Warby & Warby
[2001] FamCA 1469
•21 December 2001
[2001] FamCA 1469
FAMILY LAW ACT 1975
IN THE FULL COURT
OF THE FAMILY COURT OF AUSTRALIA
AT MELBOURNE
File No. ML7334 of 1998
IN THE MATTER OF:
MARK DONALD WARBY
Applicant Husband
AND
YVONNE ELIZABETH WARBY
Respondent Wife
REASONS FOR JUDGMENT OF THE FULL COURT
CASE STATED
CORAM: NICHOLSON CJ, FINN AND STRICKLAND JJ
DATE OF HEARING: 20 JUNE 2001
DATE OF JUDGMENT: 21 DECEMBER 2001
APPEARANCES
Ms S. Johns of Counsel (instructed by Peter Falconer & Assoc, Solicitors, PO Box 1071, GEELONG VIC 3220) appeared on behalf of the husband
No appearance for or on behalf of the wife
Warby and Warby ML7334 of 1998
Date of Hearing 20 June 2001
Date of Judgment 21 December 2001
Coram: Nicholson CJ, Finn and Strickland JJ
CATCHWORDS:
PRACTICE AND PROCEDURE – Case Stated for the opinion of the Full Court – Section 94A Family Law Act 1975 - Questions of law
JURISIDCTION OF FAMILY COURT OF AUSTRALIA – Accrued –Whether an accrued jurisdiction exists for exercise in the Family Court – The indicia, criteria, factors or considerations that will invoke the exercise of the Court’s accrued jurisdiction - Whether the Family Court has power to extend its accrued jurisdiction to the determination of an issue against a third party where that third party refuses to take part in the proceedings.
This matter came before the Full Court by way of a Case Stated by Frederico J on 25 November 1999 pursuant to s. 94A of the Family Law Act 1975 ("the Act"). It essentially raised the question of whether the Family Court of Australia has an accrued jurisdiction, and if so, the extent of that jurisdiction and the circumstances in which it should be exercised.
The facts as set out in the Case Stated by Frederico J are as follows
"1.In or about 1982, the Wife purchased 20 Kyema Drive, Lara in the State of Victoria (“The Property”) as tenants-in-common with her father, Clement Eldridge (“The Wife’s Father”). The Wife and the Wife’s father made respective contributions to the purchase price of the property, which amounts are in dispute between the parties, and there was a mortgage on the property held by the National Australia Bank (“The Mortgagee”).
2.In or about 1984/85, the parties commenced cohabitation in the property.
3.In or about 1986/89, the Wife’s father paid a sum of money to the mortgagee which had the effect of discharging the mortgage on the property. At about the same time or shortly thereafter, there was an agreement entered into:
(a)according to the Wife, between the Wife and the Wife’s father for repayment to the Wife’s father of the sum paid by the Wife’s father to discharge the mortgage (The Wife’s Agreement”);
(b)according to the Husband, between the parties and the Wife’s father for repayment to the Wife’s father of an amount (in periodic payments) to extinguish the Wife’s father’s equity in the property (“The Husband’s Agreement”);
4. On 21 January 1989, the parties were married.
5.In or about 1992, the repayments pursuant to the respective agreements were completed. The Husband says that he assisted the Wife in making those repayments pursuant to the Husband’s Agreement, which the wife denies.
6.During the course of cohabitation, the Husband claims that he made a number of improvements to the property, including landscaping, gardening and structural internal and external renovations, which in essence, the Wife denies. In addition, the Husband claims to have been employed on a regular part-time basis through-out the marriage and that he contributed his earnings towards the mortgage and in reduction of the debt to the wife’s father pursuant to the Husband’s agreement. This is a factor in dispute between the parties.
7.The Wife’s father has been registered on title as tenant-in-common with the Wife since in or about 1982.
8.The parties separated in or about 1994. A decree nisi absolute was granted by this court dissolving the parties marriage on or about 15 October 1998.
9.The Husband has instituted a Form 8 application, inter alia, seeking an order that the Wife’s father be joined as a party to these proceedings, and that the proceedings initiated by the Husband by way of his Form 7 Application and in so far as they seek orders against the Wife’s father are within the accrued jurisdiction of this Court. The Wife opposes the Husband’s application."
The written submissions of the husband provided the following further factual context:
"F.By way of Form 7 Application filed (Melbourne Registry) 8 October, 1999 the husband has sought orders, inter alia:
F.1 Against [the wife's father]:
Pursuant to the Common law and the Laws of Equity as they apply to the State of Victoria seeking:
F.1.1a declaration that he holds his interest in the real property wholly upon trust for the husband and/or wife;
F.1.2an order that [the wife's father] holds his interest in the real property subject to an equitable charge in favour of the husband and/or wife;
F.1.3an order for a liquidated sum equal to the repayments under the National Australia Bank mortgage and the subsequent repayment by instalments to [the wife's father];
G.The husband seeks to invoke the accrued jurisdiction of the Family Court of Australia in order to pursue his claim(s) against [the wife's father] concurrently with the "adjustive" property proceedings under section 79 of the Family Law Act."
The written submissions of the wife provided the following further factual context:
"9. The Husband has instituted a Form 8 application, inter alia, seeking an order that the Wife's father be joined as a party to these proceedings, and that the proceedings initiated by the Husband by way of his Form 7 Application and in so far as they seek orders against the Wife's father are within the accrued jurisdiction of this Court. The Wife opposes the Husband's application.
10.The Husband's Form 7 claims, inter alia, relief in equity as against the Wife's father on the basis that the Wife's father holds his interest in the property:
(a)wholly upon trust for the benefit of the Husband and/or the Wife; and
(b)subject to an equitable charge in favour of the husband and/or the Wife;
11.Further, the Husband seeks orders pursuant to S 79 of the Family Law Act 1975 as against the wife.
12. The Wife's father does not consent to taking part in these proceedings."
Held: per curiam, answering the questions:
Question 1
Whether in light of the decision of Re Wakim; Ex Parte McNally and Ors (1999) 163 ALR 270, and Smith v Smith (No.3) (1986) FLC 91-732, the Family Court of Australia’s jurisdiction in a “matrimonial cause” under S. 4(1)(ca) of the Family Law Act 1975 is restricted to the determination of the Family law claim or proceeding, and does not (by way of accrued jurisdiction) extend beyond to the litigious and justiciable controversy:
(a) under State law; or
(b) pursuant to common law or at equity;
between a party to a marriage or former marriage and a third party of which the Family law claim or cause of action forms part?
Answer: No
Question 2
If the answer is “no” to question 1, what are the indicia, criteria, factors or considerations that will invoke the exercise of the Court’s accrued jurisdiction in the circumstances posited in paragraph 1 hereof?
Answer: Relevant to whether the Family Court of Australia will invoke the Court’s accrued jurisdiction in the circumstances posited in question 1 are:
what the parties have done;
the relationships between or among them;
the laws which attach rights or liabilities to their conduct and relationships;
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”;
whether the claims are non-severable from a matrimonial cause and arise out of a common sub-stratum of facts; and
whether the Court has the power to grant appropriate remedies in respect of the “attached” claims.
Question 3
If the answer to question 1 is “no”, does the Family Court have power to extend its accrued jurisdiction to the determination of an issue against a third party where that third party refuses to take part in the proceedings?
Answer: Yes where the third party has proper notice and has been afforded a proper opportunity to be heard.
Question 4
If the answer to questions 1 and 3 are “no”, how are the accrued proceedings to go forward in the Family Court?”
Answer: Unnecessary to answer.
REPORTABLE
INTRODUCTION
This matter comes before this Court by way of a Case Stated by Frederico J on 25 November 1999 pursuant to s. 94A of the Family Law Act 1975 ("the Act"). It essentially raises the question of whether the Family Court of Australia has an accrued jurisdiction, and if so, the extent of that jurisdiction and the circumstances in which it should be exercised.
Subsections 94A(1) and (2) of the Act relevantly provide:
"(1)If, in proceedings in a court, being proceedings in which a decree or decision to which subsection 94(1) or (1AA) applies could be made, a question of law arises which the Judge and at least one of the parties wish to have determined by a Full Court of the Family Court before the proceedings are further dealt with, the Judge shall state the facts and question in the form of a special case for the opinion of a Full Court, and a Full Court shall hear and determine the question.
(2)The Full Court may draw from the facts and the documents any inference, whether of fact or of law, which could have been drawn from them by the Judge."
As to the meaning of “jurisdiction”, Halsbury's Laws of England, 4th ed., vol. 10, paragraph 715 defines the term as "… the authority which a court has to decide the matters that are litigated before it or to take cognisance of matters presented in a formal way for its decision". Toohey J in Jackson v Sterling Industries Ltd (1987) 162 CLR 612 adopted this meaning and in Harris v Caladine (1991) FLC ¶92-217, his Honour discussed the relationship between "jurisdiction" and "judicial power". Toohey J said at 78,493:
"The distinction between jurisdiction and power is often blurred, particularly in the context of ''inherent jurisdiction''. But the distinction may at times be important. Jurisdiction is the authority which a court has to decide the range of matters that can be litigated before it; in the exercise of that jurisdiction a court has powers expressly or impliedly conferred by the legislation governing the court and ''such powers as are incidental and necessary to the exercise of the jurisdiction or the powers so conferred'' : Parsons v. Martin (1984) 5 F.C.R. 235, at p. 241 ; see also Jackson v. Sterling Industries Ltd. (1987) 162 C.L.R. 612, at pp. 630-631."
THE FACTS AS SET OUT IN THE CASE STATED
The facts as set out in the Case Stated by Frederico J are as follows:
"1.In or about 1982, the Wife purchased 20 Kyema Drive, Lara in the State of Victoria (“The Property”) as tenants-in-common with her father, Clement Eldridge (“The Wife’s Father”). The Wife and the Wife’s father made respective contributions to the purchase price of the property, which amounts are in dispute between the parties, and there was a mortgage on the property held by the National Australia Bank (“The Mortgagee”).
2.In or about 1984/85, the parties commenced cohabitation in the property.
3.In or about 1986/89, the Wife’s father paid a sum of money to the mortgagee which had the effect of discharging the mortgage on the property. At about the same time or shortly thereafter, there was an agreement entered into:
(a)according to the Wife, between the Wife and the Wife’s father for repayment to the Wife’s father of the sum paid by the Wife’s father to discharge the mortgage (The Wife’s Agreement”);
(b)according to the Husband, between the parties and the Wife’s father for repayment to the Wife’s father of an amount (in periodic payments) to extinguish the Wife’s father’s equity in the property (“The Husband’s Agreement”);
4. On 21 January 1989, the parties were married.
5.In or about 1992, the repayments pursuant to the respective agreements were completed. The Husband says that he assisted the Wife in making those repayments pursuant to the Husband’s Agreement, which the wife denies.
6.During the course of cohabitation, the Husband claims that he made a number of improvements to the property, including landscaping, gardening and structural internal and external renovations, which in essence, the Wife denies. In addition, the Husband claims to have been employed on a regular part-time basis through-out the marriage and that he contributed his earnings towards the mortgage and in reduction of the debt to the wife’s father pursuant to the Husband’s agreement. This is a factor in dispute between the parties.
7.The Wife’s father has been registered on title as tenant-in-common with the Wife since in or about 1982.
8.The parties separated in or about 1994. A decree nisi absolute was granted by this court dissolving the parties marriage on or about 15 October 1998.
9.The Husband has instituted a Form 8 application, inter alia, seeking an order that the Wife’s father be joined as a party to these proceedings, and that the proceedings initiated by the Husband by way of his Form 7 Application and in so far as they seek orders against the Wife’s father are within the accrued jurisdiction of this Court. The Wife opposes the Husband’s application."
THE QUESTIONS OF LAW AS SET OUT IN THE CASE STATED
The following are the questions stated for the opinion of the Full Court in the Case Stated:
“1.Whether in light of the decision of Re Wakim; Ex Parte McNally and Ors (1999) 163 ALR 270, and Smith v Smith (No.3) (1986) FLC 91-732, the Family Court of Australia’s jurisdiction in a “matrimonial cause” under S. 4(1)(ca) of the Family Law Act 1975 is restricted to the determination of the Family law claim or proceeding, and does not (by way of accrued jurisdiction) extend beyond to the litigious and justiciable controversy:
(a) under State law; or
(b) pursuant to common law or at equity;between a party to a marriage or former marriage and a third party of which the Family law claim or cause of action forms part?
2.If the answer is “no” to question 1, what are the indicia, criteria, factors or considerations that will invoke the exercise of the Court’s accrued jurisdiction in the circumstances posited in paragraph 1 hereof?
3.If the answer to question 1 is “no”, does the Family Court have power to extend its accrued jurisdiction to the determination of an issue against a third party where that third party refuses to take part in the proceedings?
4.If the answer to questions 1 and 3 are “no”, how are the accrued proceedings to go forward in the Family Court?”
SOME FURTHER FACTUAL BACKGROUND AND SOME UNSATISFACTORY ASPECTS OF THIS CASE STATED
It is important that we point out at this introductory stage that although it is clear on the face of the order made by Frederico J on 25 November 1999 for the Case Stated that it was made with the agreement of both the husband and the wife, who were then represented by Counsel, and although both the husband and the wife filed written submissions prepared by Counsel in relation to the Case Stated, it was only the husband who appeared (through Counsel) when we ultimately heard the Case Stated. There was no appearance on that occasion by the wife. We will later refer in more detail to this procedural history.
Furthermore, it is clear from material to which we will shortly refer, that the wife's father, Clement Graham Eldridge, who can be described as "the third party", has never participated in these proceedings either at first instance or in the context of the Case Stated.
We would also say at this stage that we do not find the statement of facts in the Case Stated, particularly paragraph 9 of that statement, as helpful as it might have been in explaining the jurisdictional conflict that has arisen in this case. In order to assist in understanding that conflict, we propose to set out those paragraphs in the statements of facts contained in the written submissions of the husband and also of the wife (which were filed in preparation for an earlier scheduled hearing of the Case Stated in June 2000), and which are concerned with the application which the husband has filed and the relief which he therein seeks against the wife's father.
The relevant paragraphs from the husband's written submissions (dated 5 June 2000) are as follows:
"F.By way of Form 7 Application filed (Melbourne Registry) 8 October, 1999 the husband has sought orders, inter alia:
F.1 Against [the wife's father]:
Pursuant to the Common law and the Laws of Equity as they apply to the State of Victoria seeking:
F.1.1a declaration that he holds his interest in the real property wholly upon trust for the husband and/or wife;
F.1.2an order that [the wife's father] holds his interest in the real property subject to an equitable charge in favour of the husband and/or wife;
F.1.3an order for a liquidated sum equal to the repayments under the National Australia Bank mortgage and the subsequent repayment by instalments to [the wife's father];
H.The husband seeks to invoke the accrued jurisdiction of the Family Court of Australia in order to pursue his claim(s) against [the wife's father] concurrently with the "adjustive" property proceedings under section 79 of the Family Law Act."
The relevant paragraphs from the wife's submissions (dated 13 June 2000) are as follows:
"9.The Husband has instituted a Form 8 application, inter alia, seeking an order that the Wife's father be joined as a party to these proceedings, and that the proceedings initiated by the Husband by way of his Form 7 Application and in so far as they seek orders against the Wife's father are within the accrued jurisdiction of this Court. The Wife opposes the Husband's application.
12.The Husband's Form 7 claims, inter alia, relief in equity as against the Wife's father on the basis that the Wife's father holds his interest in the property:
(c)wholly upon trust for the benefit of the Husband and/or the Wife; and
(d)subject to an equitable charge in favour of the husband and/or the Wife;
13.Further, the Husband seeks orders pursuant to S 79 of the Family Law Act 1975 as against the wife.
12.The Wife's father does not consent to taking part in these proceedings."
PROCEDURAL HISTORY OF THE PRESENT CASE STATED
We note that the matter had been listed before differently constituted Full Courts on two previous occasions.
On 19 June 2000, the Full Court (Finn, Kay and Mullane JJ) adjourned the hearing of this Case Stated until the delivery of the judgment of the Full Court which heard what has been reported as Ferrall and McTaggart (trustees for Sapphire Trust) & Ors v Blyton (2000) FLC ¶93-054 (Nicholson CJ, Lindenmayer and Kay JJ, judgment delivered on 17 November 2000). Both the husband and wife were represented by counsel on that day and the Full Court reserved the costs of the mention.
It is perhaps convenient to note here that Ferrall and McTaggart (trustees for Sapphire Trust) & Ors v Blyton involved applications by third parties for leave to appeal against the refusal of O’Ryan J to make an order for summary dismissal inter alia on the basis that the Court did not have the accrued jurisdiction to determine financial disputes of a much more complex nature than is the case here. The state of the evidence before his Honour was unsatisfactory as the third parties had not filed any affidavits. In such circumstances having regard to the High Court’s decision in Bass v Perpetual Trustees Company Limited & Others (1999) 198 CLR 334, the Full Court held that it should not go further in its determination than to hold that the trial Judge had been correct to refuse to summarily dismiss the case. Thus the question of accrued jurisdiction was not addressed by that Full Court.
We would observe, however, that the submissions of the Attorney-General of the Commonwealth in Ferrall and McTaggart (trustees for Sapphire Trust) & Ors v Blyton contended inter alia that O’Ryan J was correct to proceed on the basis that the Court has accrued jurisdiction.
The present Case Stated was before the Full Court (Kay, Coleman and Collier JJ) again on 13 March 2001 and again, both parties were represented by counsel. The Full Court ordered that the husband and the wife attend a conciliation conference and adjourned the matter to the next available sittings. The Full Court also gave the parties liberty to amend the Case Stated so as to clarify or simplify the questions to be answered and required service of the amended Case Stated on the wife's father and the Commonwealth and State Attorneys-General.
By correspondence dated 6 June 2001, the Regional Appeals Registrar advised the solicitors on the record for the parties that the matter was listed for hearing in the sittings to commence on 18 June 2001 and advised that the anticipated date of hearing was 20 June 2001. The Regional Appeals Registrar further advised that she had scheduled a conciliation conference for 13 June 2001 at 11:00am.
By correspondence dated 12 June 2001 faxed to the Regional Appeals Registrar, the solicitors on the record for the wife advised that they had been unable to obtain further instructions in the matter and were therefore providing a notice of ceasing to act for the wife. Counsel appeared for the husband at the scheduled conciliation conference on 13 June 2001. There was no appearance by or on behalf of the wife.
THE PRESENT HEARING
It was with this background that the Case Stated came before this Court for hearing as scheduled on 20 June 2001. Ms Johns of counsel appeared for the husband, with there being no appearance by or on behalf of the wife or of the third party (the wife's father). While this was not the ideal circumstance in which to determine the important questions raised by the Case Stated, we proceeded to hear the submissions put by Ms Johns on behalf of the husband - although we left open for our further consideration the question of whether we would ultimately answer the questions contained in the Case Stated.
We did have before us, as we have previously mentioned, the wife’s summary of argument filed 13 June 2000. The arguments contained in that document provide “a contradictor” to the arguments put on behalf of the husband, as will be seen when we will later set out the parties’ submissions.
As to the position of the wife's father (the third party), it will be seen from the passage from the wife's written submissions (earlier quoted) that it was said:
"The wife's father does not consent to taking part in these proceedings."
However, in order to satisfy ourselves as far as possible regarding the position of the wife’s father, we had recourse, with the consent of Counsel for the husband, to an affidavit sworn by the wife’s father on 23 November 1999 and filed on 24 November 1999 by the solicitor acting for the wife in the property settlement proceedings in the Family Court. In paragraph 18 of his affidavit the father states:
“I am now aged 79 years and in poor health from Parkinson’s Disease and I do not wish to be a party to these proceedings.”
We can thus be satisfied to the extent possible in the circumstances that the wife's father does not want to be a party to these proceedings.
We have in paragraph 13 above referred to the reasons why in Ferrall and McTaggart (trustees for Sapphire Trust) & Ors v Blyton the Full Court declined to address the question of whether there is an accrued jurisdiction in this Court. It is true that again in this case there has been no determination of the facts however there are two important differences. First, that case came before the Full Court as an application for leave to appeal the primary judge's refusal to summarily dismiss the case, whereas the present case comes before us by way of a Case Stated pursuant to s. 94A of the Act. That section can certainly be read as empowering the Full Court to determine questions of law at any stage of the proceedings, including before any findings of fact have been made. Secondly, as has been noted above, in the present case there were affidavits filed by the parties including the third party.
Notwithstanding the unsatisfactory aspects of this case, we therefore consider that we can and should proceed to answer the important questions posed.
THE SIGNIFICANCE OF THE QUESTIONS
Before turning to the arguments of the parties, it is appropriate to define and make some preliminary remarks about "accrued jurisdiction".
There has been longstanding controversy as to whether the Family Court of Australia, like the Federal Court of Australia, has accrued jurisdiction. Historically, two matters should be noted.
First, a tension within Australia’s judicature system was described in the following way by Mason J (as he then was) in Philip Morris Inc v Adam P Brown Male Fashions Pty Ltd (1981) 148 CLR 457 at 513, the first case in which the High Court of Australia established that the Federal Court of Australia has an accrued jurisdiction:
“Lurking beneath the surface of the arguments presented in this case are competing policy considerations affecting the role and status of the Federal Court and the Supreme Courts of the States. There is on the one hand the desirability of enabling the Federal Court to deal with attached claims so as to resolve the entirety of the parties’ controversy. There is on the other hand an apprehension that if it be held that the Federal Court has jurisdiction to deal with attached claims, State courts will lose to the Federal Court a proportion of the important work which they have hitherto discharged, work which the Federal Court has no jurisdiction to determine if it be not attached to a federal claim."
The second aspect is that the Parliaments of the Commonwealth, the States and Territories purported to resolve that debate in the latter years of the last decade through the passage of co-operative legislation which provided for the cross-vesting of jurisdiction between federal, State and Territory superior courts. If that statutory scheme were still in operation, debate concerning the accrued jurisdiction of the Family Court of Australia would have remained academic. The trial Judge could have elected to exercise the jurisdiction of the Supreme Court of Victoria and the present questions would be unnecessary. However, by a majority (Kirby J dissenting), the High Court in Re Wakim; Ex parte McNally & Ors (1999) 198 CLR 511; 163 ALR 270 held that the legislative scheme was constitutionally invalid in its purported conferral of State judicial power on federal courts.
As a consequence, if jurisdiction exists for the Family Court to deal with matters that are outside the jurisdiction which it has been expressly granted by the Commonwealth Parliament, it must be found in the doctrine of “accrued jurisdiction” (also termed “pendant” or “attached” jurisdiction) rather than statute. It is a trite rule that parties cannot confer jurisdiction on a court by consent: Ridley v Whipp (1916) 22 CLR 381 at 386.
The “associated jurisdiction” which is expressly granted to the Family Court of Australia by s. 33 of the Family Law Act 1975 has no role to play. Gibbs CJ, Wilson and Dawson JJ said in Smith (No.3) (1986) FLC ¶91-732 at 75,333:
“At best that section could validly do no more than give the Family Court jurisdiction in associated matters arising under some other federal law (see Philip Morris Inc v Adam P Brown Male Fashions Pty Ltd; ….”
"Accrued jurisdiction"
“Accrued jurisdiction” was explained by Barwick CJ in Philip Morris at 475 as follows:
"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. This exercise of this jurisdiction, which for want of a better term I shall call '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."
Some importance attaches to the meaning of the term “matter” and we will turn to that issue in due course.
To repeat, the question of the Federal Court of Australia’s accrued jurisdiction was determined by the High Court in Philip Morris, and in its subsequent decisions of Fencott and Others v. Muller and Another (1983) 152 CLR 570 and Stack and Coast Securities (No. 9) Proprietary Limited (and Others) (1983) 154 CLR 261 the High Court considered the question of whether such an accrued jurisdiction is available in a particular case. In Re Wakim Callinan J has conveniently summarised the varying judgments in Philip Morris. His Honour said at paragraphs 249 to 254 (footnotes omitted):
“[249] In dissent Aickin J was of the view that there was no such attached jurisdiction, “whatever the degree of overlap there may be in the facts relevant to the two kinds of matter”, and Wilson J would have permitted the attached or pendent questions (however they might be described) to be decided only when the federal question could not be resolved without the determination of the non-federal question.
[250] Gibbs J, one of the majority, said that “if a party claims relief on two different legal grounds, but the facts on which the relief is sought on each ground are identical, and the relief sought on each ground is the same in substance if not in form, there is only one matter for determination”.
[251] Mason J (with whom Stephen J agreed) held that the Federal Court had jurisdiction to decide an “attached non-severable claim”, being one where the claims depend on common transactions and facts that arise out of a common substratum of facts. The approach of Barwick CJ was somewhat different. It was almost as if his Honour started with a presumption in favour of jurisdiction when he said "[t]o be outside the accrued jurisdiction, however, the other matter must be separate and disparate from the matter in relation to or in connection with which federal jurisdiction has been attracted”.
[252] Murphy J was of the opinion that the Federal Court might determine “the whole case, that is, resolve judicially every incidental and related issue, every issue which is not separate and distinct from those which arise under a direct grant of federal jurisdiction under s 77 of the Constitution”.
His Honour then observed at paragraphs 253 and 254 (footnotes omitted):
"[253] In Stack v Coast Securities (No 9) Pty Ltd, three justices (Mason, Brennan and Deane JJ) described the identification of what fell within what had come to be called in Fencott v Muller the accrued jurisdiction of the Federal Court as a recurrent problem. The resolution of that problem in Stack was said to depend upon the exercise, as a matter of impression, of a practical judgment whether a non-federal claim and a federal claim joined in a proceeding are within the scope of one controversy and thus within the ambit of a matter.
[254] No doubt while this is, with respect, about as helpful a statement as can be made for the resolution of what is an inevitable and almost intractable problem, obviously minds may and will differ in the making of practical judgments and in the forming of impressions.”
The question of whether the Federal Court of Australia has an “accrued jurisdiction” has thus been settled in the affirmative by the High Court of Australia.
The High Court of Australia has not, however, determined this question for the Family Court of Australia in a definitive way.
The constitutional dimensions of the grant of jurisdiction to federal courts are uniform. In Stack, Mason, Brennan and Deane JJ said at 289 (emphasis added):
"The source of the Parliament's legislative power to create and confer jurisdiction on, a federal court is to be found in ss. 71, 75, 76 and 77 of the Constitution. The power to create federal courts comes from s. 71 which vests the judicial power of the Commonwealth in [the High Court] "and such other federal courts as the Parliament creates, and in such other courts as it invests with federal jurisdiction". The power to confer jurisdiction on a federal court comes from s. 77(i) which enables Parliament to define the jurisdiction of any federal court with respect to any of the "matters" (a) in which [the High Court] is given original jurisdiction by s. 75, and (b) with respect to which the Parliament is given power by s.76 to confer original jurisdiction on [the High Court]."
THE ORIGINAL SUBMISSIONS OF THE HUSBAND
We have earlier set out paragraphs F and G of the original written submissions prepared on behalf of the husband and filed on 5 June 2000, in which the relief sought by the husband in reliance on the accrued jurisdiction is described.
Then in paragraph H of those submissions the legislative provisions which the husband apparently regards as relevant to the question of accrued jurisdiction are listed, being:
"H.1Section 4 of the Family Law Act definition of "matrimonial cause", subsection 4(1)(ca)(i) and subsection 4(1)(f).
H.2 Section 31(1)(a) Family Law Act.
H.3 Section 31(1)(d) Family Law Act."
The submissions then proceed to set out the "factual matters" which (according to the submissions) attract the accrued jurisdiction:
"I.1The husband in his Form 7 Application, having also sought "adjustive" property orders pursuant to section 79 Family Law Act, the Family Court is obliged in the exercise of its "property" jurisdiction, inter alia, to both identify the items which constitute the asset pool and, also, to evaluate the husband and the wife's respective contributions during the course of their relationship.
I.2The factual circumstances of the present case constitute "a single justifiable controversy" which is common as between:
I.2.1the section 79 Family Law Act "adjustive" proceedings between the parties to the marriage; and
I.2.2the non-federal proceedings against the second respondent for common law and equitable relief/remedies.
I.3The non-federal proceedings against the second respondent are "attached" to and not "severable" or "disparate" from the "adjustive" proceedings under section 79 Family Law Act because:
I.3.1the husband raises factual matters which, if accepted, would extinguish any interest - registered or otherwise - of the second respondent in the real property;
I.3.2in the factual circumstances of the case the judicial exercise of ascertaining the extent of the interests of the husband and wife in the real property, being the principal matrimonial asset, are inextricably bound up with the issue of whether the second respondent has an interest in the real property;
I.3.3in the factual circumstances of the case the judicial exercise of ascertaining and evaluating, inter alia, the financial contributions of each of the husband and the wife to the acquisition, conservation, improvement and maintenance of the real property is inextricably bound up with:
(a)issues of whether the husband and the wife had paid moneys to the second respondent, pursuant to an agreement with the second respondent or otherwise, which would extinguish any proprietary interest he may assent (sic) over the real property;
(e)the obligation of the Family Court to have regard to the "interests" - real or perpetuated - of a third party;
I.4The factual issues raised in the non-Federal proceedings against the second respondent are not severable from "contribution" issues between the parties to the marriage in proceedings under section 79 Family Law Act pertaining to the acquisition, conservation, maintenance and improvement of the real property."
THE SUBMISSIONS OF THE WIFE
The submissions as to the law prepared on behalf of the wife by Mr Skinner of Counsel dated and filed 13 June 2000 are as follows:
"Contentions of Law
13.It is recognised at law that the Federal jurisdiction is not restricted to the determination of the Federal claim or cause of action but extends beyond that to the litigious or justiciable controversy between the parties of which the Federal claim forms part: See Stack v Coast Securities (no 9) Pty Ltd (1983) 154 CLR 261 @ 290; Re Wakim; Ex Parte McNally and Ors (1999) 163 ALR 270.
14.It is contended that the exercise of the accrued jurisdiction in the Federal Court is a discretionary function, not a mandatory one: see Phillip Morris Inc v Adam P Brown Male Fashions Pty Ltd (1980) 145 CLR 457 at 482.
15.The scope of a 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 set out: See Stack v Coast Securities (no 9) ibid.
16.However, it is contended that Parliament has not extended the jurisdiction of the Family Court to the determination of non-Federal claims, by reason of the following:
(a)unlike the Federal Court, the Family Court has no general and equitable jurisdiction and no jurisdiction to award damages: See McKay v McKay (1984) FLC 91-573 @ 79,633 per Strauss J;
(b)the grant of jurisdiction to the Family Court is not independent of the grant of power to grant relief: See McKay @ 79,634 per Strauss J;
(c)the Family Court is a court established to perform a specific purpose, namely, the resolution of disputes between the parties to a marriage or a former marriage arising out of that relationship: See Prince v Prince (1984) FLC 91-501 @ p.79,084 per Fogarty J;
17.It is contended that the reference to “matters” in S 31(1)(a) of the Family Law Act 1975 refers to matters arising in proceedings for remedies which the Court has power to grant; See McKay per Strauss J @ pp79,633;
18.A claim in equity or at common law is not a “matter” within s31(1)(a) of the Family Law Act, by reason of the fact that:
(a)it does not arise under the Family Law Act; and
(b)it is not a matter in respect of which a matrimonial cause was instituted under that Act: See Smith v Smith (1986)(No.3) FLC 91-732 @ 75,331,332 per Gibbs CJ, Wilson and Dawson JJ;
19.It is further contended that a matrimonial cause relates only to proceedings between the parties to the marriage. Parliament did not intend that the Family Court could make orders which sub-ordinate the interests of a third party to those of a party to a marriage, or orders which operate to the detriment of third parties, except in certain limited circumstances; See Prince v Prince (1984) FLC 91-501 @ pp 79,078 per Evatt CJ, pp 79,084 per Fogarty J and pp 79,078 per Pawley J; Ascot Investments Pty Ltd v Harper and Harper (1981) FLC 91-000 @ pp 76,061 per Gibbs J.
20.If the Court is of the view that its jurisdiction is not restricted to a determination of a claim under the s 4(1)(ca) of the Family Law Act, and that it extends to a non-federal claim, it is contended that such jurisdiction cannot be extended to a third party who does not seek to be involved in the proceedings: see Prince v Prince (1984) FLC 91-501 @ pp 79,078 per Evatt CJ, pp 79,084 per Fogarty J and pp 79,078 per Pawley J."
THE SUBMISSIONS OF THE HUSBAND
In the husband's amended summary of argument dated 19 June 2001, Ms Johns of Counsel, having set out the first question raised by the Case Stated, submitted that the answer to it should be "no". For the sake of convenience we here repeat the first question:
"1.Whether in light of the decision of Re Wakim; Ex Parte McNally and Ors (1999) 163 ALR 270, and Smith v Smith (No.3) (1986) FLC 91-732, the Family Court of Australia’s jurisdiction in a “matrimonial cause” under S. 4(1)(ca) of the Family Law Act 1975 is restricted to the determination of the Family law claim or proceeding, and does not (by way of accrued jurisdiction) extend beyond to the litigious and justiciable controversy:
(a)under State law; or
(b) pursuant to common law or at equity;
between a party to a marriage or former marriage and a third party of which the Family law claim or cause of action forms part?"
Counsel then further submitted:
“1(a)the Family Court’s jurisdiction is not restricted to the determination of the Family law claim or proceeding;
(b)the Family Court’s jurisdiction does, by way of accrued jurisdiction, extend beyond to the litigious and justiciable controversy under State law or pursuant to common law or at equity between a party or parties to a marriage (or former marriage) and a third party.”
The submissions continued:
2.That the Federal Court of Australia is possessed of accrued jurisdiction was confirmed by the High Court of Australia in the decision of Phillip Morris Inc. v. Adam P Brown Male Fashion Pty Ltd (1981) 148 CLR 457.
3.That position was further considered and expanded upon by the majority judgement of the High Court of Australia in the decision of Fencott and Others v. Muller and Another (1983) 152 CLR 570, the majority there preferring a broader interpretation as to the scope of the application of accrued jurisdiction. At page 608 of the judgement, the majority stated:-
“What is and what is not part of the one controversy depends on what the parties have done, the relationships between or among them and the laws which attach rights or liabilities to their conduct and relationships. The scope of a 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 judgement whether a non-federal claim and a federal claim joined in a proceeding are within the scope of one controversy and thus within the ambit of a matter.”
4.Most recently, in the High Court decision of Re Wakim; Ex Parte McNally and Ors (1999) 73 ALR 839 (which struck down the cross vesting legislation with respect to state jurisdiction being conferred on federal courts), the joint judgement of Gummow and Hayne JJ confirmed that a federal court (as opposed to the Federal Court) has accrued jurisdiction. At page 868 they stated:-
“It must now be regarded as established that the jurisdiction of a federal court having jurisdiction in a matter arising under a law made by the Parliament is not “restricted to the determination of the federal claim or cause of action in the proceeding, but extend[s] beyond that to the litigious or justiciable controversy between the parties of which the federal claim or cause of action forms part”.”
5.The Full Court of the Family Court (Fogarty, Strauss and Nygh JJ) has also previously considered the question as to whether the Court is possessed of accrued jurisdiction in the case of McKay v. McKay (1984) FLC 91-573. Nygh J held at page 79,639 that:-
“Whatever may have been the position prior to November, 1983 under the previous version of sec. 31(1)(a), which invested the Family Court only with jurisdiction in respect of “matrimonial causes instituted or continued under the Act”, the present version of sec. 31(1)(a) on the face of it, invests the Family Court with an accrued jurisdiction provided it arises as a non-severable part of a matrimonial cause...
the crucial question is the relationship of the issues with each other as they have emerged from the pleadings. The fact that the parties to the federal claim and the non-federal claim are not identical does not per se render those claims severable.”
6.The High Court of Australia has also considered the question of whether the Family Court had accrued jurisdiction in the case of Smith v. Smith (No. 3)(1986) FLC 91-732. The High Court was there called upon to determine whether the Family Court had accrued jurisdiction to approve a release pursuant to s. 31 of the Family Provisions Act 1982 (NSW). Whilst the High Court there determined that the Family Court was not possessed of accrued jurisdiction to grant the release under the New South Wales legislation, the Court made no finding that the Family Court does not have accrued jurisdiction in the appropriate case. Indeed, quite the opposite may be implied as at page75,331 Gibbs C.J., Wilson and Dawson JJ held:-
“The foundation of the argument is the proposition that when jurisdiction is conferred on a federal court in a matter within the meaning of sec. 75 or 76 of the Constitution, the court has jurisdiction to determine all the questions which form part of the matter, including questions which in themselves are not federal questions, i.e. not questions which would answer one or other of the descriptions contained in sec. 75 or 76. Quite clearly, under the Constitution, the jurisdiction conferred on a federal court cannot be wider than the matters mentioned in sec. 75 and 76. However, the view that has been accepted by the majority of the Court in a line of cases commencing with Philip Morris Inc. v. Adam P. Brown Male Fashions Pty. Ltd. (1981) 148 C.L.R. 457; (1981) ATPR ¶40‑197, is that the grant of jurisdiction to determine a matter carries with it jurisdiction to determine the whole matter, and that ''a 'matter' is a justiciable controversy which must either be constituted by or must include a claim arising under a federal law but which may also include another cause of action arising under another law, provided it is attached to and is not severable from the former claim'' : Fencott & Ors v. Muller & Anor (1983) 152 C.L.R. 570 at p. 606; (1983) ATPR ¶40‑350 at p. 44,221 . In Stack v. Coast Securities (No. 9) Pty. Ltd. (1983) 154 C.L.R. 261 at p 293: (1983) ATPR ¶40‑397 at p. 44,655 , Mason, Brennan and Deane JJ. affirmed the view that the Constitution gave power to the Parliament ''to give authority to federal courts to decide the whole of a single justiciable controversy of which a federal issue forms an integral part'' . For present purposes, these propositions may be accepted as being correct.”
It is apparent from the High Court’s judgement (sic) that accrued jurisdiction was not limited to the Federal Court as it specifically referred to such jurisdiction being conferred upon “a federal court”. Having regard to that judgement (sic), it is submitted that the Family Court, like the Federal Court, is seized of accrued jurisdiction.
7.More recently, the Family Court revisited the issue in the case of Lawson v. Lawson and Wallmans (1999) FLC 92-874. In considering the matter, Lindenmayer J. stated at page 86,375 as follows:-
15.It is now established beyond doubt, by the decisions of the High Court to which I have earlier referred, that the Constitution gives the Federal Parliament the power ''to give authority to federal courts to decide the whole of a single judiciable controversy of which a federal issue forms an integral part'' : per Mason, Brennan and Deane JJ in Stack v Coast Securities (supra ) at 293.
16. It is also established by those decisions that ''the grant of jurisdiction to determine a matter carries with it jurisdiction to determine the whole matter, and that 'a matter' is a justiciable controversy which must either be constituted by or must include a claim arising under a federal law but which may also include another cause of action under another law, provided it is attached to and is not severable from the former claim'' : per Gibbs CJ, Wilson and Dawson JJ in Smith v Smith (No 3) (1986) FLC ¶91‑732 at 75,331 quoting from Fencott v Muller (supra ) at 606.
17.However, the High Court has not yet determined authoritatively, at least expressly, that the Family Court of Australia has been invested by the Federal Parliament with accrued jurisdiction in non‑Federal matters, and Gibbs CJ and Wilson and Dawson JJ, in their joint judgment in Smith (No 3) (supra) at 75,331‑75,332, expressed doubt about that, at least in the context of the proceedings which were then before that Court.
18.In Ireland and Ireland (1986) FLC ¶ 91‑731, I had occasion, prior to the High Court's decision in Smith (No 3), to consider whether the Family Court of Australia has any accrued jurisdiction, and after referring to the division of opinion within this Court, exemplified in the decisions of the Full Court in Smith and Smith (No 2) (1985) FLC ¶91‑604 and McKay and McKay (1984) FLC ¶91‑573, concluded that I favoured the view that the Court has such jurisdiction.
19. For the purposes of these proceedings I am content to assume, without deciding, that in a proper case this Court, no less than the Federal Court, has accrued jurisdiction to determine the non‑federal aspects of a single justiciable controversy which also involves a federal issue which is within the Court's primary jurisdiction conferred by the Act (emphasis added).
8.The Full Court of the Family Court of Australia revisited the issue of accrued jurisdiction in the case of Ferrall and McTaggart (trustees for Sapphire Trust) & Ors v Blyton (2000) FLC ¶93‑054. The Full Court, comprising of Nicholson CJ, Kay and Lindenmayer JJ., was called upon to consider the judgement (sic) of O’Ryan J. that the Family Court does have accrued jurisdiction. The Full Court left the question of the Court’s accrued jurisdiction open.
9.Whilst not called upon to directly determine the question of accrued jurisdiction in the Family Court, the High Court did, in the decision of DJL v. The Central Authority (2000) FLC 93-015 consider the inherent jurisdiction of the Family Court and held at page 87,268 as follows:-
24.Section 21(1) of the Family Law Act provides that a court ''to be known as the [ Family Court] is created'' by that statute. Original jurisdiction is conferred on the Family Court by s 31 and appellate jurisdiction by s 93A(1). Jurisdiction is also conferred by other statutes, including the Child Support Act (ss 101, 102, 105), the Bankruptcy Act 1966 (Cth) (s 35A), and the Trade Practices Act 1974 (Cth) (s 86B).
25.The Family Court is thus not a common law court as were the three common law courts at Westminster. Accordingly, it is ''unable to draw upon the well of undefined powers'' which were available to those courts as part of their ''inherent jurisdiction''[29]. The Family Court is a statutory court, being a federal court created by the Parliament within the meaning of s 71 of the Constitution. A court exercising jurisdiction or powers conferred by statute ''has powers expressly or by implication conferred by the legislation which governs it'' and ''[t]his is a matter of statutory construction''; it also has ''in addition such powers as are incidental and necessary to the exercise of the jurisdiction or the powers so conferred''[30] . It would be inaccurate to use the term ''inherent jurisdiction'' here[31] and the term should be avoided as an identification of the incidental and necessary power of a statutory court[32] .
10.Hence, it is submitted that the question of whether the Family Court has accrued jurisdiction is a matter of statutory construction. Having regard to the weight of authority as to the interpretation of the Family Court’s powers pursuant to s. 31 of the Family Law Act 1975 (as outlined above), it is submitted that the Family Court is possessed of such jurisdiction.
11.The opposite view has been expressed most strongly by Strauss J. in the decision of McKay (supra) and Fogarty J. certainly expressed his reservations as to the Court’s accrued jurisdiction in the decision of Prince v. Prince (1984) FLC 91-501. Strauss J. expresses the view that the Court is not invested with accrued jurisdiction, he adopting a narrow interpretation of the Court’s powers.
12.It is respectfully submitted that those views misinterpret the nature of the Family Court’s jurisdiction. It is undisputed that the Family Court has jurisdiction to determine disputes between parties to a marriage.
13.The nature of the Court’s accrued jurisdiction is to provide a remedy to those parties to a marriage in very limited circumstances, namely:-
a.where the affairs of the parties to a marriage are inextricably interwoven with the affairs of a third party; and
b.in order to determine the dispute between the parties to a marriage, it is necessary for the Court to also determine those matters involving the third party.
14.Such disputes share a common sub-stratum of facts as described in decisions such as Fencott v. Muller (supra). In those circumstances, it is submitted that the Family Court is properly invested with accrued jurisdiction to enable it to provide a remedy to the parties to a marriage and resolve the dispute between them which of necessity involves the third party."
The submissions of the husband then proceed to give specific responses to the remaining three questions as follows:
"Question 2:-
If the answer is “no” to Question 1, what are the indicia, criteria, factors or considerations that will invoke the exercise of the Court’s accrued jurisdiction in the circumstances posited in question 1?
It is submitted that the criteria enunciated in the High Court in the decision of Fencott v. Muller (supra) and the Family Court in the decisions of Lawson v. Lawson and Wallmans (supra) and Ferrall and McTaggart (trustees for Sapphire Trust) & Ors v Blyton (supra) are the matters appropriate to take into account in determining whether the Court should exercise its accrued jurisdiction, namely:-
a.what the parties have done;
b.the relationships between or among them; and
c.the laws which attach rights or liabilities to their conduct and relationships;
d.whether the claims are part of a single justiciable controversy and in determining that question whether the claims are “attached” to and not “severable” or “disparate”;
e.whether the claims are non-severable from a matrimonial cause and arise out of a common sub-stratum of facts.
Question 3:-
If the answer to question 1 [sic] “no”, does the Family Court have power to extend its accrued jurisdiction to the determination of an issue against a third party where that third party refuses to take part in the proceedings?
It is submitted that the answer to that question is yes. The Court’s exercise of its accrued jurisdiction is no different to its exercise of any other power within the framework of the Family Law Act 1975.
To confer upon a third party special privileges or rights by virtue of their status as a third party is to potentially deny the other parties to the proceedings their proper entitlements.
Accordingly, it is submitted that provided that a third party has notice of the proceedings against it listed before this Court and the Court is duly satisfied that such notice has been given, the Court is empowered to act as it would in any other undefended proceeding before it.
Question 4:-
If the answer to questions 1 and 3 are “no” how are the accrued proceedings to go forward in the Family Court?
This question reinforces the answer to question 3 above as it highlights the difficulties that would be faced by the Court were it rendered powerless to determine matters which involved unwilling third parties. Clearly, the Court must be invoked with power to determine matters in those circumstances."
Since these submissions were made there has been one further reported decision in this Court on this topic, namely the decision of Jerrard J in C and C and C: Accrued jurisdiction (2001) FLC ¶93-076. In that case his Honour also reviewed some additional authorities.
The facts in C and C and C were comparable to the present case in that the dispute concerned a single asset and the degree to which the husband, the wife and a third party each held interests in a certain property. The third party participated in the proceedings before Jerrard J but that is not a material difference for present purposes. His Honour said at paragraphs 11- 19:
“11.… in this case in which the husband's only asset of value is his interest in that property, the wife's only asset of value is her claimed interest in that property, and the third party's only asset of value is his claimed interest in that property, there is one justiciable controversy between these three people, namely who it is who has the beneficial ownership of this property at Springwood and in what proportions. It is necessary to make findings of fact about that to determine the matrimonial cause which is being heard, and I am asked in addition and by consent to make orders that bind the third party. I repeat that the husband and wife each claim in their affidavit and their applications that the third party has a lesser beneficial interest than either of them, namely a 20 per cent or one-fifth interest, and that in toto between them they have about an 80 per cent beneficial interest. The third party claims a very different situation.
12.It has been authoritatively held that:
"A Court exercising federal jurisdiction has jurisdiction to determine matters arising under a law made by the Parliament investing the Court with that federal jurisdiction, and that jurisdiction is not restricted to the determination of the federal claim but extends beyond that to the litigation of any justiciable controversy between parties of which the federal claim or cause of action forms part.''
I am quoting there from the majority judgment in Re Wakim; Ex parte McNally (1999) 163 ALR 270 at paragraph 135, which portion of that judgment was itself a citation from the judgment in Stack v Coast Securities (No 9) Pty Ltd (1983) 154 CLR 261 , and the citation comes from page 290 of the CLR report. The High Court said (in Stack v Coast Securities), and the majority said by way of repetition in Re Wakim , as follows, and I quote:
"What is and what is not part of the one controversy depends on what the parties have done, the relationships between or among them, and the laws which attach rights or liabilities to their conduct and relationships. The scope of a controversy which constitutes a matter is not ascertained merely by reference to 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. 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 proceeding are within the scope of one controversy and thus within the ambit of a matter.''
13. The majority judgment in Re Wakim went on, at paragraph 140, to observe in part that what is a single controversy is sometimes determined by asking whether or not if proceedings were tried in different Courts there could be conflicting findings made on one or more issues common to the two proceedings. If so, that would indicate there is but a single matter. There is also but a single matter if different claims arise out of a common substratum of fact.
14. Here, in my opinion, determining the question of whether or not the husband and wife's claims that they possess up to 80 per cent of the beneficial interest in this real property are accurate, has a common substratum of fact in determining the assertion by the third party that he has at all times had a 50 per cent legal and beneficial interest in that property, unaffected by any promises or actions of others. Not only do I think there is a common substratum of fact in the claims made by each of the husband and wife of the allegedly less interest that the third party has than either of them and those claims by the third party to the contrary, but I also think, as I have said, that it is necessary to establish what are the beneficial interests in that property, to determine what property there is for division between the husband and wife. Accordingly, I am satisfied that it is necessary to determine the non-federal dispute between the husband and wife on the one hand and the third party on the other, when determining the federal dispute between the husband and wife as to the division of their property between them.
15.I am satisfied, therefore, that in those circumstances, if this Court has a capacity to exercise an accrued jurisdiction, this is an appropriate case in which to do it. The circumstances I have described in my judgment are a description of facts which do make the determination of a non-federal issue an essential step in litigation on a federal matter. The Court is certainly asked to make orders in the federal matter which must reflect the findings necessarily made in determining both the federal and non-federal issues. I am satisfied it is just and convenient to all parties to make orders in these proceedings, if I have an accrued jurisdiction.
16. On the question of whether there is an accrued jurisdiction in this court, opinion is divided both at single-judge level and appellate level. Perhaps I should say opinion is divided at single-judge level, and the matter has never been determined at appellate level. The most recent decision of which I am aware on this matter is that of the Full Court of this Court in a matter of Wade-Ferell and Wade-Ferrell and Read (2001) FLC ¶93-069. In that case, the Full Court left open, as have earlier Full Courts, the issue of whether or not this Court has an accrued jurisdiction, but my reading of the judgment satisfies me that the Court leaned towards the view that this Court does.
17.I note that the issue was left open by the Full Court of this Court in the judgment in the matter of Friis, published on 7 July 2000, although the Full Court of this Court had been extended an invitation to make a final ruling on the matter by the Queensland Court of Appeal, in a judgment published relevantly in (2000) FLC ¶93-009; 26 Fam LR 205. Lindenmayer J in a matter of Ireland and Ireland (1986) FLC ¶ 91-731, Evatt CJ in a matter of Smith and Smith (No 2) (1985) FLC ¶91-604, and Nygh in a matter of McKay and McKay (1984) FLC ¶ 91-573, have all expressed the opinion that an accrued jurisdiction does exist for exercise in this Court. Contrary views have been expressed by Fogarty and Strauss JJ respectively in the matters of Smith and McKay respectively.
18.I prefer, with respect, the views of Lindenmayer J, Evatt CJ, and Nygh J, and I am satisfied that there was no reason for distinguishing this federal Court from any other federal Court, insofar as the exercise of an accrued jurisdiction is concerned. Here, there is the one piece of property in which it is necessary to determine the beneficial interests held respectively by the parties before the Court, and it is not possible to exercise the matrimonial jurisdiction of the Court without doing that.
19. I am satisfied that, in the circumstances, it is appropriate to exercise the jurisdiction obviously needed to be exercised; and that that jurisdiction includes the jurisdiction to make findings, and orders based on those findings, in the controversy between the married parties and the third party as to the extent of his interest. Accordingly, I am satisfied that I have the capacity to do that and that I should.
OUR APPROACH
The starting point for resolution of the first question must be the recent comments of the High Court in Re Wakim which, as submitted on behalf of the husband, suggest that no distinction per se is to be drawn between federal courts so far as “accrued jurisdiction” is concerned. However, since the remarks were obiter, they do not provide a complete answer.
We consider that it is necessary to closely examine the decisions of Strauss J in McKay, and of Fogarty J in Prince, having regard to the reliance placed upon those decisions by the submissions for the wife and the concession on behalf of the husband that those judgments run strongly counter to the proposition that the Court has an accrued jurisdiction. In addition, attention needs to be paid to the judgments of the Full Court in Smith (No.2) and the High Court in Smith (No. 3) as they are pertinent to consideration of the opinions expressed by Strauss J and Fogarty J.
Prince's case
In Prince, the husband and the wife had applied to the Family Court for property orders under s. 79 of the Family Law Act 1975. While those proceedings were pending, the appellant, General Credits Australia Limited, instituted proceedings in the Supreme Court of Queensland against the husband and others, seeking payment of approximately $9,000,000 alleged to arise from default in repayments under a mortgage. The husband was sued under a deed of indemnity or guarantee which he and other defendants had executed in support of the mortgage. The husband filed a defence in that action in which he alleged, inter alia, that the guarantee or indemnity was unenforceable against him.
The trial Judge refused to grant an adjournment in the s.79 proceedings until such time as judgment had been delivered by the Supreme Court of Queensland and refused to grant General Credits either leave to intervene or leave to be heard. General Credits appealed to the Full Court.
Fogarty J, on whose judgment the wife relies, said this at 79,084-5:
"My present view relevantly to the Family Court and so far as this matter is concerned is:
(1) Speaking generally, although the Family Court is a Federal Court and a superior court of record (sec. 21), it is a Court established by the Parliament for a specific purpose - namely the resolution of disputes between the parties to a marriage or former marriage arising out of that relationship. There are a number of legislative exceptions to that general statement contained in the Act itself and those exceptions have been enlarged by the recent amendments to the Act. But I regard the Court as being a Court primarily established for the purpose of determining disputes of the type to which I have referred.
(2) It follows that generally speaking third parties are not bound by determinations of this Court. Again, there are obvious exceptions to that within the legislation itself. In addition, different considerations may apply where a third party takes part in the proceedings - this is a matter to which I will refer specifically hereafter. Also power exists to make some orders of a temporary or interim nature affecting third parties. Putting aside legislative exceptions and putting aside cases where a third party has taken part in the proceedings and temporary or interim orders, there is not in my view jurisdiction in the Family Court to determine issues in controversy between a party to a marriage or former marriage and an unconnected third party. ''Determine'' in that sense meaning binding on those persons. The reference in the judgment of Pawley J. to sec. 78(3) supports this view.
(3) Even if that overstates the matter, I doubt whether the connection in this case between the Family Court proceeding, namely the claim under sec. 79 between the parties to this former marriage, and the non-federal proceeding, namely the claim against the husband by General Credits under the guarantee, is sufficiently proximate to attract the accrued jurisdiction principle.
(4) Even if that view be wrong, the question whether the Family Court should assume accrued jurisdiction is a matter of discretion depending upon the balancing of relevant interests, including the degree of connection between the relevant disputes. In this case it would not in my view be appropriate in the exercise of any such discretion for the Family Court to assume that jurisdiction. The dispute is largely unconnected with the controversy between the parties to this former marriage. It is a serious commercial dispute listed for hearing before the appropriate State Court designated to determine such issues. It involves serious and complex issues of law and fact and it involves, besides the husband and General Credits, a number of other parties whose rights may be affected at least in an indirect way by an attempted determination by the Family Court.
My view is that it is not within the jurisdiction of the Family Court to involve itself in that controversy; if it is within jurisdiction then as a matter of discretion it is inappropriate for this Court to attempt a determination of that matter. Amongst other obvious reasons for the latter conclusion are the absence of pleadings in this Court, the difficulty of envisaging precisely how that proceeding would go forward in the Family Court in the midst of the general sec. 79 claim of the parties to the former marriage and the other matters to which I have referred." (emphasis added)
The passages we have emphasised highlight the qualified nature of Fogarty J's views, and that was readily understandable given the facts of the case. His Honour said at 79,084:
"I doubt whether the disputes between the husband and wife on the one hand and between the husband and General Credits on the other are ''aspects of a single matter'', or that they depend on ''common transactions and facts'', or that they derive from ''a common nucleus of operative fact''. Rather the characterisation of ''completely separate and distinct'' appears to me closer to the mark."
His Honour then said this at 79,086:
"I prefer to leave open the question of the existence or otherwise of accrued jurisdiction in respect of the Family Court in relation to non-federal matters bearing a relevant connection and arising between the parties to the marriage or former marriage until that issue more directly arises."
In our view Prince is not an authority which precludes the Full Court from finding that the Full Court has an accrued jurisdiction.
McKay's case
This was a Case Stated which inter alia raised the question of the Court's accrued jurisdiction. It was heard by Fogarty, Strauss and Nygh JJ and they each held that on the facts of the case the court did not have an accrued jurisdiction to deal with the wife's claim against a company.
Nygh J affirmatively found that the Family Court of Australia may exercise an accrued jurisdiction but that the prerequisite connection did not exist in this case. He placed significance upon amendments that had been made to s. 31 of the Family Law Act 1975. In its original form s. 31(1) of the Family Law Act 1975 was as follows:
"31(1) The Family Court has jurisdiction in-
(a) matrimonial causes instituted or continued under this Act;
(b) proceedings instituted or continued under the Marriage Act 1961-1973, other than proceedings under Part VII of that Act;
(c) matters arising under a law of a Territory concerning-(i) the adoption of children;
(ii) the guardianship, custody or maintenance of children; or
(iii) payments of a kind referred to in section 109; and
(d) matters in which jurisdiction is conferred on it by law made by the Parliament."
That provision was amended by the Family Law Amendment Act 1983 (Act No 72 of 1983) so that a reference to “matters” was introduced into s. 31(1) (a) and (b) as follows:
"Jurisdiction is conferred on the Family Court with respect to:
(a) matters arising under this Act or under the repealed Act in respect of which matrimonial causes are instituted or continued under this Act;
(b) matters arising under Marriage Act 1961 in respect of which proceedings (other than proceedings under Part VII of that Act) are instituted or continued under that Act;
(c) matters arising under a law of a Territory (other than the Northern Territory) concerning:
(i) the adoption of children;
(ii) the guardianship, custody or maintenance of children; or
(iii) payments of a kind referred to in section 109; and(iv) the property of the parties to a marriage or either of them, being matters arising between those parties other than matters referred to in the definition of 'matrimonial cause' in sub-s 4(1); or
(v) the rights and status of a person who is an ex-nuptial child, and the relationship of such a person to his parents; and
(d) matters (other than matters referred to in any of the preceding paragraphs) with respect to which proceedings may be instituted in the Family Court under this Act or any other Act."
Nygh J said at 79,638-9:
"The words ''matters arising'' repeat the language found in sec. 76(ii) of the Constitution whereby the Parliament may make laws conferring original jurisdiction on the High Court ''in any matter (ii) arising under any laws made by the Parliament'' . By virtue of sec. 76(ii) of the Constitution, such jurisdiction may be conferred upon a Federal Court, including the Family Court.
It is now established that the word ''matter'' as used in Ch. III of the Constitution and by inference as used in sec. 31(1) of the Family Law Act is not to be confined to ''cause of action or claim for relief'' . As Mason J. said in Philip Morris Inc. v. Adam P. Brown Male Fashions Pty. Ltd. (1981) ATPR ¶40-197 at p. 42,703; (1981) 148 C.L.R. 457 at p. 512:
". . . The lesson to be learned from the authorities is that the Court having jurisdiction to determine a matter falling within sec. 75 and 76 giving rise to the exercise of federal jurisdiction has jurisdiction to decide an attached non-severable claim.
The classification of a claim as 'non-severable' does not necessarily mean that it is, or must be, united to the federal claim by a single claim for relief, though this is a common illustration of a non-severable claim. The non-severable character of the attached claim may emerge from other aspects of the relationship between the federal and the attached claim. For example, it may appear that the resolution of the attached claim is essential to a determination of the federal question. Likewise, it may appear that the attached claim and the federal claim so depend on common transactions and facts that they arise out of a common substratum of facts. In instances of this kind a court which exercises federal jurisdiction will have jurisdiction to determine the attached claim as an element in the exercise of its federal jurisdiction.
In the ultimate analysis the validity of this interpretation rests upon the proposition that 'matters' in sec. 75 and 76 has the broad content ascribed to it at the turn of the century by those who were familiar with the course of events which led to the adoption of the Constitution.''
The test for determining non-severability proposed by Mason J. in the passage above cited now has the support of the majority of the High Court: see Fencott & Ors v. Muller & Anor (1983) ATPR ¶40-350 at pp. 44,221-44,222; (1983) 46 A.L.R. 41 at p. 67 per Mason, Murphy, Brennan and Deane JJ.
It can be assumed that the Parliament when it amended sec. 31(1) of the Family Law Act in 1983 with the benefit of those remarks intended the word ''matters'' to have a similar ambit. The words ''arising under this Act or under the repealed Act'' must not be read as imposing a limitation. They identify the federal core in respect of which the ''matter'' arises. As explained by the High Court a non-severable non-federal claim may arise as part of a matter arising under the Family Law Act. The requirement that a matrimonial cause must have been instituted in respect of a ''matter'' cannot be taken to mean that the matter can only consist of a ''matrimonial cause''. That would be to confuse ''matter'' with ''cause of action or claim for relief'', a construction which was rejected by the High Court in Philip Morris.
Whatever may have been the position prior to November 1983 under the previous version of sec. 31(1)(a), which invested the Family Court only with jurisdiction in respect of ''matrimonial causes instituted or continued under the Act'', the present version of sec. 31(1)(a) on the face of it, invests the Family Court with an accrued jurisdiction provided it arises as a non-severable part of a matrimonial cause."
Strauss J stated at 79,629 that he had reservations about the views expressed by Nygh J. Strauss J said at 79,633:
"As much of the argument concerning ''accrued jurisdiction'' turns upon decisions dealing with the jurisdiction of the Federal Court, it is convenient to refer here to some of the provisions of the Federal Court of Australia Act 1976. Reference has already been made to sec. 5(2) which makes the Federal Court a court of law and equity. By sec. 19(1) of the Federal Court of Australia Act:
"The Court has such original jurisdiction as is vested in it by laws made by the Parliament. ''
Section 21 of that Act is as follows:
"(1) The Court may, in relation to a matter in which it has original jurisdiction, make binding declarations of right, whether or not any consequential relief is or could be claimed.
(2) A suit is not open to objection on the ground that a declaratory order only is sought. ''
Section 22 of the Federal Court of Australia Act provides:
"The Court shall, in every matter before the Court, grant, either absolutely or on such terms and conditions as the Court thinks just, all remedies to which any of the parties appears to be entitled in respect of a legal or equitable claim properly brought forward by him in the matter, so that, as far as possible, all matters in controversy between the parties may be completely and finally determined and all multiplicity of proceedings concerning any of those matters avoided.''
By sec. 40 of that Act there may be a trial with a jury in the Federal Court.
The Family Court has no general jurisdiction to award damages which is the most usual remedy at law. Its power to deal with financial matters is by reference to principles which may be quite different from those applied in a ''court of law and equity''. It has no general equitable jurisdiction. There is no general power to make declarations or to grant equitable remedies. There can be no trial with a jury in the Family Court.In my opinion, the changes made to sec. 31(1) do not invest the Family Court with either the jurisdiction or the powers of a court which has general jurisdiction in matters of law and equity."
Strauss J continued at 79,633-4:
"Section 31(1)(a) confers on the Family Court jurisdiction with respect to ''matters arising under this Act . . . in respect of which matrimonial causes are instituted . . . under this Act''. To come within the jurisdiction specified in this paragraph, the matter must arise under the Family Law Act and it must be one in respect of which a matrimonial cause may be instituted.
For the purposes of the present case, the matter arising under this Act in respect of which a matrimonial cause has been instituted is the controversy arising out of the claim for an alteration of interests in the property of the parties in proceedings between the parties to the marriage with respect to their property, being proceedings in relation to completed proceedings for dissolution of marriage.
In Carter v. Egg and Egg Pulp Marketing Board (Vict.) (1942) 66 C.L.R. 557 at p. 579 Latham C.J. said of the word ''matters'':
"But the meaning of a word with so many possible meanings must be affected by the context in each case where it is used. ''
In my view, in sec. 31(1)(a) of the Family Law Act the word ''matters'' refers to matters arising in proceedings for remedies which the Court has power to grant.
In Thomson Australian Holdings Pty. Ltd. v TPC & Ors (1981) ATPR ¶40-234 at p. 43,128; (1981) 148 C.L.R. 150 at p. 161 Gibbs C.J., Stephen, Mason and Wilson JJ. said:
"When a specific statute which invests the Court with jurisdiction in matters of a particular class does so in such a way as to limit the power of the Court to grant relief of a particular kind, there is no basis for transcending that limitation by recourse to the general provisions of the Federal Court of Australia Act.''
Later on at ATPR p. 43,129; C.L.R. pp. 161-162 their Honours said:
"The Commission rightly emphasizes that, in general, a distinction is to be made between the jurisdiction of a court to hear and determine a matter and the power of that court to grant relief of a particular kind. It says that the relevant grant of jurisdiction to the Federal Court is to be found, not in s. 80 of the Trade Practices Act, but in s. 86, and that once it is perceived that the grant of jurisdiction flows from s. 86, it becomes apparent that there is attracted to the exercise of the jurisdiction thereby granted all the powers to grant relief contained in both the Trade Practices Act and the Federal Court of Australia Act. Thus, it is said, since the court is seised of jurisdiction, because, for example, the action is one for the recovery of penalties, the court has power to grant an injunction which does not conform to s. 80. This is to assume, wrongly as it transpires, that in this case the grant of jurisdiction is quite independent of the grant of power to grant relief. ''
In my opinion, under the Family Law Act 1975, the grant of jurisdiction to the Family Court is not independent of the grant of power to grant relief. The meaning of the word ''matters'' in the context of sec. 31 is to be construed by reference to the powers which are conferred on the Family Court."
At 79,902, Pawley SJ took the view that:
“… the answer can be reached without a broad based inquiry into the so called "accrued jurisdiction" which may or may not be attached to the Family Court but rather by an examination, in the particular context of this case, of what may constitute a matrimonial cause within the meaning of sec 4 of the Act. If this is so, it does not become necessary to determine whether sec 31 of the Act operates in its present form to invest the Family Court with extended jurisdiction of a more general kind although it may become necessary to determine whether in the circumstances sec 33 of the Act has application. It seems to me that in this particular case it is not necessary to rely upon any "inherent jurisdiction", as statutory provision already exists.”
At 79,908 – 79,911, Fogarty J identified a number of factors that gave him doubt about the accrued jurisdiction of the Family Court of Australia:
“(a) Whilst it is true that it is not necessary or usual for legislation to make a grant of accrued jurisdiction expressly, the legislation establishing a federal court may expressly or impliedly exclude it. Looking at the overall scheme of the Family Law Act, in my view it represents a legislative attempt to confer jurisdiction on the Family Court in relation to a specific subject matter only, namely the resolution of matrimonial disputes between parties to a marriage or former marriage and arising out of that relationship. There are specific exceptions or additions to that to which legislature directly refers. I briefly referred to this aspect in Prince's case. Also, the legislative scheme and powers given under the Family Law Act were the subject of extensive review by Strauss J. in McKay's case and I need not repeat those matters. They are in contrast to the wider range of jurisdiction and power given to the Federal Court of Australia.
(b) Speaking generally it is now established law that the Family Court does not have jurisdiction to make determinations which adversely affect the rights of a third party ¾ see the well known passage in the judgment of Gibbs J. (as he then was) in Ascot Investment Pty. Ltd. v. Harper (1981) 33 A.L.R. 631, and the more recent decision of the High Court in Re Ross-Jones; Ex parte Green (1984) FLC ¶91-555. However, the principle of accrued jurisdiction may have in appropriate circumstances application so as to affect the rights of third parties ¾ see for example Fencott v. Muller (supra) and Kennedy v. Australasian Coal and Shale Employees Federation (Beaumont J., 13 August 1983). Thus to uphold accrued jurisdiction in the Family Court one would be forced to the conclusion that the principle in this Court is of a different and more limited character than the principle generally allows.
(c) It is inconsistent with the judgment of the High Court in Re Ross Jones; Ex parte Beaumont (1979) FLC ¶90-606 ; (1979) 144 C.L.R. 504. There the parties to the marriage had been in partnership with one another, no outsider being involved. The wife sought a declaration that the partnership still existed, an order that a receiver be appointed, that the books of account and the assets be handed to a receiver and for the preparation of partnership accounts. The High Court denied the existence of power in the Family Court to make those orders. It is true that those views may be obiter in the sense that the proceeding was determined on another basis, namely that for other reasons a writ of mandamus should not issue. It is also true that this case preceded by several years the accrued jurisdiction cases as they have developed in the High Court. On the other hand sec. 33 of the Family Law Act was referred to in several of the judgments. In my view the judgments of the Court constitute a strong affirmation of views which were inconsistent with the existence of accrued jurisdiction. One would have thought that if accrued jurisdiction has operation in the Family Court it obviously would have had operation in that case. That decision may support the argument advanced for the State of New South Wales in this case as to the absence of power in the Family Court. Further, the remarks of the Chief Justice in Perlman (1984) FLC ¶91-500 appear to me to support a continuance of this view. At p. 79,058 the Chief Justice said:
"The view apparently taken in Harding and Gibson (1979) FLC ¶ 90-665 at p. 78,547 and Makin (1980) FLC ¶ 90-818 , that the Family Court can apply the remedies available under the general law of contract, is erroneous; it was correctly said in Power and Power (1980) FLC ¶90-878 at p. 75,556, that the only remedies for enforcement which may be exercised by the Family Court are those expressly provided by the Act itself. ''
Then there is the more recent decision of the High Court in Re Ross-Jones; Ex parte Green (supra). Judgment in that case was delivered after argument in this case and consequently was not the subject of submissions before us. However, it appears to me to evidence the continuance of an approach which is inconsistent with the view contended for in this case. The references in that case to sec. 33 and ''associated jurisdiction'' do not appear to me to have application to the issue in this case: see especially the judgment of the Chief Justice at p. 15 of his judgment.
(d) The matter which caused me the most difficulty, and the matter which persuaded Nygh J. in McKay's case of the existence of accrued jurisdiction, is the amendment to sec. 31 of the Family Law Act.
…
The significance of the amendment is that the subsection now uses the words ''matters arising'' in para. (a) and (b) in contrast to the provision in its original form which referred to ''matrimonial causes'' and ''proceedings'' , particularly in the light of comments made on the use of such terms in cases in the intervening period, especially the Philip Morris case at p. 512. Hence the fundamental argument in this case that whatever may have been the position prior to November 1983 the formula of words now used in the legislation demonstrates an intention by the Parliament to invest the Family Court with accrued jurisdiction and/or has that effect.
If resort, viz. sec. 15AB of the Commonwealth Acts Interpretation Act, to the explanatory memorandum, the second reading speeches of the Attorney-General and of the Minister representing the Attorney-General and the parliamentary debates in relation to this amendment is permissible, they indicate that the amendments to sec. 31 were ''to expand the jurisdiction of the Family Court, in matters arising under a law of the Territory, to include all property proceedings between parties to a marriage involving the rights and status of an ex-nuptial child and that child's relationship to its parents'' (see explanatory memorandum to cl. 12 of the amending Bill), and there was no other debate or discussion of what, on the principle contended for in this case, was a most far-reaching change in the laws affecting the balance of State and Commonwealth relations. However, I mention this only in passing as the application of sec. 15AB to the issue here was not the subject of any substantial discussion before us.
The issue is far from clear but the words in sec. 31(1)(a) immediately following ''matters'' namely ''arising under this Act or under the repealed Act in respect of which matrimonial causes are instituted or continued under this Act'' may provide a limitation to the otherwise wide scope that could be given to ''matters'' and restrict it to the adjudication of disputes otherwise defined in the Act. That is, as Strauss J. said in McKay's case (supra):
"To come within the jurisdiction specified in this paragraph, the matter must arise under the Family Law Act and it must be one in respect of which a matrimonial cause may be instituted. ''
However, I recognise the force of the view in the judgment of Nygh J. in McKay's case that those words ought not to be read as imposing a limitation but as identifying the federal ''core'' in respect of which the ''matter'' arises.
(e) Finally I have considerable difficulty in taking the step involved in para. 8 and 9 referred to above. That is, that this Court has jurisdiction to deal with a matter which not only arises under a State statute but which by that statute is vested exclusively in the Supreme Court of that State. I am not convinced that those principles are as ready of acceptance in Australia as they apparently have been in the United States. Such an approach could produce a marked shift in the traditional division of power in our Constitution. In this respect I refer to the judgment of Lockhart J. in Novasonic Corporation Pty. Ltd. v. Hagemayer (Australasia) B.V. (1983) ATPR ¶40-395. There the non-federal issue which it was submitted was attracted to the Federal Court's jurisdiction was the power to wind up a company, that power being vested by State legislation in the Supreme Court of the relevant State. In rejecting that his Honour said:
"Also it must be remembered that the Companies (New South Wales) Code is part of the Commonwealth/State scheme for the regulation of companies and the security industry. It is a scheme which came into operation following extensive discussion between the Commonwealth and the States where the States have a recognised role to perform with respect, among other things, to the winding up of companies through the Supreme Court. It would be antithetic to the principle inherent in the Commonwealth/State scheme that this Court could itself direct that a company be wound up under the provisions of the Companies (New South Wales) Code. ''
The conclusion which I reach is that the Family Court of Australia does not have accrued jurisdiction and that accordingly question 2 should be answered in the negative.
That is not to say (or is to be distinguished from saying) that a court exercising jurisdiction under the Family Law Act, in the determination of a dispute which is within jurisdiction, is not empowered to determine between the parties in an authoritative way issues of fact or law necessary to that determination. In so doing it will apply the relevant law whether it is to be found in the principles of common law or equity or in a relevant statute, State or federal. For example, the title to land of the parties, presumptions of advancement, contractual obligations and their validity and enforceability. That, however, is not an exercise of accrued jurisdiction. "
Smith and Smith (No. 3)
Following judgment in Smith (No. 2) the following questions were removed into the High Court:
"(a) whether, by reason of the operation of s 109 of the Constitution, upon approval of the Family Court of Australia pursuant to s 87(3) of the Family Law Act 1975 (Cth), the release comprised in clause 7 of the deed dated 18 November 1983 between the parties was effective notwithstanding the provisions of s 31 of the Family Provision Act 1982 (NSW) and,
(b) whether if the said release was not effective as aforesaid, the Family Court of Australia nevertheless has accrued or pendent or associated jurisdiction in the present matter itself to exercise the powers of approval set out in s 31 of the said New South Wales Act."
There were two judgments delivered by the High Court - one by Gibbs CJ, Wilson and Dawson JJ and the other by Mason, Deane and Brennan JJ - both of which held that the answers to the questions should be answered in the negative. The judgments touched on the questions before us in different ways.
After finding that no inconsistency arose by reason of the operation of s. 109 of the Constitution, Gibbs CJ, Wilson and Dawson JJ said at 75,331, in a passage, part of which was advanced on behalf of the husband in this case:
“The next question is whether the Family Court itself has jurisdiction to exercise the power of approval given by sec. 31 of the Family Provision Act to the Supreme Court of New South Wales. The Solicitor-General for the Commonwealth, and counsel for the wife, in contending for an affirmative answer to that question, submitted that an application by one spouse for approval of the release of his or her rights to make an application under the Family Provision Act in relation to the estate of a deceased person is part of the same matter as the application to the Family Court for approval of a maintenance agreement containing such a release. The foundation of the argument is the proposition that when jurisdiction is conferred on a federal court in a matter within the meaning of sec. 75 or 76 of the Constitution, the court has jurisdiction to determine all the questions which form part of the matter, including questions which in themselves are not federal questions, i.e. not questions which would answer one or other of the descriptions contained in sec. 75 or 76. Quite clearly, under the Constitution, the jurisdiction conferred on a federal court cannot be wider than the matters mentioned in sec. 75 and 76. However, the view that has been accepted by the majority of the Court in a line of cases commencing with Philip Morris Inc. v. Adam P. Brown Male Fashions Pty. Ltd. (1981) 148 C.L.R. 457; (1981) ATPR ¶40-197, is that the grant of jurisdiction to determine a matter carries with it jurisdiction to determine the whole matter, and that ''a 'matter' is a justiciable controversy which must either be constituted by or must include a claim arising under a federal law but which may also include another cause of action arising under another law, provided it is attached to and is not severable from the former claim'' : Fencott & Ors v. Muller & Anor (1983) 152 C.L.R. 570 at p. 606; (1983) ATPR ¶40-350 at p. 44,221. In Stack v. Coast Securities (No. 9) Pty. Ltd. (1983) 154 C.L.R. 261 at p 293: (1983) ATPR ¶40-397 at p. 44,655, Mason, Brennan and Deane JJ. affirmed the view that the Constitution gave power to the Parliament ''to give authority to federal courts to decide the whole of a single justiciable controversy of which a federal issue forms an integral part'' . For present purposes, these propositions may be accepted as being correct.” (emphasis added)
We would pause here to note that the final sentence of this passage lends further support to the submission that subject to the facts of the case, the Family Court of Australia has an accrued jurisdiction equivalent to that of the Federal Court of Australia. It is of some significance that unlike other authorities, the proposition arose in a case where the High Court was directly considering the Family Court of Australia. However, as the facts of that case did not attract an accrued jurisdiction, this is also obiter.
Their Honours then proceeded to say at 75,331:
“The word "controversy" is hardly apt to describe the present situation between the parties, who are in agreement in seeking orders from the Family Court. If, however, one inquires what was the subject-matter for determination in the proceedings in the Family Court, the answer to that question must be that two separate matters fell for determination - first, whether the maintenance agreement should be approved and second, whether the Family Court, acting for the purposes of sec 31 of the Family Provision Act, could and should approve of the release contained in cl 7(a) of the agreement. That the questions are clearly severable is shown by the fact that they are committed by federal and State laws respectively to the decision of two different tribunals, and by the fact that approval under the Commonwealth Act is fully effective for the purposes of that Act although it has no effect whatever on the rights given by the State Act. If, however, contrary to our opinion, it be assumed that the two issues form part of a single justiciable controversy, of which the approval of the agreement forms an integral part, it does not follow that the Parliament has given the Family Court jurisdiction to resolve the whole of that controversy. Although, on the authority of the cases mentioned, the Parliament would on that assumption have power to invest the Family Court with jurisdiction, the question whether it has done so depends on the effect of the Family Law Act. For reasons we shall give, the jurisdiction of the Family Court does not extend to a "matter" of which the grant of approval under sec 31 of the Family Provision Act is a part. Such a "matter" would have to be described as one in which the parties sought finally to determine the financial relations not only between themselves, but also between each party and the personal representatives of the other.”
Mason, Deane and Brennan JJ approached the matter in a way which found the question of whether the Family Court of Australia had accrued jurisdiction unnecessary to answer. Their Honours said at 75,339:
“The second question removed into this Court is whether the Family Court has accrued, pendent or associated jurisdiction in the present matter to exercise the power of approval conferred by sec. 31 of the State Act. The answer to this question turns in the first instance on sec. 31(1)(a) of the Family Law Act, for, apart from the duplication of that provision with respect to the Family Court in virtually identical terms in sec. 39(5)(a), that is the only provision giving the court jurisdiction which might embrace an exercise of the relevant powers conferred by the State Act, there being no suggestion that the Family Court possesses any relevant inherent power. The submission is that the claim made for approval of a maintenance agreement under sec. 87(3) of the Family Law Act and the claim made for approval of a release (forming part of such a maintenance agreement) under sec. 31(3) of the Family Provision Act constitute but one single justiciable controversy, the matter for determination in the second claim being an attached and inseverable aspect of the matter for determination in the first claim - see Fencott & Ors v. Muller & Anor (1983) 152 C.L.R. 570 at p. 606; (1983) ATPR ¶40-350 at p. 44,221 ; Stack v. Coast Securities (No. 9) Pty. Ltd. (1983) 154 C.L.R. 261 at p. 293; (1983) ATPR ¶40-397 at p. 44,655 .
The submission encounters many difficulties. The power of the Supreme Court to approve a release under sec. 31 is incidental to the exercise of the principal jurisdiction of the court under sec. 7 to order provision out of the estate of the deceased person. The authority given to the Supreme Court to approve a release qualifies the old principle, which we have already discussed, that contracting out of the statutory benefits was prohibited. To acknowledge that the Family Court possessed accrued jurisdiction under sec. 31 of the Family Law Act would be to treat the power to approve a release as if it were incidental to the Family Court's jurisdiction under sec. 87(3), whereas in truth, the considerations to be taken into account under sec. 87(3) of the Commonwealth Act and sec. 31(5) of the State Act are different and are directed to different ends.
The Solicitor-General for New South Wales submitted that, in order to validly invest a federal court with accrued jurisdiction to determine a non-federal claim, the accrued jurisdiction must involve the exercise of the judicial power of the Commonwealth or something incidental to that exercise. The next step in the argument was to say that the object of a proceeding for approval of a release under sec. 31 of the State Act is to ascertain and declare, but not to enforce, what, in the opinion of the court, ought to be the rights of the parties under a State law (see Waterside Workers' Federation of Australia v. J.W. Alexander Ltd. (1918) 25 C.L.R. 434 at p. 463 ). This function, so the argument ran, stands outside the judicial power of the Commonwealth and outside the concept of ''matter'' in sec. 76 of the Constitution.
It is unnecessary to decide whether this submission is well founded. It is sufficient for us to say that if the Family Court assumed an accrued jurisdiction to make an order under sec. 31 of the Family Provision Act approving a release in a maintenance agreement, the order would none the less not be an order of the Supreme Court. It therefore would not amount to an approval by the ''Court'' which is referred to in sec. 31(3), with the consequence that the release would have no effect by virtue of sec. 31(2). It is quite impossible to read the reference to ''Court'' in sec. 31, viewed in the light of the definition of ''Court'' in sec. 6(1), otherwise than as a reference to the Supreme Court. It follows that the Family Court does not possess accrued jurisdiction to approve a release for the purposes of the State Act.”
CONCLUSION RE QUESTION 1
We have formed the view that as a matter of law, the Family Court of Australia is not restricted to the determination of a family law claim or proceeding; it 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.
We have reached this conclusion for the following reasons.
Firstly, there is no constitutional basis for not applying to the Family Court of Australia the High Court of Australia’s analysis in Philip Morris of how and why the Federal Court of Australia has and may exercise accrued jurisdiction.
Secondly, the applicability of Philip Morris, Fencott v Muller, and Stack to “federal courts”, a category which necessarily includes the Family Court of Australia, was expressly recognised by Gummow and Hayne JJ in Re Wakim and we are not aware of any contrary authority in that Court to this proposition. Indeed, the judgment of Gibbs CJ, and Wilson and Dawson JJ in Smith and Smith (No 3) would seem to be recognition by the High Court that the Family Court of Australia can have accrued jurisdiction. To our minds, previous decisions that the Family Court of Australia did not have accrued jurisdiction were based on the factual claim failing to attract the jurisdiction, rather than the fact that the jurisdiction was not available.
Thirdly, both the Federal Court of Australia and the Family Court of Australia are creatures of statute and courts of limited jurisdiction. The fact that the Family Court of Australia has a more specialised jurisdiction than the Federal Court of Australia does not provide a basis for doubting the availability of accrued jurisdiction to the Family Court of Australia. But in any event, as pointed out in DJL v The Central Authority (2000) FLC ¶93-015 which is referred to at paragraph 9 of the husband’s submissions, it should not be forgotten that the Family Court of Australia is currently invested with federal jurisdiction by Commonwealth legislation other than the Family Law Act. Fogarty J’s qualified views in Prince, Strauss J’s stronger approach in McKay, and the wife’s submissions need to be read in light of this factor.
Fourthly, for the reasons given by Nygh J in McKay and Evatt CJ in Smith and Smith (No. 2) that have been referred to above, we agree that the amendment to s. 31 of the Family Law Act by the Family Law Amendment Act 1983 gave the Court jurisdiction in “matters arising” under the principal or repealed Act “in respect of which matrimonial causes are instituted or continued” and that this legislative grant is to be distinguished from the earlier conferral of jurisdiction in “matrimonial causes” only. In keeping with conventional rules of interpretation, the grant of jurisdiction should not be read down.
Fifthly, the powers that the Family Court of Australia can exercise and the remedies it may grant were significant matters for Strauss J in McKay. With respect however, we think that his Honour may have blurred the distinction between the existence of accrued jurisdiction and the power to grant a remedy if accrued jurisdiction is exercised. The lack of power to grant an appropriate remedy demonstrated to him a lack of jurisdiction when, in our view, once the proper factual test is satisfied, the inability to grant an appropriate remedy is relevant to whether the available accrued jurisdiction should, in the exercise of discretion, be invoked. In this regard, we agree with Evatt CJ’s observation in Smith and Smith (No. 2) at 79,895 to the effect that there is a two stage process where the question of accrued jurisdiction is raised and that the question of remedy may bear upon whether accrued jurisdiction is established or if established, is appropriate to exercise:
“Of course, cases could arise where the powers necessary to deal with a particular matter, or part of a matter, are completely diverse in nature from those in respect of which express powers have been conferred as in the Novasonic case. This may suggest a lack of jurisdiction in that the issues themselves are so disparate that they do not form part of the same matter (see McKay and McKay, per Nygh J at p. 79,638). However, unless there is an obvious lack of power, the question of jurisdiction is to be determined first (ibid.).”
Sixthly, further in relation to the importance attached by Strauss J to the availability of remedies, his Honour did not give consideration to the scope of s. 80 of the Act, a matter upon which Evatt CJ placed reliance in Smith and Smith (No. 2) and about which the High Court made no adverse comment in Smith and Smith (No. 3). The Full Court of the Family Court of Australia in Davidson and Davidson (No. 2) (1994) FLC ¶92-469 gave an expansive interpretation to the ambit of the powers comprised in s. 80, and of course this case was decided subsequent to McKay. There is also the power granted in s.34 of the Act to the Court “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” – although there are questions about the scope of this provision. Those questions are unresolved. They are unnecessary and inappropriate to decide here because we think they bear upon the discretion to exercise an accrued jurisdiction which otherwise exists rather than whether the jurisdiction itself exists, and we did not have the benefit of specific argument.
Seventhly, there is the issue of the Family Court of Australia’s capacity to adjudicate and make orders with respect to third parties. The wife’s submissions conceded that orders may in limited circumstances affect the rights of third parties and that is clearly correct. Section 78 of the Family Law Act confers the power to make a declaration with respect to existing title or rights. Since the amendment of the Act in 1988, the provision is not expressly confined to the property of the parties to the marriage or either of them and there is no authority which says that such a declaration may not bind a third party. Relevantly too, the ratio decidendi of Gould and Gould ; Swire Investments Ltd (1993) FLC ¶92-434 makes clear that this is within the constitutional power of the Commonwealth Parliament in so far as s. 85 (as it then was) of the Family Law Act is concerned and, by way of obiter dicta, such validity should be assumed with respect to the exercise of other powers conferred by Part VIII of that Act. Ascot Investments and Re Ross-Jones which were considered by Fogarty J in Smith and Smith (No. 2) are not authorities which stand for a general proposition that the Family Court of Australia does not have accrued jurisdiction. Ascot Investments was decided with reference to the limitations on the Family Court’s powers under ss.80 and 114 of the Family Law Act to validly order a company or its directors to register a transfer of shares and thereby to alter the nature, incidence or extent of the parties’ property and impose new restrictions on rights or powers of third parties. Nor is Re Ross-Jones an authority for there being no accrued jurisdiction. It was not a case which directly concerned this issue.
Accordingly, the first question should be answered “no”.
Conclusion re Question 2
This question concerns the “indicia, criteria, factors or considerations that will invoke the exercise of the Court’s accrued jurisdiction in the circumstances posited in question 1”. The submissions of the husband addressed this issue directly; the wife’s did not.
The husband in his submissions has correctly identified from the authorities the matters appropriate to be taken into account in determining whether the Family Court of Australia will exercise its accrued jurisdiction. We agree those matters are the relevant indicia, criteria, factors and considerations. They are as follows:
1.what the parties have done;
2.the relationships between or among them;
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”; and
5.whether the claims are non-severable from a matrimonial cause and arise out of a common sub-stratum of facts.
We consider that a court’s assessment of these matters will allow it to determine whether it should exercise its accrued jurisdiction. As the authorities indicate, a rigid filter is difficult to define without close inspection of the particular facts and we would not wish to create an exhaustive definition which must be applied beyond the circumstances posited in this case.
So far as the present agreed factual situation is concerned, we are satisfied that the accrued jurisdiction is attracted and prima facie it is appropriate for the Family Court of Australia to exercise such jurisdiction.
In the present case there is a single property that is central to the parties’ controversy. The Family Court cannot determine and settle the property of the parties without determining the relative beneficial interests of the parties to the marriage and the wife’s father in the property. It is not to the point that a State court could make orders as to the dispute between the parties to the marriage and the wife's father, and that the Family Court of Australia could then determine the family law dispute between the parties to the marriage. It is enough to say that even taking the narrow view of accrued jurisdiction represented by Wilson J’s judgment in Philip Morris, in this case “the federal question could not be resolved without the determination of the non-federal question”. The Family Court of Australia must ascertain as a first step the property pool of the parties available for distribution.
We consider that in the present case the accrued jurisdiction of the Family Court of Australia is available to determine the matter. Whether or not the accrued jurisdiction is exercised depends upon the orders sought. There is no basis for suggesting that prima facie, the powers available under Part VIII of the Family Law Act are inadequate to grant appropriate relief, in particular there is the declaratory power of s. 78, the power to alter interests as between parties to a marriage contained in s. 79 and the further powers available under s. 80(1). In any event, no such submission was made on behalf of the wife.
Thus, we would answer the second question as follows:
“Relevant to whether the Family Court of Australia will exercise the Court’s accrued jurisdiction in the circumstances posited in question 1 are:
1.what the parties have done;
2.the relationships between or among them;
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.”
Conclusion re Question 3
In our opinion, once the Family Court of Australia has the jurisdiction to make determinations which affect a properly notified third party, that third party cannot thwart the making of orders that affect the third party by declining to participate in the proceedings. We agree with the submission for the husband that to find otherwise would elevate the status of the third party so as to enable the third party to thwart the exercise of the Court’s duty to determine the application between the parties to a marriage or former marriage.
Thus we would answer ‘yes’ to question 3 where the third party has proper notice and has been afforded a proper opportunity to be heard.
Conclusion re Question 4
In light of our answer to Question 3, this question should be answered “Unnecessary to answer”.
ANSWERS TO THE QUESTIONS STATED FOR THE OPINION OF THE FULL COURT
For the reasons stated above we would answer the questions as follows:
Question 1
Whether in light of the decision of Re Wakim; Ex Parte McNally and Ors (1999) 163 ALR 270, and Smith v Smith (No.3) (1986) FLC 91-732, the Family Court of Australia’s jurisdiction in a “matrimonial cause” under S. 4(1)(ca) of the Family Law Act 1975 is restricted to the determination of the Family law claim or proceeding, and does not (by way of accrued jurisdiction) extend beyond to the litigious and justiciable controversy:
(a) under State law; or
(b) pursuant to common law or at equity;between a party to a marriage or former marriage and a third party of which the Family law claim or cause of action forms part?
Answer: NoQuestion 2
If the answer is “no” to question 1, what are the indicia, criteria, factors or considerations that will invoke the exercise of the Court’s accrued jurisdiction in the circumstances posited in paragraph 1 hereof?
Answer: Relevant to whether the Family Court of Australia will invoke the Court’s accrued jurisdiction in the circumstances posited in question 1 are:7.what the parties have done;
8.the relationships between or among them;
9.the laws which attach rights or liabilities to their conduct and relationships;
10.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”;
11.whether the claims are non-severable from a matrimonial cause and arise out of a common sub-stratum of facts; and
12.whether the Court has the power to grant appropriate remedies in respect of the “attached” claims.
Question 3
If the answer to question 1 is “no”, does the Family Court have power to extend its accrued jurisdiction to the determination of an issue against a third party where that third party refuses to take part in the proceedings?
Answer: Yes where the third party has proper notice and has been afforded a proper opportunity to be heard.Question 4
If the answer to questions 1 and 3 are “no”, how are the accrued proceedings to go forward in the Family Court?”
Answer: Unnecessary to answer.
COSTS
The parties have not been afforded an opportunity to be heard on the question of costs. We will therefore make the following orders:
1.That either party be at liberty to make an application by way of written submissions within 21 days of the date hereof in respect of costs incurred by him or her in relation to the Case Stated.
2.That the other party have a further 14 days in which to make written submissions in answer thereto.
3.That the first mentioned party have a further 14 days in which to make any written submission in reply thereto.
4.That each submission have endorsed on the cover sheet the date on which a copy of that submission was served on the other party.
I certify that the numbered paragraphs 1 to 100 are a true copy of
the reasons for judgment delivered by this Honourable Full Court
Elizabeth Martello
Executive Assistant to the Chief Justice
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