984) 155 CLR 474 the High Court indicated how, for the purposes of this legislation, the sequence is to be terminated. I agree with Hope AJA that, upon the approach adopted in that case, the present proceeding does not arise out of the marital relationship and so is not a matrimonial cause (325-326).
Hope AJA considered that the question was resolved by Perlman, where, although decided when the definition was in somewhat different terms, the High Court had considered the expression 'arising out of the marital relationship'. His Honour considered it was therefore authority which 'either must or should be followed'. His Honour referred to the various passages in the judgments in Perlman to which I have referred to above and continued:
In my opinion these expressions of opinion are to be applied to the words 'arising out of the marital relationship' in par (ca)(i). As it seems to me, what the High Court emphasised in Perlman was that the proceedings in the Supreme Court did not arise out of the marital relationship; the fact that the deed arose out of the marital relationship which had previously existed did not mean that the proceedings arose out of that relationship. The proceedings arose out of the deed and the failure by the defendant to carry out its terms.
It has been submitted for the defendant that there is a much closer relationship in the present case between the deed upon which the plaintiff sued and the orders of the Family Court, and hence it can be properly said that the proceedings arose out of the marital relationship. Counsel for the defendant put every argument before the court to support this submission, but in my opinion it cannot succeed. Indeed one would have thought that a deed of maintenance approved by a Family Court under s 87 would have had a much closer tie to the marital relationship than a deed such as that now sued on. It is true that in the present case the Family Court ordered the payment of the sum of $50,000 on or before 1 July 1985 by way of property settlement and/or lump sum maintenance, that the plaintiff can still enforce that order by the various means available under the Family Law Act and Regulations, and that the deed was expressly entered into to provide additional remedies for the plaintiff to ensure that payment of that sum. Nonetheless the proceedings arose out of the deed and not otherwise. They did not arise out of the marital relationship which led to proceedings in the Family Court and to the execution of the deed. The parties themselves expressly intended that the deed should provide remedies outside those available under the Family Law Act and Regulations including proceedings in the District Court and in bankruptcy … The Family Court noted the terms of the deed in its orders and in deciding to revoke the previously approved maintenance agreement presumably accepted the right of the wife to enter into a deed which gave her remedies outside those provided by the Family Law Act and Regulations. It would be unfortunate if this Court had to decide that both the parties and the Family Court were wrong. I do not think that it has to do so (329).
Kirby P dissented, concluding that the proceedings fell squarely within par (ca). His Honour, having acknowledged that it was the proceedings which must be classified, not the deed, continued:
But the deed clearly and immediately arose out of the marital relationship and the proceedings arise out of the deed. It cannot be left to the parties, by executing a deed, to circumvent the provisions conferring exclusive jurisdiction on the Family Court where, objectively examined, the proceedings are properly classified as falling within one of the definitions of 'matrimonial cause' reserved to that Court (324).
Kirby P rejected the proposition that it was relevant that the parties had themselves expressly provided for remedies outside the Family Law Act:
It is not for the parties, by their arrangements, to determine the proper legal classification of proceedings in a matter so important as the assignment of the proceeding, including to the exclusive jurisdiction of a special court. That assignment, the law does (324).
In the present case, it was submitted on behalf of the appellant that Pearlman and Bate v Priestley were both distinguishable on their facts. The District Court proceedings fell within the definition of 'matrimonial cause' as the property was purchased during the marriage and it is the distribution of the value of that property which is the subject of the proceedings. Counsel for the appellant argued that it was clear, both from the respondent's affidavit and from statements made by him during the course of the hearing before the primary judge, that his claim was simply intended to be in substitution for a property settlement under the Family Law Act. Counsel referred to correspondence and other documents in the first half of 2007, in which the respondent had asserted an intention to proceed with an application to the Family Court (WA) for a property settlement and in which he had expressed the view that he would be awarded something between 15% and 18% of the value of the property.
Counsel for the appellant also pointed out that in argument before the primary judge, the respondent had described the contract as 'a means of not having to proceed with the intended Family Court action that I had made clear I was going to pursue' (ts 17). Reference was also made to an exchange between the primary judge and the respondent later in the course of the respondent's submissions. After the respondent had made a submission that the consideration for the agreement had been provided, in that the contract work had been carried out, the following exchange had occurred (ts 26):
FENBURY DCJ: But that's ‑ in a sense that's a sham ‑ in a sense, isn't it? Because it wasn't about 18 per cent for work and labour in reality. It was about 18 per cent because that was close enough, or close to what you ‑ your equitable interest in the property.
WILSON, MR: That's why the contract was struck at that amount, yes.
…
FENBURY DCJ: That's why you sought 18 per cent.
WILSON, MR: Well, that's why we both agreed that 18 per cent was the appropriate consideration in respect of this contract, yes.
FENBURY DCJ: Because it dealt with what you both knew was your equitable interest in the family home.
…
FENBURY DCJ: That's what you say, isn't it?
WILSON, MR: I would have assessed, having practised family law to an extent ‑ I certainly don't profess to be an expert in it, but it would be my contention that under family law principles I would have a ‑ perhaps a somewhat higher entitlement; a few percentage higher, not much, nothing that that I would be particularly worried about or that would encourage me to head down the Family Court route with the vagaries of that jurisdiction and also the time factors involved. So I was content to accept 18 per cent and enter into a contract on that basis, as was the [appellant] at that time.
The appellant also relied on affidavits filed by the respondent in opposition to the appellant's application in which the respondent admitted that the amount of 18% of the value of the property was never intended to represent the value of the work and materials expended on it by the respondent. In an affidavit of 26 July 2009, the respondent said that the remuneration for performing the works 'was clearly far above … prevailing commercial rates for such work the reason being that the contract was to give effect to the agreed property settlement between the [appellant] and I' [sic]. Counsel for the appellant noted that, based on the statement in the respondent's affidavit of 1 February 2009 that he had spent at least 150 hours carrying out the work, the respondent's claim to be entitled to 18% of the value of the property (an amount of some $265,500) worked out at an hourly rate of $1,770. The appellant referred to relevant industrial awards where, for work of a similar nature, the hourly rates ranged from $16.37 to $20.16.
It was submitted by the respondent that the appellant's case failed to appreciate the distinction between proceedings which arise out of the marital relationship and proceedings for damages for breach of contract. It was not enough that the property which is the subject of the contract is owned by a party to the marriage. The question is whether the proceedings arise out of the marital relationship. In this case, they did not; they arose out of the appellant's breach of contract. It was not to the point that the contract 'killed two birds with one stone' ‑ it achieved a property settlement which would otherwise have required a successful application to the Family Court (WA) for leave under s 44(3) of the Family Law Act and it remunerated the respondent for the work done (albeit, he accepted in argument on the appeal that the amount recoverable for the work on a quantum meruit basis would have been 'something relatively inconsequential' (ts 29)). Nor, he argued, was it to the point that it simply replaced the foreshadowed application to the Family Court (WA) - that it represented what he described in argument below as 'a change of tack' (DCt, ts 35). The appellant's objection to jurisdiction must fail, it was argued, because the proceedings did not arise out of the marital relationship but out of a breach of contract by the appellant.
I do not accept that contention. It may not be of any real assistance to describe the alleged contract as a 'sham', although the respondent did not appear to take issue with the primary judge's description of it in those terms. As the plurality pointed out in Raftland Pty Ltd v Federal Commissioner of Taxation [2008] HCA 21; (2008) 238 CLR 516 [35], the term is ambiguous and uncertainty surrounds its meaning. It is apparent, however, from the admissions made by the respondent that the alleged contract was not, in truth and substance, a contract for labour and materials as pleaded. In reality, the contract was a settlement of the respondent's claim to an interest in the property arising out of the marital relationship. The figure of 18% represented what the respondent considered would be approximately the amount he would be awarded on a property settlement under the Family Law Act. To that end, he apparently perceived it to be in his interest to carry out some improvements to the property to maximise its value. The contract was, as the respondent frankly admitted before the primary judge, simply a means of recovering the amount he considered he was entitled to arising out of the marital relationship, while at the same time avoiding what he perceived to be the vagaries and time involved in proceedings for a property settlement in the Family Court (WA).
It is plain, in my view, that the proceedings in the District Court are in substance proceedings with respect to the property to recover the benefit to which the respondent alleges he is entitled arising from the marital relationship. The proceedings have arisen because the appellant declined to sell the property and give the respondent the 18% of the proceeds which he considered constituted that entitlement.

In my respectful view, the primary judge erred in concluding that the decision in Perlman was decisive in this case. The circumstances in Pearlman were quite different. In that case, the issue of the distribution of the marital property had come to an end in a final agreement approved by the Family Court and what was sued on was that final agreement. Whilst the marital relationship had given rise to the issue of the distribution of the marital property and to the agreement, the marital relationship itself was no longer relevant to the proceedings in the Supreme Court to enforce the final agreement.
Similarly, in Bate v Priestley the District Court proceedings were brought on a deed following the resolution of the entitlements of the parties in respect of the marital property in Family Court proceedings and, moreover, in making its orders pursuant to the settlement the Family Court had noted that the deed expressly providing for remedies outside the Family Court. As Hope AJA observed, in revoking the previous agreement the Family Court presumably accepted the right of the wife to enter into a deed which gave her remedies outside the Family Law Act (329).
In the present case, on the other hand, the proceedings brought by the respondent are simply intended to circumvent the need for proceedings in the Family Court (WA) to resolve the respective rights of the parties to the property arising out of the marital relationship.
The respondent also argued that at the time the contract was entered into the Family Court (WA) did not have jurisdiction with respect to the marital property because the 12 month period specified in s 44(3) had elapsed and any application for a property settlement could be brought only with the leave of that court or by consent.
I do not consider there is any merit in that submission. The Family Court (WA) clearly continued to have jurisdiction. The fact that, because of the lapse of time, the leave of the Family Court (WA) had to be

obtained before the respondent could invoke the jurisdiction did not mean that the Family Court (WA) had ceased to have jurisdiction.
In my opinion, the proceedings in the present case are a 'matrimonial cause' within the meaning of s 4 of the Family Law Act and therefore not within the jurisdiction of the District Court.
Finally, the respondent filed a notice of contention in which he sought to uphold the decision of the primary judge on the grounds first, that the Family Court (WA) had no jurisdiction, and secondly, that the court should not decide preliminary questions of law where there are relevant factual matters in dispute. There is no substance in the first contention for the reasons I have given. Nor is there any substance in the second. As the question of jurisdiction had been raised it plainly had to be determined. It is not clear whether the respondent contends that the issue of jurisdiction should have been determined in some other manner or whether, as seems to be the case, he contends that the action should proceed to trial for the issue of jurisdiction to be determined at that point. In any event, the respondent has not identified the relevant factual matters said to be in dispute and I am not satisfied that there are any. As I have said, on the basis of the respondent's own admissions the proceedings are a 'matrimonial cause'. In my view, there is no merit in the notice of contention.

Conclusion

I would:
1.grant leave to appeal;
2.dismiss the notice of contention;
3.allow the appeal;
4.set aside the decision of the primary judge; and
5.dismiss the respondent's action against the appellant.
MURPHY JA: I agree with the orders proposed by Newnes JA, for the reasons given by Newnes JA.