Van Wyk & Sparks and Anor
[2007] FamCA 495
•29 May 2007
FAMILY COURT OF AUSTRALIA
| VAN WYK & SPARKS AND ANOR | [2007] FamCA 495 |
| FAMILY LAW - JURISDICTION - Proceedings between parties before Family Court and Supreme Court - Supreme Court proceedings stayed - Whether Family Court should exercise its accrued jurisdiction - Consideration of delay and cost to parties |
| Family Law Act 1975 (Cth) ss 34, 78, 79, 80 & 90AE Phillip Morris Inc v Adam P Brown Male Fashions Pty Ltd (1981) 148 CLR 457 |
| APPLICANT: | MR VAN WYK |
| RESPONDENT: | MS SPARKS |
| SECOND RESPONDENT: | MR SPARKS |
| FILE NUMBER: | ADF | 895 | of | 2004 |
| DATE DELIVERED: | 29 May 2007 |
| PLACE DELIVERED: | Adelaide |
| JUDGMENT OF: | BURR J |
| HEARING DATE: | 3 May 2007 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | MR McGINN |
| SOLICITOR FOR THE APPLICANT: | JEREMY MOORE AND ASSOCIATES |
| COUNSEL FOR THE RESPONDENT: | MR BERMAN |
| SOLICITOR FOR THE RESPONDENT: | MINTER ELLISON |
COUNSEL FOR THE SECOND RESPONDENT: | MR WHITTLE |
| SOLICITOR FOR THE SECOND RESPONDENT: | WALLMANS |
IT IS NOTED IN CONNECTION WITH THESE ORDERS that the Judgment of the Court delivered this day will for all publication and reporting purposes be Referred to as Van Wyk & Sparks.
Orders
That paragraphs 2, 3, 4 and 6 of the husband’s Amended Amended Application for Final Orders filed 1 May 2006 be dismissed.
That paragraph 1 of the wife’s Form 2 application filed 16 March 2006 be dismissed.
| FAMILY COURT OF AUSTRALIA AT ADELAIDE |
FILE NUMBER: ADF 895 of 2004
| MR VAN WYK |
Applicant
And
| MS SPARKS |
Respondent
And
| MR SPARKS |
Second Respondent
REASONS FOR JUDGMENT
Introduction
Proceedings are presently before this court between the applicant husband and respondent wife with respect to both parenting and financial orders.
The applicant husband has also brought proceedings in the Supreme Court of South Australia, against the respondent wife, second respondent and the company incorporated by the parties. He seeks orders in relation to the company and partnership conducted by the parties and land held by the respondents.
The applicant husband also seeks orders relating to the company, partnership and land in this court by way of property settlement.
Upon the application of the applicant husband, the Supreme Court proceedings have been stayed.
This matter comes before me to determine whether this court should exercise its accrued jurisdiction to determine the whole issue.
Background to proceedings
The respondent wife and the second respondent married in 1985.
According to the respondent wife, she and the second respondent entered a partnership in 1987 to carry on a business of organic dairy farming and production of dairy products.
The respondent wife and second respondent purchased a farm property in M and moved onto the property in January 1988.
In 1988 the respondent wife and second respondent established P Business.
The applicant husband arrived at the farm in November 1988.
According to the applicant husband, in 1989 the applicant, respondent and second respondent entered into a partnership. It appears this is an issue of some dispute.
In February 1990 the respondent wife and second respondent divorced.
In June 1990 the applicant husband and respondent wife married.
In December 1991 the applicant husband and respondent wife divorced.
On 13 April 1992 the respondent wife and second respondent remarried.
In 1995 the wife and second respondent established a company known as B Pty Ltd, from which the business P is run. The applicant, respondent and second respondent were appointed directors and were shareholders in the company.
The applicant left the P property in 2003.
In April 2004 the applicant ceased to be a director of the company upon resolution at a general meeting of P Business.
The partnership between the applicant, the first and second respondents was dissolved on 7 May 2004 when the applicant gave written notice to the respondents.
On 18 May 2004 the husband commenced proceedings in the Supreme Court of South Australia seeking the following relief:
20.1An order for the winding up of B Pty Ltd ACN … or such other Order and/or relief the Court thinks fit pursuant to Section 232 of the Corporations Act.
20.2A declaration that the Partnership of the First and Second Respondents and the Applicant was dissolved on … May 2004.
20.3An account of the affairs of the Partnership of the First and Second Respondents and the Applicant.
20.4An order directing the sale of property situated at P held by the respondents comprised in Certificate of Title Register Book Volume … Folio … and Certificate of Title Register Book Volume … Folio … .
On 3 June 2004 the applicant husband filed a Form 1 application in the Family Court seeking final parenting and financial orders. The husband sought the following financial order:
21.1That the Husband receive such lump sum as this Honourable Court thinks fair and equitable by way of matrimonial settlement.
On 22 November 2004 the husband filed an Amended Statement of Claim in the Supreme Court in which he sought the following:
“ 31. An order for the winding up of the company, pursuant to the Corporations Act sections 232, 233, 461 and on the just and equitable grounds and in the inherent jurisdiction of the Court.
32. A declaration that the partnership was dissolved on 7 May 2004, such declaration to be made pursuant to the Partnership Act section 35 and the Supreme Court Act section 31.
33. The appointment of a receiver to the Partnership Act section 39.
34. An order for the winding up of the affairs of the partnership and an account and inquiry pursuant to the Partnership Act sections 28, 29, 39, 42 and 44.
35. A declaration that the second defendants [the first and second respondents] are constructive trustees of the land for themselves and the plaintiff and hold the land on trust for themselves and the plaintiff in proportions to be determined by the Court (such declaration pursuant to section 31 of the Supreme Court Act).
36. Vesting and any other consequential orders.”
On 5 December 2005 the husband by Notice for Specific Direction sought orders that the proceedings in the Supreme Court be stayed pending the determination of the Family Court.
On 16 January 2006 the husband filed an Amended Application for Final Orders in this Court.
On 1 May 2006 the husband filed an Amended Amended Application for Final orders. The husband now seeks the following orders:
“1.That the Applicant Husband be granted an extension of time in which to institute proceedings in relation to matrimonial property settlement.
2.That the following be joined as third parties to these proceedings:
2.1the Respondents’ husband […];
2.2the company [B] Pty Ltd (ACN […])(“the company”)
3.That this Honourable Court pursuant to the exercise of its accrued jurisdiction make the following order:-
3.1An order for the winding up of the company, pursuant to the Corporations Act sections 232, 233, 461 and on just and equitable grounds and in the inherent jurisdiction of the Court.
3.2A declaration that the partnership between the Applicant […], the Respondent, […] and […] was dissolved on […] May 2004, such declaration to be made pursuant to the Partnership Act section 35 and the Supreme Court Act section 31.
3.3The appointment of a receiver to the Partnership Act section 39.
3.4An order for the winding up of the affairs of the partnership and an account and inquiry pursuant to the Partnership Act sections 28, 29, 39, 42 and 44.
3.5A declaration that the second defendants […] and […] are constructive trustees of the land for themselves and the plaintiff and hold the land on trust for themselves and the plaintiff in proportions to be determined by the Court (such declaration pursuant to section 31 of the Supreme Court Act).
3.6Vesting and any other consequential orders.
4.In the alternative to the orders sought in paragraph 3 hereof and pursuant to the accrued jurisdiction of this Honourable Court and/or pursuant to s 78 of the Family Law Act:-
4.1That the company and all assets of the partnership “[First and Second Respondents] and [the Applicant]” (“the partnership”) be declared the joint property of the Applicant Husband, the Respondent Wife and [Second Respondent].
4.2That the land wholly described in Certificate of Title Register Book Volume […] Folio […] and known as [P], South Australia (“the former matrimonial home”) be declared the joint property of the Applicant Husband, the Respondent Wife and [Second Respondent].
4.3That the Applicant Husband transfer all of his shares in the company to the Respondent Wife and [Second Respondent] in exchange for such fair and equitable sum as this Honourable Court deems fit.
5.That by way of settlement of property pursuant to s79:-
a)That the husband receive such lump sum from the wife as this Honourable Court thinks just and equitable.
That the husband be granted leave if necessary to further amend this application upon completion of Valuation reports.
b) That the Applicant husband on receipt of such sum referred to in paragraph 5(a) herein, transfer any right or interest in law and equity in the former matrimonial property, the company and partnership to the wife.
6.That pursuant to the Corporations Act 2001 an Order for the winding-up or the Company pursuant to sections 232, 233 and 461 of the said Act and/or on the just and equitable grounds and in the inherent jurisdiction of the Court.”
Upon the application of the applicant husband in a hearing in the Supreme Court on 26 May 2006, Judge Withers ordered a stay of the proceedings in the Supreme Court until further order to allow this Court to made determinations regarding the applications for an extension of time and exercise of this Court’s accrued jurisdiction.
On 13 February 2007 Judicial Registrar Forbes ordered by consent that the Applicant husband be granted leave to issue property proceedings out of time.
Accrued Jurisdiction
Accrued jurisdiction was explained by Barwick CJ in Phillip Morris Inc v Adam P Brown Male Fashions Pty Ltd (1981) 148 CLR 457 at 475 in the following terms:-
"It is settled doctrine in Australia that when a court which can exercise federal jurisdiction has its jurisdiction attracted in relation to a matter, that jurisdiction extends to the resolution of the whole matter. This accrued federal jurisdiction is not limited to matters incidental to that aspect of the matter which has in the first place attracted federal jurisdiction. It extends, in my opinion, to the resolution of the whole matter between the parties. This accrued jurisdiction carries with it the authority to make such remedial orders as are necessary or convenient for or in consequence of that resolution. For this purpose, the court exercising federal jurisdiction may enforce rights which derive from a non-federal source.”
Accrued jurisdiction was further considered by the High Court in Fencott v Muller (1983) 152 CLR 570; Stack v Coast Securities (No. 9) Proprietary Limited (and Others) (1983) 154 CLR 261 and Re Wakim; Ex Parte McNally & Ors(1999) 198 CLR 511.
It is now settled, in light of the decision of the Full Court in Warby and Warby (2002) FLC 93-091, that the Family Court of Australia may exercise accrued jurisdiction “...to determine the non-federal aspects of a justiciable controversy of which the family law claim or cause of action forms a part. The factual circumstances of the case will determine whether the jurisdiction arises and whether it is appropriate to exercise the jurisdiction.” (at 88, 790).
The Full Court, at 88,790, in concluding that the Family Court can exercise accrued jurisdiction, stated that “...there is no constitutional basis for not applying to the Family Court of Australia the High Court of Australia’s analysis in Phillip Morris of how and why the Federal Court of Australia has and may exercise accrued jurisdiction.”
Invoking Jurisdiction
The court, however, has a discretion whether to exercise the accrued jurisdiction in a particular matter.
In Phillip Morris (supra) Barwick CJ said at 475 that the exercise of accrued jurisdiction “…is discretionary and not mandatory, though it will be obligatory to exercise the federal jurisdiction which has been attracted in relation to the matter."
In the marriage of Ireland (1986) FLC ¶91-731 Lindenmayer J, at 75,315 said:
“The fact that a federal court has jurisdiction to entertain a non-federal claim as a non-severable aspect of a “matter” of which a federal claim within its jurisdiction is an integral part does not mean that that court must exercise that “accrued” jurisdiction. It remains a matter for the discretion of the court whether, in all the circumstances of the particular case, that jurisdiction should or should not be exercised.”
More recently, the Full Court in Bishop and Bishop (2003) FLC ¶93-144 say at 78, 404 that “[e]ven where a case clearly attracts accrued jurisdiction there is still a discretion in the Court as to whether to exercise that jurisdiction.”
The question for my determination is whether I should exercise the jurisdiction to determine the whole “controversy” in this case.
In Fencott v Muller(supra) a majority of the High Court, at 608, stated that:
“What is and what is not part of the one controversy depends on what the parties have done, the relationship between or among them and the laws which attach rights or liabilities to their conduct and relationships. The scope of the controversy which constitutes a matter is not ascertained merely by reference to the proceedings which a party may institute, but may be illuminated by the conduct of those proceedings and especially by the pleadings in which the issues in controversy are defined and the claims for relief are set out. But in the end, it is a matter of impression and of practical judgment whether a non- federal claim and a federal claim joined in a proceedings are within the scope of one controversy and thus within the ambit of a matter.”[My emphasis]
The discretionary nature of the exercise of accrued jurisdiction is highlighted in Warby (supra), where the Full Court identified the considerations to be taken into account in determining whether the court will exercise its accrued jurisdiction. These considerations are:
1.what the parties have done;
2.the relationship between or among then;
3.the laws which attach rights or liabilities to their conduct and relationships;
4.whether the claims are part of a single justiciable controversy and in determining that question whether the claims are “attached” and not “severable” or “disparate”;
5.whether the claims are non-severable from a matrimonial cause and arise out of a common sub-stratum of facts; and
6.whether the Court has the power to grant appropriate remedies in respect of the “attached” claims.
The Full Court in Bishop and Bishop (supra), stated at 78,407:
“We think some caution and a very careful examination of the facts needs to be exercised before applying the general notion that if a court has jurisdiction it ought exercise it when dealing with claims involving third parties in family law cases. That caution having been said, if, as in this case, the facts support the exercise of accrued jurisdiction, the Court ought not to shy away from it. It is a very important and necessary part of the Court’s powers.”
A recent decision of the Supreme Court of New South Wales, Valceski v Valceski[2007] NSWSC 440, involving an application for transfer of proceedings to the Family Court, included a discussion of the accrued jurisdiction of the Family Court. Brereton J was of the opinion after reviewing the authorities in relation to exercise of the discretion, at [59] that “[w]hile there may be a discretion to decline to exercise accrued jurisdiction, it will be an exceptional case in which that discretion can properly be exercised so that the whole of a justiciable controversy is not resolved in one court.”
Discussion
Turning to consider the circumstances of this case:
What the parties have done
The applicant husband first instituted proceedings in the Supreme Court in May 2004. While he filed an application in this court for property orders in June 2004, it was not until January 2006 that he amended his application to include orders specifically with respect to the partnership and business.
It is thus the applicant who has brought the proceedings in both courts.
Upon application of the husband, the proceedings in the Supreme Court were stayed in May of last year. The respondent and second respondent opposed the application for a stay and wished for the matter to proceed in the Supreme Court.
The respondent wife does not seek any s 79 orders with respect to property in this Court.
I am informed that the proceedings in the Supreme Court were quite advanced before the stay was granted, with the proceedings having already progressed through interlocutory argument and decision, pleadings on both sides, discovery, and that apart from some outstanding expert reports to be provided by the plaintiff, the proceedings were at that time ready to be listed for trial.
The relationship between the parties
The applicant husband, respondent wife and second respondent carried out a farming business together. The applicant worked on the farm from 1989 to 2003.
The respondent wife has been married to both the applicant husband and second respondent.The applicant husband claims to be the father of three of the respondent wife’s children. This issue has yet to be resolved.
Mr Berman, for the respondent, submitted that the marital relationship between the applicant and respondent was for a period of only 18 months, and that after their divorce what the parties maintained was in fact a commercial arrangement regarding the running and operation of the business. (Transcript of proceedings, p 16)
As correctly pointed out by Mr McGinn in his submissions, however, this case does not involve an arm’s length third party in the context of a commercial transaction. Rather the second respondent is the current husband of the respondent and was been involved in the business with the applicant and respondent for 15 years. The affairs of these parties’, both personal and financial, are obviously “intertwined”.
The laws which attach rights or liabilities to their conduct and relationships:
The applicant seeks orders under South Australian law- the Partnership Act 1891 (SA) and the Supreme Court Act 1935 (SA).
The applicant also seeks orders under the Corporations Act 2001 (Cth). This Court has jurisdiction with respect to civil matters under the Act pursuant to s 1337C of the Corporations Act.
The applicant seeks orders under the Partnership Act 1891 for the winding up of the affairs of the partnership and an account and inquiry pursuant to ss 28, 29, 39, 42 and 44. He also seeks the appointment of a receiver pursuant to s 39.
Mr Berman submitted that the Partnership Act provides for the orderly and proper resolution of partnership disputes and that it sets out a regime for an account and inquiry and for the appointment of a receiver, two orders sought by the applicant. Mr Berman also submitted that if there is a dispute under the Partnership Act then the relevant court empowered to deal with such dispute is the Supreme Court of South Australia, not any other court.
It has been submitted by Mr McGinn that the Family Court “picks up” the laws of each State and Territory , referring to s 79 of the Judiciary Act and ASIC v Edensor Nominees Pty Ltd (2000) 204 CLR 559.
Whether the claims are part of a single justiciable controversy and in determining that question whether the claims are “attached” and not “severable” or “disparate”
Gummow and Hayne JJ in Re Wakim; Ex parte McNally (supra) at [139] state that “[t]he central task is to identify the justiciable controversy. In civil proceedings that will ordinarily require close attention to the pleadings (if any) and to the factual basis of each claim.”
The orders the applicant is seeking in the Supreme Court proceedings are replicated in the orders he is seeking in paragraph 3 of his Amended Amended Application in this Court. The applicant does, however, seek orders in the alternative pursuant to this Court’s accrued jurisdiction and/or pursuant to s 78 of the Family Law Act.
In the applicant husband’s Amended Statement of Claim filed in the Supreme Court, he outlines certain information under the heading of “Personal relationships” this includes at paragraph 20 that “the plaintiff has contributed substantially to the domestic life of the parties and their children since November 1998, as homemaker, cook, cleaner and child carer.” The husband also makes reference at paragraph 20A to his contributions to the maintenance and improvement of the land and the house and also the partnership business and the business of the company. Specifically he refers to his contributions through his skill, expertise and labour and indirect contributions through saving the respondents time and resources they would otherwise have expended. The applicant at paragraph 20D sets out that:
“By reason of the personal relationship between the parties and the contributions made from 1989 to 2003 the plaintiff is entitled to an interest in the land and [the Respondents] cannot reasonably deny such an interest and hold the land on trust for themselves and the plaintiff. “
From the pleadings, it appears that the issues that would be canvassed in the Supreme Court are therefore largely the same issues which would be explored in this Court.
The question necessarily arises, however, as to whether the issue in relation to the partnership dispute and orders sought with respect to the corporation can be separated from the proceedings in this court.
The claim in the Supreme Court is linked to the Family Court proceedings as the applicant and respondent were married. The two proceedings are also linked as the applicant husband is seeking essentially the same orders in both courts in relation to property. Orders are sought in both courts with respect to the partnership and company in which the parties were involved.
It is not possible for orders to be made with respect to property settlement in this court without a determination first being reached regarding the interests of the applicant husband and respondent with respect to the partnership, company and land in question, and therefore the property pool of the parties.
Whether the claims are non-severable from a matrimonial cause and arise out of a common sub-stratum of facts
Both the Supreme Court claim and the application before this Court for property orders arise out of a common sub-stratum of facts - the relationship between the parties and the partnership/ business carried out by them.
However, the claims before the Supreme Court could be separated from the matrimonial cause. As submitted by Mr Berman (Transcript of proceedings, p 19) there could be two proceedings, with the Supreme Court first making a determination with respect to the parties’ respective interests in the partnership and company, before this court finalised the property settlement and dealt with children’s issues.
Whether the Court has the power to grant appropriate remedies in respect of the “attached” claims.
The Full Court in Warby, at 88,791, stated that the lack of power to grant a remedy does not demonstrate a lack of jurisdiction over a matter, but rather is relevant to whether the discretion should be invoked. The Full Court considered the powers granted by sections 80 and 34 of the Family Law Act, but did not resolve questions raised in relation to the scope of powers conferred by s 34 as the court did not have the benefit of specific argument in that case.
Under s 80(k) of the Act the Court is able to make any order which it thinks is necessary to make to do justice.
Section 34 provides that the Court has power, in relation to matters in which it has jurisdiction, to make orders of such kinds, and to issue, or direct the issue of, writs of such kinds, as the Court considers appropriate.
Section 90AE gives the court the power in proceedings under s 79 to alter the rights, liabilities or property interests of a third party in relation to the marriage where:
(3)(a) the making of the order is reasonably necessary, or reasonably appropriate and adapted, to effect a division of property between the parties to the marriage; and
(b) if the order concerns a debt of a party to the marriage--it is not foreseeable at the time that the order is made that to make the order would result in the debt not being paid in full; and
(c) the third party has been accorded procedural fairness in relation to the making of the order; and
(d) the court is satisfied that, in all the circumstances, it is just and equitable to make the order; and
(e) the court is satisfied that the order takes into account the matters mentioned in subsection (4).
The Court thus has the power to make orders affecting the rights and interests of the second respondent. However, the second respondent, as outlined by his counsel in written submissions, does not have any interest in s 79 proceedings between the applicant husband and respondent wife.
In relation to the orders sought under the Partnership Act, s 1B of that Act defines “Court” as the “Supreme Court of South Australia”.
The High Court in Smith v Smith (No 3) (1986) FLC 91-732 considered whether the Family Court had the power to approve a release under s 31 of the Family Provision Act (NSW). The court reached the decision that the Family Court was unable to do so as the “Court” referred to in the relevant section of the NSW legislation was the Supreme Court of New South Wales and “[a]n approval by the Family Court is not an approval by the Supreme Court, and would not satisfy sec. 31(3).” (at 75, 333 per Gibbs CJ, Wilson and Dawson JJ)
However, in ASIC v Edensor Nominees Pty Ltd (supra), Gleeson CJ, Gaudron and Gummow JJ distinguished the case from Smith saying, at 594:
“…as has been indicated earlier in these reasons, Smith v Smith does not cut across the established line of authority that the identification of a State Supreme Court as the forum for the administration of a remedy created by State law does not exclude the administration of that remedy by courts in the exercise of federal jurisdiction.”
Following ASIC v Edensor Nominees (supra), the definition of Court in the Partnership Act as the Supreme Court would not preclude the Family Court from granting a remedy under the Act.
Further considerations
The Full Court in Warby (supra) indicated, however, at 88, 793 para [91] that the above considerations were not intended to be an “exhaustive definition which must be applied beyond the circumstances posited in this case.”
From the above considerations it may seem apparent this matter does involve a single justiciable controversy and that this court could prima facie exercise accrued jurisdiction to determine the whole matter. However, I consider that in the circumstances of this case there are other factors which need to be taken into account.
Two additional issues are of particular importance in the present case- delay and costs thrown away.
The proceedings in the Supreme Court have significantly advanced already. I have been advised by Mr Berman that were the matter to proceed in the Supreme Court, there is availability for that court to hear a two week matter in July and a 5 week matter in October. My enquiries have disclosed that the matter could not be heard in this Court until mid to late next year. The parties, I am informed from the bar table, have not even yet attended a financial conciliation conference.
As already mentioned, the applicant husband did not seek any orders in this Court regarding the company or partnership until he filed an Amended Application on 16 January 2006. Proceedings for such orders in the Supreme Court were commenced in May 2004.
In making his decision to stay the proceedings in the Supreme Court, Judge Withers, at [14] made reference to the argument submitted by the defendants (respondents) in opposition to the application for stay. It had been pointed out to Judge Withers that the proceedings in the Supreme Court had gone through interlocutory argument and decision, pleadings on both sides, discovery, and that apart from some outstanding expert reports to be provided by the plaintiff, the proceedings were at that time ready to be listed for trial.
In written submissions, it was submitted by counsel for the respondent that the respondents wish the proceedings to be resolved as further delay will affect the conduct of their business and the decisions that they make into the future. It was submitted that the business is effectively on hold until the matter is resolved.
The costs already incurred to date are also of significance. I have been advised that the respondents have to date incurred approximately $100, 000 on the Supreme Court proceedings. Mr McGinn has indicated the applicant has likewise incurred approximately $30, 000 on the Supreme Court proceedings.
Bargal Pty Ltd v Force(1983) 154 CLR 261, a case heard together in the High Court with Stack v Coast Securities (No 9) Pty Ltd (supra), involved proceedings before both the Supreme Court of Queensland and the Federal Court. Mason, Brennan and Deane JJ, at 298, after concluding both courts had jurisdiction in the matter- the Federal Court having jurisdiction to determine the entire controversy and the Supreme Court having the jurisdiction to determine the controversy excluding the federal aspect- turned to consider which court was more appropriate in the circumstances. Their Honours state:
“[t]he first and paramount consideration in the exercise of this discretion is to do what is in the best interests of the litigants….The court which can control the entire controversy has an obvious advantage. Generally speaking, its determination of all the issues will be made more effectively and more expeditiously and at less expense than the resolution of the controversy which depends on determinations made by two courts in separate proceedings which are necessarily fragmented
To offset this advantage offered by the Federal Court powerful countervailing reasons need to be shown. For example, it may appear that the federal issue is raised at such a late stage in the Supreme Court proceedings that it would be a waste of time and lead to needless expense and inconvenience not to proceed to a hearing in that Court.”
Lindenmayer J in In the marriage of Ireland (supra), although deciding in that case that the court had accrued jurisdiction to determine the matter, decided that in the circumstances of the case it would be unwise to exercise the jurisdiction. His Honour concluded at 75,318 that:
“…to invoke the jurisdiction would defeat the very purposes of its invocation, namely the speedy and least expensive resolution of the real issues between the parties. Rather, I have come to the final conclusion that it would better serve the ends of swift and inexpensive justice if the proceedings in the Supreme Court of Queensland in relation to the title to the business were allowed to go forward to conclusion before the proceedings for property settlement between the husband and wife are heard and determined.”
In O and O [2004] FamCA 340 (unreported), Carmody J reviewed the decision of a Registrar refusing to grant leave to join the wife’s father to the proceedings. The husband claimed to have a beneficial interest in land registered in the name of the wife’s father. In that case, there was also currently proceedings before a State Court. The facts of the case differ from those before me in that Carmody J was of the opinion that the parties’ assets and liabilities could be ascertained without going into the other issues involving the third party. However, in deciding not to exercise accrued jurisdiction and allowing the property proceedings to continue without joining the third party, some factors taken into consideration by Carmody J, at [45] were that:
o the Supreme Court proceedings were likely to be finalised before the s 79 proceedings;
o the existence of pleadings in the Supreme Court favoured the disposition of the beneficial ownership issue in that court;
o joining the third party would duplicate concurrent proceedings in another, equally competent but more suitable jurisdiction;
o the duplication of legal proceedings is undesirable as it causes delay, needlessly increases costs and adds additional burdens
o although the Family Court proceedings were instituted first, the Supreme Court matter had reached a more advanced stage; and
o the Family Court will recognise the Supreme Court determination and orders and the Supreme Court proceedings would effectively determine the same issue in the Family Court proceedings.
In this case, the best interests of the litigants would be met by the option which resolved the matters at least cost and in a timely manner. In this case that would mean the Supreme Court hearing the matter.
Another point to be taken into account is that, unlike the case of Bishop (supra) where neither the husband in the proceedings or the other parties sought to be joined filed submissions or appeared at the trial or on appeal, the respondent and second respondent strongly oppose the court exercising accrued jurisdiction and ask that the matter proceed in the Supreme Court.
Conclusion
There are of course matters which cannot be heard by the Supreme Court, being the further issues in relation to the property settlement between the parties, in relation to homemaker/parent contributions, and also the children’s matters. Therefore, even if the Supreme Court were to first determine the issue with regard to the partnership and business, this court would then need to finalise the property settlement between the parties and children’s issues. There would thus be two trials unless the parties, with the benefit of the Supreme Court findings, were then able to settle the matter. Certainly, prospects of settlement would appear to be significantly advanced at that point.
In the circumstances I have decided not to exercise the accrued jurisdiction of this Court and that it would be more appropriate for the matter to be determined by the Supreme Court.
Significant to my decision are the delay and additional cost that would be incurred were the whole matter to be decided in this court. The proceedings before the Supreme Court are significantly further advanced than the proceedings in this Court and are certain to be heard earlier. The cost which has already been expended in that Court is not to be lightly disregarded.
Also guiding my decision is the fact that while the issues surrounding the partnership and business carried out by the parties is necessarily linked to the marital relationship between the applicant and respondent, the relationship between all of the parties appears to be of a significant commercial nature, character and structure. I consider it is appropriate the Supreme Court determine the claims of and address the orders sought by the applicant in relation to the partnership and business before this court has regard to further issues relating to property settlement and children’s issues.
I certify that the preceding ninety (90) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Burr.
Associate:
Date:
Key Legal Topics
Areas of Law
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Family Law
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Commercial Law
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Civil Procedure
Legal Concepts
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Jurisdiction
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Constructive Trust
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Remedies
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Stay of Proceedings