Whitehouse & Whitehouse
[2009] FamCAFC 207
•20 November 2009
FAMILY COURT OF AUSTRALIA
| WHITEHOUSE & WHITEHOUSE | [2009] FamCAFC 207 |
| FAMILY LAW - APPEAL – JURISDICTION – ACCRUED JURISDICTION – In an appeal from the Family Court of Australia – Whether property proceedings can continue after both parties to a marriage have died – Where both parties sought final orders in relation to property settlement – Where the husband died soon after – Where the wife’s application was amended and sought to invoke the accrued jurisdiction of the Court – Where the wife subsequently died – Whether the relief sought in the amended application should have been brought pursuant to section 78 – Discussion about section 78 and section 79 – As both parties were dead when the matter came before the judge, there was no dispute remaining about which the Court had federal jurisdiction – Therefore there was nothing to which accrued jurisdiction could attach – Appeal dismissed |
| Family Law Act 1975 (Cth) section 78; section 79(8) |
| Bergman and Bergman (2009) FLC 93-395 Carlton and United Breweries Ltd v Castlemaine Tooheys Ltd (1986) 161 CLR 543 Duff and Duff (1977) FLC 90-217 Fisher v Fisher (No. 2) (1986) 161 CLR 438; (1986) FLC 91-767 Petrotimor Companhia de Petroleos SARL v Commonwealth of Australia (2003) 128 FCR 507 Philip Morris Inc v Adam P Brown Male Fashions Pty Ltd (1981) 148 CLR 257 Stack v Coast Securities (No. 9) Pty Ltd (1983) 154 CLR 261 Strelys and Strelys; Lukaitis (Executor) (1988) FLC 91-961 Valceski and Valceski (2007) FLC 93-312 |
| APPELLANT: | Ms Whitehouse (by her case guardian) |
| RESPONDENT: | Mr Whitehouse (by the executrices of his estate) |
| FILE NUMBER: | MLF | 3248 | of | 2006 |
| APPEAL NUMBER: | SA | 15 | of | 2009 |
| DATE DELIVERED: | 20 November 2009 |
| PLACE DELIVERED: | Brisbane |
| PLACE HEARD: | Melbourne |
| JUDGMENT OF: | May, O’Ryan & Stevenson JJ |
| HEARING DATE: | 13 July 2009 |
| LOWER COURT JURISDICTION: | Family Court of Australia |
| LOWER COURT JUDGMENT DATE: | 6 February 2009 |
| LOWER COURT MNC: | [2009] FamCA 68 |
REPRESENTATION
| COUNSEL FOR THE APPELLANT: | Mr North SC with Mr Pavone |
| SOLICITOR FOR THE APPELLANT: | CE Family Lawyers |
| COUNSEL FOR THE RESPONDENT: | Mr Pannam QC with Mr Thompson and Mr Moloney |
| SOLICITOR FOR THE RESPONDENT: | Grice & Grice |
Orders
The appeal is dismissed.
The respondent file written submissions in relation to costs of the appeal within 28 days. Upon receipt of those submissions the appellant file submissions in reply within 14 days. Upon receipt of those submissions the respondent file any submissions in reply within 14 days.
IT IS NOTED that publication of this judgment under the pseudonym Whitehouse & Whitehouse is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
| THE FULL COURT OF THE FAMILY COURT OF AUSTRALIA AT MELBOURNE |
Appeal Number: SA 15 of 2009
File Number: MLF 3248 of 2006
| Ms Whitehouse (by her case guardian) |
Appellant
And
| Mr Whitehouse (by the executrices of his estate) |
Respondent
REASONS FOR JUDGMENT
Introduction
This appeal is concerned with the continuation of property proceedings after both parties to a marriage have died. The appeal, filed on behalf of the deceased wife by her case guardian, is from orders of Mushin J made on 6 February 2009. Although both parties are represented by their legal personal representatives, for the sake of convenience and without wishing to give offence, they will be referred to as the husband and the wife.
At a time both parties were of an advanced age they, through their respective case guardians, applied for final orders in relation to property settlement. They had each been previously married and had adult children from those relationships. After the death of the husband, the wife’s application was amended to seek:
In the alternative that pursuant to the accrued jurisdiction of the Court and at equity it be declared that the husband (and his successors in title) hold his and/or their interest in the property in his/their name, pursuant to an implied constructive or resulting trust
The husband’s legal personal representative did not challenge the amendment at that time. The wife subsequently died, three months after the husband.
As the husband’s legal personal representative challenged the Court’s jurisdiction to hear the wife’s amended application, the issue before Mushin J was whether the Court had jurisdiction to make orders, and if so, whether that jurisdiction should be exercised.
The judge determined that the wife’s amended application was void ab initio as relief should have been sought pursuant to section 78 of the Family Law Act 1975 (Cth) (“the Act”). The orders made by Mushin J dismissed the wife’s amended application, dismissed all other applications and removed the proceedings from the list of cases awaiting hearing. The parties’ were given liberty to apply for consequent orders (including any order for costs).
It is argued by the respondent to the appeal that after the death of both parties, the original jurisdiction of the Court pursuant to the Act dissipated and no orders could be made by this Court. It is without doubt that absent the accrued jurisdiction of the Court, the death of the parties brought to an end the capacity of their representatives to seek orders for property settlement.
Arising from the decision of Mushin J a separate question is whether an application pursuant to section 78 may be continued after the death of one party.
Background
An understanding of the factual background to these proceedings is crucial to consideration of the issues on appeal. In his reasons, Mushin J set out a comprehensive chronology of events, and it is worthwhile reproducing that in its entirety:
6.The husband was born in … 1921 and the wife was born in …1923.
7.The husband and the wife married on … 1979. It was the second marriage for both of them. It was alleged on behalf of the wife that there had been a prior period of cohabitation which is not presently relevant.
8.In … 2006 the wife was admitted to hospital, apparently suffering from a dementia related problem. On discharge, she went to live at her daughter's home. It was subsequently alleged on behalf of the wife by her daughter – who later became her Case Guardian as referred to below – that at that point the parties were separated and their marriage had broken down irretrievably. That was subsequently challenged on behalf of the husband by his Case Guardian, also referred to below.
9.On 24 November 2006, proceedings were instituted in this Court on behalf of the wife by her daughter. Two applications were filed. The first of those, an Application in a Case, sought the appointment of the wife's daughter as her Case Guardian together with interim spousal maintenance for the wife. The application also sought that the matter ‘be heard expeditiously’.
10.The second application was an Application for Final Orders and sought the following final orders:
(1)There be such adjustment of property between the parties as this Honourable Court deems appropriate.
(2)Such further or other order as this Honourable Court deems appropriate.
It is common ground that this application is to be treated as an application for alteration of property interests pursuant to s 79 of the Act.
11.On 20 December 2006 orders were made by consent that the wife’s daughter be appointed as Case Guardian of the wife and the husband’s son be appointed as Case Guardian of the husband.
12.On 15 January 2007 a Response to an Application for Final Orders was filed on behalf of the husband by his Case Guardian. It sought the following orders:
(1)That the assets of the parties be divided 65% as to the Husband and 35% as to the Wife.
(2)That the Wife’s Application be otherwise dismissed.
(3)That the Wife pay the Husband’s costs of and incidental to these proceedings.
13.On 1 May 2007 an Application in a Case was filed on behalf of the husband by his Case Guardian seeking the following orders:
(1)That the wife’s Application for expedition of the trial … be dismissed.
(2)That the wife pay the husband’s costs of and incidental to this Application.
(3)The court declare that the marriage between husband and wife has not irretrievably broken down irretrievably and that separation has not occurred.
(4)The wife’s Form 1 Application for Final Orders filed on 24 November 2006 be dismissed on the grounds that the marriage has not broken down.
(5)A declaration that the wife’s Form 1 Application and Form 2 Application in a Case filed on 24 November 2006 is an abuse of process and that both Applications be dismissed and that the wife pay the husband’s costs of and incidental to the proceedings.
The application also sought further alternative orders which are not presently relevant.
14.The matter came before me on 2 May 2007. I dismissed the wife's application for priority and ordered that the husband’s Application in a Case filed 1 May 2007 be heard as a preliminary issue.
15.[In] … 2007, the husband died.
16.On 15 June 2007, the wife’s Case Guardian filed an Amended Application for Final Orders, which I will refer to as ‘the Accrued Application’. The amendment added the following order to the wife’s initial application:
In the alternative that pursuant to the accrued jurisdiction of the Court and at equity it be declared that the husband (and his successors in title) hold his and/or their interest in the property in his/their name, pursuant to an implied constructive or resulting trust.
It was evident during the course of submissions that this amendment sought to employ the use of State legislation.
17.On 21 August 2007 I made orders substituting the adult daughters of the deceased husband, being the executrices of his Will, for the husband in these proceedings pursuant to the provisions of s 79(8) of the Act. That application was not opposed. I otherwise dismissed interim applications and granted priority for the trial of the final applications.
18.[In] … 2007 the wife died.
19.Following the death of the wife, there were several mentions of the applications before me which dealt with procedural matters. Of present relevance is the fact that during at least one of those mentions, Counsel for the husband’s legal personal representative raised the possibility of a constitutional challenge to the Court's jurisdiction which had not been particularised at that time.
20.On 20 November 2007, an Application in a Case was filed on behalf of the deceased wife seeking that the executrices of the wife’s Will be substituted as parties on behalf of the wife. To the extent that that application may be seen as being pursuant to s 79(8) of the Act, no order was made on it because all applications pursuant to s 79 of the Act had died with the wife. (See Fisher v Fisher (1986) 161 CLR 438; Estate of MacKenzie (deceased) & Estate of MacKenzie (dec’d) (2008) 39 Fam LR 253).
On 10 December 2007, his Honour made orders which provided that the husband’s legal personal representatives were to make any application for removal of the proceedings to the High Court of Australia pursuant to section 40 of the Judiciary Act 1903 (Cth) no later than 21 December 2007. No such application having been made, the parties were required to file submissions relevant to the jurisdictional and discretionary issues. His Honour then heard oral submissions. (Reasons, [21] and [22])
Reasons for judgment
Mushin J dealt with two preliminary matters before turning to the substantive jurisdictional question.
First, his Honour noted that counsel for the husband did not pursue the argument that the “Court lacked jurisdiction because the parties were not separated”. Secondly, Mushin J briefly considered the question of the wife’s case guardian’s standing to conduct proceedings on behalf of the wife’s estate. However, his Honour noted that the manner in which he determined to deal with the matter meant that it was “not necessary to consider the issue of standing.” (Reasons, [24])
The judge then considered the substantive question of the jurisdictional competence of the wife’s application. He observed that:
25....The fundamental submission on behalf of the husband’s personal representatives is that at the time that the amendment was made on behalf of the wife, it was jurisdictionally incompetent and therefore, could never be considered to come within the accrued jurisdiction of this Court. If that proposition is correct, it would follow that this Court never has had, and does not presently have jurisdiction, to consider it.
In support of that submission, the husband’s representatives argued that Part VIII of the Act “is a complete code for determining property rights between parties to a marriage”. The trial judge referred to an extract from the Full Court decision in Duff and Duff (1977) FLC 90-217, where their Honours noted at 76,131:
Part VIII of the Act carries the heading ‘Maintenance and Property’ and in that Part there is no further definition of property nor any expressions which can themselves amplify, extend or, for that matter, limit the definition appearing in sec. 4. The Act itself is a comprehensive attempt to set down in 1975 the law relating to the consequences of the breakdown of marital relationships and Parliament has approached this task with a full awareness of the problems, both personal and legal, with which family law is fraught. The intention of the Act is to provide a code of sufficient scope and flexibility to bring, so far as possible, all the problems attendant upon family breakdown and dissolution of marriage under the jurisdiction of the Family Court of Australia. In our view the Act is to be read and construed widely and liberally with words and expressions being given their ordinary meanings as far as possible and without undue restraint imposed by legal principles more apposite to social conditions markedly different from those which characterise society today.
Mushin J summarised the competing cases of the parties thus:
29.The case put by the husband’s legal personal representatives was that the trust issue contained within the Accrued Application, not properly lying within this field, was never open to the parties to raise in these proceedings unless pursuant to s 78 of the Act. Accordingly the submission was that the Accrued Application was void ab initio for want of jurisdiction.
30.The essential submission on behalf of the executrices of the wife’s Will is that once seized of a State matter as a result of the accrued jurisdiction of this Court, this Court remains seized of it and is effectively required to hear and determine it. However, that submission does not engage with the question of whether this Court was ever properly seized of the Accrued Application to begin with.
The judge observed that both parties relied on the proposition that “the original substantive applications constituted a ‘matrimonial cause’” falling within the original jurisdiction of the Court pursuant to section 31 of the Act. (Reasons, [33])
In addition, some important facts and matters of principle were agreed between the parties, as his Honour correctly summarised:
39.It is common ground that at the time of filing of the wife's initiating application for alteration of property interests and the husband’s response thereto, both applications constituted a ‘matrimonial cause’ in accordance with paragraph (ca) of the definition of that term in s 4(1). Upon the death of the husband and the substitution of his legal personal representative pursuant to s 79(8) of the Act, the proceedings remained a ‘matrimonial cause’ within the original jurisdiction of this Court as held by the High Court of Australia in Fisher (supra). Further, it is agreed that the competing applications for alteration of property interests pursuant to s 79 of the Act came to an end upon the death of the wife and the Court no longer had jurisdiction to determine them from that time (MacKenzie (supra)).
40.It is agreed that the Accrued Application could not have been brought in its precise form within the original jurisdiction of the Court. This is based on the Court’s jurisdiction, or lack thereof, to deal with the matter ‘at equity’. I note the decision of Vergis and Vergis (1977) FLC 90-275, in which Emery J held at 76,470:
[T]he Family Court is not a court of Common Law or a Court of Equity as are the Supreme Courts of the States with inherent jurisdiction. The Family Court is a creature of statute and has no powers other than those given to it by statute.
Mushin J identified the legal principles relevant to the accrued jurisdiction of the Court. As there was no question that the correct principles had been relied upon, we see no need to set out this part of the judgment at length, only to refer to paragraph 34 including the reference to Philip Morris Inc v Adam P Brown Male Fashions Pty Ltd (1981) 148 CLR 257:
34.In addition to the original jurisdiction conferred by s 31 and the definition of ‘matrimonial cause’, the Court also has accrued jurisdiction. That jurisdiction arises out of the word ‘matters’ in s 31(1) and was defined by Barwick CJ in Phillip Morris Inc v Adam P Brown Male Fashions Pty Ltd (1981) 148 CLR 257 at 457 and 512, in the following terms:
It is settled doctrine in Australia that when a court which can exercise federal jurisdiction has its jurisdiction attracted in relation to a matter, that jurisdiction extends to the resolution of the whole matter. This accrued federal jurisdiction is not limited to matters incidental to that aspect of the matter which has in the first place attracted federal jurisdiction. It extends, in my opinion, to the 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.
…
In instances of this kind a court which exercises federal jurisdiction will have jurisdiction to determine an attached claim as an element in the exercise of its federal jurisdiction. …
(original emphasis)
Having set out section 78 of the Act, being the relevant statutory provision concerning the power of the court to make declarations with respect to the property of the parties, his Honour concluded:
43.Section 78 refers to ‘the parties to a marriage’. At the time that the Accrued Application was made, one of the parties to the marriage, the husband, had died. There is nothing to suggest that the ratio of Fisher's case does not extend to an application under section 78 in the circumstances. No submission has been made to the contrary. Accordingly, I find that at the time of making the Accrued Application, the legal personal representatives of the wife could have amended the substantive application to seek an appropriate declaration which this Court had the jurisdiction to determine pursuant to that section. The evidence and submissions in support of the application would have been identical to those which could be advanced in a State Court in support of the relief sought in the Accrued Application. Likewise, the relief which the Court had jurisdiction to grant in an application pursuant to section 78 of the Act would have been identical to that which was available in the State Court as between the parties to the proceedings as they then were. It follows that had the legal personal representatives of the wife relied on section 78 rather than the Accrued Application, no prejudice would have been suffered by them with regard to the available relief.
44. In summary:
·Part VIII of the Act covers the field with regard to relevant matrimonial causes;
·At the time that the Accrued Application was made, the proceedings before the Court constituted a matrimonial cause, notwithstanding that one of the parties to the marriage had died;
·Accordingly, at that time, any relief which was a matrimonial cause could only be sought under the Act;
·The relief sought in the Accrued Application was a matrimonial cause which could have been brought under section 78 and therefore could only be sought pursuant to that section; and
·Because the relief sought in the Accrued Application was not sought under the Act, it was void ab initio for want of jurisdiction.
(emphasis added)
Having so found, the trial judge dismissed the wife’s application. He further noted that it was open to the parties to commence proceedings in the Supreme Court.
Grounds of appeal
In the amended notice of appeal, the appellant contends that the trial judge erred in four respects:
(a)Failing to first consider the application for substitution filed 20 November 2007;
(b)Dismissing the amended Application for Final Relief (the “accrued application”);
(c)Determining that at the time of making the accrued application, the Family Court had jurisdiction to entertain the application pursuant to section 78 of the Act; and
(d)Determining that the accrued application was void ab initio for want of jurisdiction.
In the event that the appeal succeeds, the appellant seeks orders dismissing the orders of Mushin J, substituting the executrices of the wife’s will for the wife’s case guardian, and remitting the amended application filed 15 June 2007 for determination by a trial judge.
The application for substitution of the executrixes of the wife’s will
Counsel for the appellant treated the first ground as a preliminary matter of standing. It was contended that the trial judge had erred in dismissing the application filed 20 November 2007 which sought to substitute the executrices of the wife’s will as parties in place of her case guardian.
It was submitted that if the wife had a valid cause of action (the accrued application) then an order for substitution of the names of the executrices should have been made before any step was taken. Opposing this submission there was some reliance on Strelys and Strelys; Lukaitis (Executor) (1988) FLC 91-961 and rule 6.15 of the Family Law Rules 2004.
The case guardian for the wife was her daughter. The case guardian for the husband was his son-in-law. After the husband’s death the judge made orders substituting his adult daughters, who were the executrices of his will. The reasons given by his Honour for refusing the application on behalf of the wife were, as we have already set out, in paragraph 18 of this judgment, which we repeat in part:
To the extent that that application may be seen as being pursuant to s 79(8) of the Act, no order was made on it because all applications pursuant to s 79 of the Act had died with the wife.
It was submitted that:
3.…if as the Appellant contends, the deceased wife had a validly constituted cause of action before the Court (the ‘Accrued Application’) at the date of her death and that action has not abated then an order for substitution ought to have been made before any further step was taken.
4.That last stated proposition follows from the following: (a) if one assumes that the ‘Accrued Application’ was validly brought by the wife prior to her death then it is a cause of action that survived her death for the benefit of her estate by virture of s 29 (1) of the Administration and Probate Act 1958 (Vic), which Act is binding upon the Family Court by virtue of s 79 of the Judiciary Act 1903(Cth). …
5.The Appellant is dead and the case guardian has no one’s interest to protect or advance. This has been so from a time well prior to his Honour hearing argument with respect to jurisdiction. The application which was intended to remedy that position had been filed on 20 November 2007 but remains undetermined. The case guardian has effectively filled a proxy role for the executrices who at all relevant times have sought to be substituted. It may be that without the presence of a contradictor with standing there is not a justiceable controversy and no existing proceeding for relief, at all.
(footnotes omitted)
In response, it was submitted by counsel for the respondent that:
5.…as Justice Mushin observed in paragraphs 19 and 20 of his reasons for judgement, upon the deceased wife’s death [in] … 2007, the federal jurisdiction of the Court to make orders under section 79 of the Family Law Act 1975 (‘the Act’) either under the deceased wife’s Amended Application for Final Orders or the deceased husband’s Response to that Application lapsed. It must follow that, from that point in time, the Court had no obligation to hear or consider the November 2007 application for substitution.
6.Contrary to what has been asserted…the Court has formally determined this substitution application. Paragraph 2 of the Orders of Mushin J made on 6 February 2009, dismissed ‘all other applications’ which order encompasses the November 2007 application.
(footnotes omitted)
The answer to these submissions depends on the main question, being whether there were any proceedings which could be dealt with by the Family Court of Australia after the death of the parties. If there was to be no “future conduct of the case” (rule 6.15) then it would not have been appropriate for the order to have been made. We will therefore refer to this question later in this judgment.
Accrued jurisdiction
Turning to the substantive issue raised in the appeal, counsel for the appellant noted that the husband was deceased when the wife’s application was amended to rely on the “accrued application”.
The essence of the submissions were that although the wife’s claims pursuant to section 79 abated at the death of both parties, the accrued claim survived the death of the wife. Contrary to the judgment of Mushin J, it was submitted that the wife was not entitled to seek declaratory relief under section 78 of the Act as there were “no parties to the relevant marriage”. Rather, the proceedings were “between a party to the marriage and the personal representatives for the other party to that marriage”.
The provisions of section 78(1) are as follows:
In proceedings between the parties to a marriage with respect to existing title or rights in respect of property, the court may declare the title or rights, if any, that a party has in respect of the property.
It was submitted that the wording of section 78 precluded the wife from seeking declaratory relief after the death of the other party. It was conceded by counsel that if the husband had still been living when the accrued application was filed, then section 78 “would be the only avenue for such relief.” As Mr North SC explained before us:
In those proceedings the wife sought declaration at a time after the death of her spouse. Had he been alive those same declarations, pursuant to the same principles of law, could and ought properly have been brought under section 78. Perhaps it is appropriate at this point to pause to remember that section 78, in a sense, doesn’t create new rights. It empowers this court, in the circumstances of which it is enlivened properly, to declare existing rights…
Counsel submitted that section 79(8) was the relevant provision of the Act to which the trial judge should have made reference. It is useful to also refer to part of section 79(1), especially to note the difference in wording between section 79(1) and section 78(1):
Section 79Alteration of property interests
(1)[Orders] In property settlement proceedings, the court may make such order as it considers appropriate:
(a)in the case of proceedings with respect to the property of the parties to a marriage or either of them – altering the interests of the parties to the marriage in the property; …
…
(8)[Death of a party] Where, before property settlement proceedings are completed, a party to the marriage dies:
(a)the proceedings may be continued by or against, as the case may be, the legal personal representative of the deceased party and the applicable Rules of Court may make provision in relation to the substitution of the legal personal representative as a party to the proceedings;
(b)if the court is of the opinion:
(i)that it would have made an order with respect to property if the deceased party had not died; and
(ii)that it is still appropriate to make an order with respect to property;
the court may make such order as it considers appropriate with respect to:
(iii)any of the property of the parties to the marriage or either of them; or
(iv)any of the vested bankruptcy property in relation to a bankrupt party to the marriage; and
(c)an order made by the court pursuant to paragraph (b) may be enforced on behalf of, or against, as the case may be, the estate of the deceased party.
It is obvious that the provisions of section 79(8) are contained within section 79 and that in section 78 the reference to proceedings are “between the parties”.
For completeness, we would add that the definition of ‘matrimonial cause’ as found in section 4(1) includes:
(ca)proceedings between the parties to a marriage with respect to the property of the parties to the marriage or either of them, being proceedings:
(i)arising out of the marital relationship; …
The constitutional validity of section 79(8) was upheld by the High Court in Fisher v Fisher (No. 2) (1986) 161 CLR 438; (1986) FLC 91-767, where the Court determined that the provision was within the scope of the marriage power conferred by section 51(xxi) of the Constitution. Brennan J stated at 457-458:
Section 79(8) does not confer jurisdiction on the Family Court to entertain proceedings commenced after the death of one of the parties to the marriage. The proceedings to which it relates are proceedings commenced between the parties to a marriage with respect to the property of those parties or either of them arising out of the marital relationship or otherwise falling within par. (ca) of the definition of ‘matrimonial cause’ in s. 4(1) of the Act. The proceedings must have been a matrimonial cause commenced pursuant to s. 79(1). The death of a spouse will not always extinguish or satisfy the moral claims of the surviving spouse and children to which effect would have been given if the proceedings had been complete. Section 79(8) empowers the Family Court to give effect to the moral claims made in respect of the property of the spouses which was made available to answer those claims by the commencement of the proceedings, provided ‘it is still appropriate to make an order with respect to property’: s.79(8)(b)(ii). That qualification on the power, coupled with par. (ca)(i) of the definition of ‘matrimonial cause’, ensure that the jurisdiction is exercised only in cases where the moral obligations arising out of the marriage remains unsatisfied.
Section 79(8) provides machinery for the discharge of those moral obligations in priority to any rights in the property of a party to a marriage which arise by testamentary disposition to that party’s property or by any other devolution of that property on that party’s death. That is a law which governs an incident of marriage in that it provides the machinery for enforcing the moral obligation with respect to property arising from a spouse’s marital relationship. It is a law with respect to marriage.
(emphasis added)
Counsel for the wife argued that there is no like provision “extending the life of proceedings” commenced under section 78 and, similarly, that Fisher v Fisher does not apply to that provision.
In response to this point, counsel for the husband made the following observations about the Family Court’s jurisdiction, noting that the Court:
(i)is not a court of plenary jurisdiction and in particular, it has not been and could not be, invested with, the general equitable jurisdiction possessed by the Supreme Court of Victoria in relation to implied, constructive or resulting trusts; and
(ii)as statutory court, established under Chapter III of the Constitution, may only exercise the original and appellant federal jurisdiction which is conferred on it by a valid Commonwealth law, including principally the Act together with such other federal jurisdiction that is necessary and incidental to or associated with the statutory jurisdiction as well as valid accrued jurisdiction which complies with the established constitutional principles.
It was further submitted in response that sections 78 and 79 of the Act must be read together. In addition:
22.Following the deceased wife’s death, the Court had no continuing federal jurisdiction based on or derived from section 79 of the Act. It follows that the only remaining possible source of the Court’s federal jurisdiction to determine any lis that remained between the executors of the estate of the deceased wife and executors of the estate of the deceased husband (as the persons in whom the property of each of the deceased husband and wife following grants of probate) was the so-called ‘accrued jurisdiction claim; made in the Amended Application for Final Orders.
The exercise of accrued jurisdiction
Counsel for the wife argued that once accrued jurisdiction has been established, it is not open to the Court to consider whether it should be exercised. Reference was made to the decision of the Full Court (Bryant CJ, Finn and Warnick JJ) in Bergman and Bergman (2009) FLC 93-395, where their Honours said at paragraph 27:
We observe here that it must now be accepted that once it is determined that accrued jurisdiction is available in a particular matter there is, at least as a general rule, no discretion not to exercise such jurisdiction (ASIC v Edensor Nominees Pty Ltd (2001) 204 CLR 559; Haughton & Ors v Arms (2006) 225 CLR 553).
In oral submissions, counsel argued:
[I]f the [accrued] jurisdiction at the time when it was sought to be invoked was properly invoked, because it was attached to an existing federal action, the matrimonial cause, and then that the matrimonial cause itself came to an end, does not bring to an end the federal – the jurisdiction of this court to determine the entire matter. It remains.
In support of this proposition, counsel referred to the decision of the Full Court of the Federal Court in Petrotimor Companhia de Petroleos SARL v Commonwealth of Australia (2003) 128 FCR 507. In their joint judgment, Black CJ and Hill J considered the nature of accrued jurisdiction:
3.It cannot be in dispute that where this Court is invested with original jurisdiction to determine what may be referred to as a ‘federal matter’ it has jurisdiction to determine the whole of the matter in controversy between the parties, including such elements of the matter as may be in and by themselves not federal in nature: Philip Morris Inc v Adam P Brown Male Fashions Pty Ltd (1981) 148 CLR 457; Fencott v Muller (1983) 152 CLR 570. In such a case the non-federal matter has usually been said to be in the ‘accrued jurisdiction’ of the Court, although the expression may need to be used with some care: cf Australian Securities and Investment Commission v Edensor Nominees Pty Ltd (2001) 204 CLR 559 at 585-586.
4.It is equally clear, however, that this Court may not proceed to deal with what may for present purposes be called the non-federal aspect of the dispute unless the jurisdiction of the Court to deal with a federal matter has been invoked: Carlton & United Breweries Ltd v Castlemaine Tooheys Ltd (1986) 161 CLR 543 at 553 and see Stack v Coast Securities (No 9) Pty Ltd (1983) 154 CLR 261.
…
6.It is now well established that the mere fact that a federal claim which is brought within the jurisdiction of the Court is not tenable will not prevent the Court from proceeding with a non-federal element which is within the accrued jurisdiction of the Court: Burgundy Royale Investments Pty Ltd v Westpac Banking Corporation (1987) 18 FCR 212; Post Offıce Agents Association Ltd v Australian Postal Commission (1988) 16 ALD 428.
7.Burgundy involved a claim brought under the Trade Practices Act against the Northern Territory and a corporation which was the Crown in the right of the Territory. It also involved non-federal claims. The ratio of the decision is that it followed from Fencott v Muller that a ‘matter’ in the context of s 76(ii) of the Constitution was a justiciable controversy which was either constituted by or included a claim arising under a federal law but might also include another cause of action arising under a non-federal law. Since the Court had jurisdiction to determine each of the claims which together constituted a federal matter, the mere fact that the federal claim was unsuccessful did not mean that the Court could not determine the non-federal claim. Since the Court did have jurisdiction to determine the federal matter arising before it, that jurisdiction did not cease once the federal claim was determined adversely to the applicants.
…
18.What is, we think clear, however, is that where the federal part of the controversy is such that the Court lacks jurisdiction to hear it, then there can be no accrued jurisdiction. Accrued jurisdiction can only arise where the single controversy which is the ‘matter’ is one which is within the jurisdiction conferred upon the Court. If no federal jurisdiction is properly invoked then there can be no accrued jurisdiction: Carlton & United Breweries Ltd v Castlemaine Tooheys Ltd (1986) 161 CLR 543 and Johnson Tiles Pty Ltd v Esso Australia Pty Ltd (2000) 104 FCR 564 at 598 per French J.
19.Allsop J in his paper appears to us to propound the view that all that is required to invoke federal jurisdiction for this purpose is that federal jurisdiction be asserted (but subject perhaps to the qualification that the assertion is bona fide and is not frivolous or colourable). His Honour cites the decision of a Full Court of this Court in Westpac Banking Corporation v Paterson (1999) 95 FCR 59 at 62 in support of this view. That was a case where a cross-claim, not being colourable, attracted federal jurisdiction where it asserted a claim founded on Commonwealth legislation. But Westpac Banking Corporation seems rather to be a case where the cross-claim was such that the Court had authority to proceed to hear and determine the issue involved, and thus the non-federal part of the controversy, and not a case where the Court was first required to decide whether it had jurisdiction to hear and determine any federal claim at all.
20.It can be said in criticism of our view that the distinction we have sought to draw is a fine one. But it is a distinction which might need to be drawn where the question thereafter is whether the decision of this Court could be prohibited or quashed by the High Court under s 75 (v) of the Constitution because the Court has acted in excess of or failed to exercise its jurisdiction.
(emphasis added)
The paper by Allsop J to which their Honours referred was titled “Federal Jurisdiction and the Jurisdiction of the Federal Court of Australia in 2002” and published in the Australian Bar Review. It has been of assistance to us and it is worthwhile repeating portions of the article here:
Once a party involved in a controversy asserts its position and that amounts to the assertion of a matter arising under a federal law in the sense discussed above, the whole matter or controversy is federal.
Once federal jurisdiction is attracted to a court, the jurisdiction which is exercised by that court throughout the case will be federal, save as to a completely disparate claim constituting in substance a separate matter.
Once federal jurisdiction is attracted, the court is not exercising State jurisdiction. There is no notion of concurrent exercise of federal and State jurisdiction over the matter. It is federal. The notion that there could be two concurrent streams of federal and State jurisdiction (cf Lorenzo v Carey) was doubted in Ffrost v Stevenson and rejected in Felton v Mulligan and Moorgate Tobacco.
When a right, as part of a claim or defence, which is said to arise under a law of the parliament, is put forward by the party, the assertion of the federal issue, not its disposition, and not its merit, attracts the jurisdiction of the court to the relevant matter of which the federal issue forms part, unless the claim or defence is made colourably, that is not genuinely or as a ‘mere subterfuge’ in order to fabricate jurisdiction. Note that (especially in the context of the cross-vesting legislation) it is not colourable to bring proceedings in the Federal Court as a step in having the case moved to the Supreme Court so that all issues may be dealt with.
Hence, even if the federal issue is decided against the party raising it, or, it was, or became, unnecessary to deal with it, the matter of which it forms part does not cease to be federal jurisdiction. This is so even if the federal claim is struck out.
…
The legitimacy of the court disposing of the non-federal issues even after the failure of the federal issue arises from the clothing of the court with an authority essential for the complete adjudication of the matter. The jurisdiction, the authority to decide, arises once the claim is made, once it is asserted. As Latham CJ said in Hopper v Egg and Egg Pulp Marketing Board:
The fact that the constitutional objection has failed does not deprive the court of jurisdiction if ‘the facts relied on were bona fide raised, and were such as to raise’ the question (Troy v Wrigglesworth … at 311).
For the accrued jurisdiction to fail or lapse by reason of the unsuccessful invocation of a federal right, the non-federal part of the matter would have to have remained State jurisdiction or would have to have been transmogrified back into State jurisdiction. The former is a species of Lorenzo v Carey heresy. The latter has no foundation.
(emphasis added) (footnotes omitted)
Counsel for the wife submitted that, applying this reasoning, there was in existence a federal claim, being a claim for property settlement pursuant to section 79 of the Act which survived the death of the husband by operation of section 79(8), at the time when the accrued application was made. Therefore, it was argued, that amendment was an invocation of the federal jurisdiction of the court. He continued:
[T]hat subsequently the statutory claim abated by reason of the death of the wife does not mean that the other claim ceased to form part of the federal jurisdiction of the court.
…
[O]nce it is accepted…that this court had before it a federal claim, being the section 79 claim, at the time when the other claim was brought…[w]hatever then happened in the resolution of that federal claim does not affect the existing and ongoing federal nature of the other claim. It remains within the jurisdiction of the court and it is legitimate – not only legitimate, but appropriate, for the court to continue to deal with…
On this point, counsel for the husband argued that if the Court had acquired accrued jurisdiction to declare the existence of an implied or constructive trust against the property vested in the executrices of the husband’s estate, such accrued jurisdiction was “extinguished when the jurisdiction to make orders under section 79 of the Act abated on the death of the deceased wife”. Counsel referred to the decision of the High Court in Carlton and United Breweries Ltd v Castlemaine Tooheys Ltd (1986) 161 CLR 543, where the Court, in considering the decision in Stack v Coast Securities (No. 9) Pty Ltd (1983) 154 CLR 261 observed at 553:
It clearly appears from this judgment, and is indeed obvious, there can be no accrued jurisdiction unless there are federal issues which the Court has jurisdiction to entertain.
(emphasis added)
Counsel submitted that:
29.Once it becomes clear that the federal jurisdiction was not, or was no longer, properly invoked, there can be no accrued jurisdiction remaining in the Court to consider and determine the claim for a declaration or [sic] implied, resulting or constructive trust. The principle that, once attracted or attached, the accrued jurisdiction to … determine the non-federal claim is not lost by the rejection, dismissal or abandonment of the primary federal claim which provided the source of the federal jurisdiction over the non-federal claim, does not extend to cases such as this one, where before the hearing and determination of the case, there is no longer any primary federal jurisdiction vested in the Court to determine the federal claim, it having abated by operation of law prior to the hearing and determination.
(footnotes omitted)
We accept this submission.
And further to the extent that there are discretionary elements for our consideration it was submitted by counsel for the respondent:
35.This case is one that plainly is out of the ordinary and exceptional. The circumstances are such that the Court should decline to entertain the accrued claim pressed by the Appellant. In this regard, it must be kept in mind that what remains of this proceedings is in substance one being prosecuted by [the wife’s daughter] as both an executrix and a beneficiary under the deceased wife’s will seeking declaratory relief against or out of the estate of the deceased husband solely and completely for her own benefit or for the benefit of herself and any other beneficiaries of the deceased wife’s estate. Accordingly it is a misuse of the jurisdiction, powers and procedures of the court to allow such proceeding to continue devoid as it is of any subsisting moral or legal nexus with the marriage relationship between the deceased husband and the deceased wife.
To the extent that there is an element of discretion in such matters we find this argument attractive.
The extent to which the discretion may be exercised in refusing to decline to exercise accrued jurisdiction was carefully analysed by Brereton J in Valceski and Valceski (2007) FLC 93-312. The following paragraph from that decision is of assistance in this case:
59.Accordingly, the Family Court has accrued jurisdiction, just as does the Federal Court and the High Court, to determine the whole of a justiciable controversy, even though some aspects of it may involve State and not federal law. So long as the controversy arises under the Family Law Act, it need not be limited to it. Once seized of jurisdiction in respect of a matter arising under the Family Law Act – pursuant to Family Law Act s 31(1)(a) – the jurisdiction of the court extends to the whole of the matter, that is to say, the justiciable controversy, even though its determination requires the application of State law. While there may be a discretion to decline to exercise accrued jurisdiction, it will be an exceptional case in which that discretion can properly be exercised so that the whole of a justiciable controversy is not resolved in the one court.
Conclusions
We agree with the first three conclusions of his Honour set out in paragraph 44 of the judgment. We do not agree with his Honour in relation to the other two dot points, namely:
· The relief sought in the Accrued Application was a matrimonial cause which could have been brought under section 78 and therefore could only be sought pursuant to that section; and
· Because the relief sought in the Accrued Application was not sought under the Act, it was void ab initio for want of jurisdiction.
With respect to those conclusions, also described by us under the heading “Grounds of Appeal” (paragraph 20 (c) and (d)), we have reached a different conclusion.
We are of the view that when the matter came before Mushin J for determination, as both parties were deceased, there was no dispute remaining between them about which the Family Court had federal jurisdiction. Therefore no application relying on accrued jurisdiction could attach to a Family Court matter.
We are encouraged in this view by the statement of Black CJ and Hill J in paragraph 18 of Petrotimor, which we have set out above.
It is a separate question whether the wife could have filed proceedings in reliance on the provisions of section 78 after the death of the husband. At the time the amended application was filed there was then an existing application pursuant to section 79. There is no doubt that after the death of a party, the provisions of section 79(8) allow those proceedings to be continued. Of course, once both parties were deceased the provisions of section 79(8) no longer allowed the proceedings to continue.
We think it is doubtful that section 78 proceedings for a declaration may be continued after one party dies. We are reinforced in this view by the legislation itself and the judgment of Brennan J in Fisher, to which we have referred, in particular at pages 457and 458:
Section 79(8) does not confer jurisdiction on the Family Court to entertain proceedings commenced after the death of one of the parties to the marriage. The proceedings to which it relates are proceedings commenced between the parties to a marriage with respect to the property of those parties or either of them arising out of the marital relationship or otherwise falling within par. (ca) of the definition of ‘matrimonial cause’ in s. 4(1) of the Act. The proceedings must have been a matrimonial cause commenced pursuant to s. 79(1). The death of a spouse will not always extinguish or satisfy the moral claims of the surviving spouse and children to which effect would have been given if the proceedings had been complete. Section 79(8) empowers the Family Court to give effect to the moral claims made in respect of the property of the spouses which was made available to answer those claims by the commencement of the proceedings, provided ‘it is still appropriate to make an order with respect to property’: s.79(8)(b)(ii). That qualification on the power, coupled with par. (ca)(i) of the definition of ‘matrimonial cause’, ensure that the jurisdiction is exercised only in cases where the moral obligations arising out of the marriage remains unsatisfied.
Section 79(8) provides machinery for the discharge of those moral obligations in priority to any rights in the property of a party to a marriage which arise by testamentary disposition to that party’s property or by any other devolution of that property on that party’s death. That is a law which governs an incident of marriage in that it provides the machinery for enforcing the moral obligation with respect to property arising from a spouse’s marital relationship. It is a law with respect to marriage.
(emphasis added)
To the extent that Mushin J relied on the failure of the wife to file an application pursuant to section 78, we would depart from those reasons. In our view, the amended application fails by reason of the death of the parties so that there is no federal jurisdiction to which an accrued claim can be made.
The orders dismissing the application and other orders were correct. It follows that Mushin J was also correct in refusing the application to substitute the names of the executrices.
Costs
As requested by counsel, we shall reserve the question of costs and make directions to enable the parties to make written submissions in light of our reasons for judgment in the appeal.
I certify that the preceding fifty-eight (58) paragraphs are a true copy of the reasons for judgment of the Honourable Full Court.
Associate:
Date: 20 November 2009
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