Sievers v Sievers
[2015] FCCA 3326
•18 December 2015
FEDERAL CIRCUIT COURT OF AUSTRALIA
| SIEVERS v SIEVERS | [2015] FCCA 3326 |
| Catchwords: WORDS AND PHRASES – “the interests of the administration of justice” – “associated matter”. |
| Legislation: Federal Circuit of Australia Court Act 1999, s.39 |
| Macks v Edge (2006) 156 FCR 302 Tait v Merlo [2007] FMCA 780 Combis, Trustee of the Property of Peter Jensen (Bankrupt) v Jensen (No 2) (2009) 181 FCR 178 Keldote Pty Ltd v Riteway Transport Pty Ltd (2010) 195 IR 423 SZRIQ v Federal Magistrates Court of Australia (2013) 139 ALD 252 SZUWX v Minister for Immigration & Border Protection [2015] FCA 1389 |
| Applicant: | CAROLYN NATALIE SIEVERS |
| Respondent: | CRAIG BOYD CLARK SIEVERS |
| File Number: | SYG 617 of 2015 |
| Judgment of: | Judge Cameron |
| Hearing dates: | 7 August, 27 November and 7 December 2015 |
| Date of Last Submission: | 7 December 2015 |
| Delivered at: | Sydney |
| Delivered on: | 18 December 2015 |
REPRESENTATION
| Counsel for the Applicant: | Mr D.E. Grieve QC on 27 November 2015 |
| Solicitor Advocates for the Applicant: | Ms S. Nash of O’Neill Partners as agent of McCabe Partners on 7 August 2015 Ms J. Aherne of O’Neill Partners as agent of McCabe Partners on 7 December 2015 |
| Solicitors for the Applicant: | McCabe Partners |
| The Respondent appeared in person |
ORDERS
The matter be transferred to the Family Court of Australia.
The costs of this matter be reserved for determination by the Family Court of Australia.
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT SYDNEY |
SYG 617 of 2015
| CAROLYN NATALIE SIEVERS |
Applicant
And
| CRAIG BOYD CLARK SIEVERS |
Respondent
REASONS FOR JUDGMENT
These reasons concern the respondent’s application in a case filed on 4 August 2015 in which he seeks an order that this matter be transferred to the Family Court of Australia.
Background
The applicant and respondent are, respectively, mother and son. Following failure of an agreement concerning a proposed intergenerational transfer of the family farming property, the respondent commenced equity proceedings in the Supreme Court of NSW (“equity proceedings”). The equity proceedings were subsequently transferred to the Family Court where the respondent succeeded at trial. The applicant successfully appealed to the Full Court of the Family Court and an application for special leave to appeal to the High Court was dismissed.
The present proceedings arise out of an order for costs made by the Full Court of the Family Court consequent upon the applicant’s successful appeal in the equity proceedings. By an order dated 7 November 2014 those costs were quantified in the sum of $54,902.79. The amount was not paid and a bankruptcy notice based on that debt was served on the respondent on 19 January 2015. The respondent did not comply with the bankruptcy notice and on 12 March 2015, relying on that failure, the applicant commenced the present proceedings by filing a creditor’s petition.
The respondent filed a notice opposing the granting of the creditor’s petition on the following grounds:
1.An arrangement for settlement of the debt was discussed with the applicant creditor’s solicitor and later put into a document.
2.The debtor has a previously filed set-off and cross demand exceeding the amount claimed by the creditors petition.
3.The debtor is the administrator of his late fathers estate … and claims the applicant creditor has used funds contrary to court orders made 27 Jan 2010 in respect to the DC & CN Sievers partnership and also in respect to the estate of the late [respondent’s father].
4.The debtor is a beneficiary of his late fathers estate and the benefit will exceed the applicant creditors claim. (errors in original)
Before he died on 12 July 2010 the applicant’s husband, and the respondent’s father, commenced family law property settlement proceedings against the applicant. That matter is pending in the Family Court. At some point the respondent was joined as a party to that application. He advised the Court that this was because he was bringing a claim against his parents for underpayment of wages in respect of periods when he worked on the family property. He said that his claim was in the order of $600,000.
On 11 September 2014 the respondent was granted letters of administration of his father’s estate and so now has carriage of the estate’s case in the Family Court, as well as being a party to it in his own right.
Evidence and submissions
In his affidavit of 4 August 2015 filed in support of his application in a case, the respondent deposed that the estate had put up for sale that part of the family property which it owned, the other part of the property being owned by a company whose shareholders are the applicant and the estate. The respondent deposed that the net proceeds distributable to him in accordance with his father’s will would exceed $100,000, from which he could pay the applicant the costs she is owed. He expressed his concern that if he were bankrupted he might be removed as administrator of the estate and that fees which a new administrator might charge would needlessly deplete the estate.
The respondent submitted that it would be best if all matters were dealt with in one forum and argued that the applicant would not be disadvantaged by the transfer of this matter to the Family Court.
For her part, the applicant submitted that payment of the judgment debt on which the bankruptcy notice was founded had not been stayed, no application to set aside the bankruptcy notice had been made and there was no evidence that the respondent was able to pay the debt in full within a reasonably short time or even that he was solvent. The applicant further submitted that there was no evidence that the respondent had a real claim against her which was likely to succeed.
Additionally, the applicant pointed to the fact that the Family Court proceedings has been on foot since 2007 and a hearing date has not yet been set, with the prospect that there would be no judgment during the validity of the creditor’s petition, even if its validity were to be extended by twelve months.
Statutory provisions
The Federal Circuit of Australia Court Act 1999 (“Act”) relevantly provides:
39 Discretionary transfer of proceedings to the Federal Court or the Family Court
(1)If a proceeding is pending in the Federal Circuit Court of Australia, the Federal Circuit Court of Australia may, by order, transfer the proceeding from the Federal Circuit Court of Australia to the Federal Court or the Family Court.
(2)The Federal Circuit Court of Australia may transfer a proceeding under this section:
(a) on the application of a party to the proceeding; ...
….
(4)In deciding whether to transfer a proceeding to the Family Court under subsection (1), the Federal Circuit Court of Australia must have regard to:
(a)any Rules of Court made for the purposes of subsection 40(4); and
(b)whether proceedings in respect of an associated matter are pending in the Family Court; and
(c)whether the resources of the Federal Circuit Court of Australia are sufficient to hear and determine the proceeding; and
(d) the interests of the administration of justice.
…
The Federal Circuit Court Rules 2001 (“Rules”) relevantly provide:
8.02 Transfer to Federal Court or Family Court
(1)The Court may, at the request of a party or of its own motion, transfer a proceeding to the Federal Court or the Family Court.
(2)Unless the Court otherwise orders, a request for transfer must be made on or before the first court date for the proceeding.
…
(4)In addition to the factors required to be considered by the Court under subsections 39(3) and (4) of the Act for transfer of proceedings to the Federal Court or the Family Court, the following factors are relevant:
(a)whether the proceeding is likely to involve questions of general importance, such that it would be desirable for there to be a decision of the Federal Court or the Family Court on one or more of the points in issue;
(b)whether, if the proceeding is transferred, it is likely to be heard and determined at less cost and more convenience to the parties than if the proceeding is not transferred;
(c)whether the proceeding will be heard earlier in the Court;
(d)the availability of particular procedures appropriate for the class of proceeding;
(e)the wishes of the parties.
Section 35A of the Bankruptcy Act 1966 relevantly provides that this Court may transfer proceedings under that Act to the Family Court which will, upon that transfer, have jurisdiction to hear and determine those proceedings.
Cases
In Macks v Edge (2006) 156 FCR 302, before his estate was sequestrated the husband transferred certain assets to his wife. The couple had also entered into what purported to be a Binding Financial Agreement under the Family Law Act 1975. The trustee of the husband’s bankrupt estate brought proceedings against the wife in the Federal Court of Australia seeking to have the transactions set aside as void. Meanwhile, the wife sought a ruling from the Family Court that the purported Binding Financial Agreement was valid. The wife applied to the Federal Court for the transfer of the trustee’s action to the Family Court. In refusing that application, Besanko J said:
… whether the order for transfer should be made comes down to whether it is appropriate in the exercise of the discretion to make the order for transfer. This Court can hear and determine the trustee’s claim, but it cannot hear and determine Mrs Edge’s claim should it become necessary to do so. If I make the order for transfer, the Family Court can hear and determine both claims. That is a powerful reason for making an order for transfer. On the other hand, the proceedings in this Court are nearly ready for hearing and, so far as I can see, involve some fairly concise issues. The hearing of the trustee’s claim should not take very long. If the trustee’s claim is unsuccessful, there will be no need for Mrs Edge to pursue the claim against the trustee in the Family Court. On balance, I am of the opinion that the proceedings should not be transferred to the Family Court. (at 312 [42])
In Tait v Merlo [2007] FMCA 780 the respondent was alleged to owe a sum to certain solicitors who consequently filed a creditor’s petition. The respondent disputed having instructed those solicitors. It is not clear but the costs appear to have related to an interlocutory costs order made in Family Court property proceedings between the respondent and her husband. Those proceedings were still pending at the time the creditor’s petition was filed and the Family Court had ordered that the costs were not payable until the conclusion of the proceedings before it. In ordering the transfer of the creditor’s petition proceedings to the Family Court, McInnis FM said:
On the material before me I find that it is more likely than not that the distribution from the property pool in the Family Court proceedings is likely to result in an amount paid to the Respondent Debtor of an amount in excess of the claim by the creditor in the current Petition. The Court does not have sufficient information to make a proper assessment of the claimed indebtedness to the Supporting Creditor. Even if I am incorrect in that assessment then in my view having regard to the complexity of the issue before the Family Court and the significant and extensive nature of the property together with issues concerning valuation and the like, it would be more appropriate for that matter to be determined by the Family Court and for this Creditors Petition to then be determined by that Court. (at [17])
In Combis, Trustee of the Property of Peter Jensen (Bankrupt) v Jensen (No 2) (2009) 181 FCR 178, Collier J observed:
Finally, while the issue in these proceedings relates to bankruptcy in which this Court has clear jurisdiction, it is equally the case that, following the enactment of the Bankruptcy and Family Law Legislation Amendment Act 2005 (Cth), the Family Court has jurisdiction to entertain these proceedings. Indeed as the Attorney-General explained in the Second Reading Speech in respect of the bill in the House of Representatives, the purpose of the amendments to the Bankruptcy Act and the Family Law Act was to:
enable concurrent bankruptcy and family law proceedings to be brought together in a court exercising family law jurisdiction, to ensure that all issues are dealt with at the same time. … (at 199 [64])
Consideration
The question underlying the present interlocutory application is whether this Court or the Family Court would be the better forum for a decision on the creditor’s petition. The criteria which have to be applied have been quoted earlier. It can be said at this point that none of the considerations identified in r.8.02(4) of the Rules support a transfer of the matter to the Family Court. There is no matter of general importance, questions of convenience do not favour transfer given the delay and additional costs involved, the matter is unlikely to be heard more quickly in the Family Court, the Family Court’s procedures are not relevantly different from this Court’s and one of the two parties opposes the transfer.
The criteria set out in s.39 of the Act are more relevant to the present matter, specifically whether associated proceedings are pending in the Family Court and whether the interests of the administration of justice favour transfer. There is no issue that this Court has the resources to hear this matter.
The reference in s.39(4)(b) of the Act to “an associated matter ... pending in the Family Court” may be a reference to the possibility that the Family Court would have jurisdiction over a matter transferred from this Court because the two matters are associated with each other. If the matters were associated the Family Court would have jurisdiction over the transferred matter even if it would not otherwise have had such jurisdiction: s.33 Family Law Act 1975. It is not necessary to reach a concluded view on that question because the Family Court would have the necessary bankruptcy jurisdiction upon a transfer of this matter to it: s.35A Bankruptcy Act 1966.
For present purposes it is sufficient to observe that whether matters are associated with each other is a question of fact and degree. For instance, “associated matter” includes a federal matter which arises out of facts which are closely connected with those involved in the determination of another federal matter: Keldote Pty Ltd v Riteway Transport Pty Ltd (2010) 195 IR 423 at 451 - 456 [106] – [125], 457- 458 [133] – [136]. The present matter concerns a costs debt arising from a dispute over a deed. The matter in the Family Court concerns the adjustment of property rights between the applicant and the estate of her late husband and also whether the estate, and perhaps the family company, owes a debt to the respondent. The controversies which make up those matters are separate and distinct, notwithstanding that they concern much the same property and both involve the applicant and the respondent. Consequently, I find that the criterion for transfer found in s.39(4)(b) of the Act is not satisfied.
The remaining question to be determined is whether, in the interests of the administration of justice, the matter should be transferred. The respondent’s grounds of opposition to the petition become significant in this context. Relevantly, the respondent alleges that he has a cross claim whose amount exceeds the amount cited in the bankruptcy notice and that the amount he is likely to receive from his father’s estate also exceeds the debt grounding the bankruptcy notice. Although the matters are not “associated”, had they been commenced in the same court it is likely that they would have been dealt with together. While it cannot be doubted that the applicant is entitled to be paid, it would be misleading to characterise her as a third party creditor and so she should not be treated as one.
The expression “the interests of the administration of justice” is not defined or confined by the Act except to the extent that the Act’s requirement that other considerations be taken into account, such as those prescribed by the Rules, limits in a practical sense the scope of the matters to which regard must be had when considering what the interests of the administration of justice require in a particular case where transfer is sought. It is therefore for the Court to determine what considerations are relevant to s.39(4)(d) and to the exercise of the discretion by reference to that criterion: SZRIQ v Federal Magistrates Court of Australia (2013) 139 ALD 252 at 262 [52]; SZUWX v Minister for Immigration & Border Protection [2015] FCA 1389 at [56] – [57]. In this case, noting all the other matters which the Act and the Rules require the Court to consider, I conclude that regard should be had to the existence of the Family Court proceedings and to the significance which this case may have for those proceedings. I consider those issues to be of decisive significance.
I have concluded that, on balance, the interests of the administration of justice favour the present matter being transferred to the Family Court. I have done so because the proceedings in the Family Court are not resolved and it is likely that sequestration of the respondent’s estate would have a material effect on the progress of those proceedings. I think it inappropriate that this Court should take a step which may have an adverse effect on proceedings in the Family Court when the Family Court would have, following transfer, jurisdiction to consider and decide the issue itself. In that regard I also note the following matters:
a)the debt in question is only one aspect of a family dispute over certain identified property. In most cases, it would be thought that all issues would be best addressed in one set of proceedings and I am not persuaded that there is any compelling reason why a similar view should not be taken of this dispute;
b)on 7 December 2015 the respondent advised the Court that the entirety of the family’s farm, being the estate’s portion and the family company’s portion, were on the market and it seems that a sale was anticipated. The applicant’s representative was unable to advise whether or not that advice was accurate and noted that the applicant had not adduced evidence to support it. Whether or not the respondent’s advice was accurate, as long as the Family Court proceedings remain unresolved the position will be fluid and the Family Court will be better placed than this Court to decide issues concerning the parties’ assets; and
c)as the applicant correctly submitted, in these proceedings there is a want of evidence concerning the respondent’s claim to an amount in respect of unpaid wages. This Court is in no position to assess whether that claim made in the property settlement proceedings has a likelihood of success. To the extent that there is any evidence of that sort, it would be with the Family Court, which can assess the claim’s prospects.
Finally, I note the applicant’s concerns set out earlier at [10] regarding the age of the Family Court proceedings. Respectfully, I do not believe that those proceedings cannot be finalised during any extended life of the creditor’s petition should the Family Court consider that justice requires it.
As I have concluded that the issues raised by these proceedings are better determined in the Family Court, and given that the respondent is unrepresented and I infer is unfamiliar with the Rules, I also find it is appropriate to dispense with compliance with r.8.02(2) of the Rules.
Conclusion
There will be an order that this matter be transferred to the Family Court.
There will be a further order that the costs of this matter be reserved for determination by the Family Court.
I certify that the preceding twenty-seven (27) paragraphs are a true copy of the reasons for judgment of Judge Cameron
Associate:
Date: 18 December 2015
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